Understanding UAE Corporate Tax: What Every Business Owner Should Know in 2025

UAE Corporate Tax (CT): 2025 Guide for Businesses

The UAE Corporate Tax (CT) regime has transformed the business landscape. Introduced to align with international standards, it affects most companies operating in the UAE, including mainland and free zone businesses. Understanding the tax obligations, exemptions, and filing requirements is critical for businesses to avoid penalties and optimize compliance.

Who is Subject to UAE Corporate Tax?

Corporate tax applies to:

• UAE-resident businesses generating profits above AED 375,000
• Foreign entities conducting business in the UAE
• Exclusions: Individuals, government entities, and some small-scale businesses under the threshold

Key Points

• Standard CT rate: 9% on profits exceeding AED 375,000
• Free zone entities: May qualify for 0% CT if they meet regulatory requirements and do not conduct business with mainland entities
• Offshore companies: Typically exempt if they operate solely outside the UAE

Important Updates for 2025

1. Thresholds and Rates
   • Profits up to AED 375,000 → 0%
   • Profits above AED 375,000 → 9%
2. Free Zone Companies
   • Free zone companies must maintain regulatory compliance to retain tax incentives
   • Any mainland transactions may trigger CT obligations
3. Exemptions
   • Certain charitable activities, government-linked entities, and qualifying intra-group transactions may be exempt
4. Transfer Pricing
   • UAE aligns with OECD guidelines, requiring documentation for intra-group transactions to prevent profit shifting

Corporate Tax Filing Requirements

Businesses must ensure proper compliance by following these steps:

1. Register with the Federal Tax Authority (FTA)
2. Maintain accurate financial records
3. Submit CT Return annually
4. Pay the corporate tax by the due date

Consequences of Non-Compliance:

• Fines for late registration or late payment
• Penalties for incorrect or incomplete filing
• Possible license suspension in extreme cases

Impact on Businesses

For SMEs:

• Must track annual revenue to determine tax liability
• Proper bookkeeping and accounting are critical

For Large Corporates:

• Transfer pricing and intra-group transactions require detailed reporting
• Strategic tax planning can optimize liability

For Startups:

• Leveraging free zone exemptions can reduce early-stage tax burdens
• Ensuring compliance from day one avoids future penalties

How Triam Group Helps Businesses Navigate Corporate Tax

At Triam Group, we offer end-to-end corporate tax advisory tailored to your business:

• Comprehensive CT registration and filing
• Free zone compliance support
• Transfer pricing documentation
• Strategic tax planning to optimize liability
• Audit-ready financial reporting

Our expert team ensures your business remains fully compliant, avoiding unnecessary penalties while maximizing tax efficiency.

Navigating UAE tax laws can be complex. Our Tax Advisory Services help you stay compliant while minimizing your tax liabilities effectively.