Introduction

Whether you already run a company in the UAE or are considering setting up a new venture, understanding the UAE corporate tax system in 2025 is essential.

The Federal Tax Authority (FTA) has issued several new rules this year, covering free zones, partnerships, family foundations, and multinational groups. These updates affect how you plan, operate, and grow your business.

At Virtue Corporate Services, we guide entrepreneurs and business owners through these changes, ensuring that tax compliance doesn’t get in the way of expansion and profitability.

Key UAE Corporate Tax Updates in 2025

1. Free Zone Companies – Still Tax-Free, But With Stricter Rules

  • Free zones remain attractive with a 0% corporate tax rate, but only if your business qualifies under Ministerial Decision No. 229 of 2025.
  • Certain activities (like IP income, commodity trading, or services to mainland clients) are closely monitored.
  • Exceeding non-qualifying activity thresholds means losing your free zone benefit.

👉 For existing businesses: Reassess your revenue streams—one misstep can cost your tax-free status.
👉 For new investors: Choose the right free zone and activity structure to lock in incentives.

2. Domestic Minimum Top-Up Tax (DMTT) – A Global Standard Hits UAE

  • Effective 1 January 2025, large multinational groups with global revenues above EUR 750 million must pay a minimum 15% effective tax rate.
  • Even if a free zone offers 0%, the DMTT ensures you pay the difference.

👉 Existing groups: Review global effective tax calculations now.
👉 New entrants: If you’re part of an international structure, tax planning is key before you set up.

3. Partnerships, Family Foundations & Foreign Entities

  • Partnerships are now subject to UAE corporate tax under Cabinet Decision 63 of 2025.
  • Family foundations must register and file tax returns as per FTA Decision 5 of 2025.
  • Foreign-incorporated entities may also fall under UAE tax rules if owned by UAE exempt persons.

👉 Existing firms: If you operate through a partnership or foundation, you now have new filing duties.
👉 New investors: Decide early whether a company, foundation, or partnership is the right vehicle for your goals.

4. Tax Groups – Audit & Filing Just Got Tougher

  • Businesses that form a tax group must now prepare audited special-purpose financial statements (FTA Decision 7 of 2025).
  • This means more consolidation work, stricter reporting, and higher audit costs.

👉 Existing groups: Start audits early—delays can mean penalties.
👉 New entrants: Consider carefully if forming a tax group is worth the extra compliance.

5. Filing Deadlines You Cannot Miss

  • First corporate tax returns for most businesses are due 30 September 2025 (for FY ending Dec 2024).
  • Free zone companies must submit audited accounts to confirm eligibility.

👉 Everyone: Missing deadlines = penalties, loss of benefits, and compliance red flags.

What This Means for Businesses

For Existing Business Owners

  • Review your corporate structure to ensure compliance.
  • Monitor revenue sources in free zones.
  • Prepare for audits and group filings.
  • Plan cash flow for potential 9% + DMTT obligations.

For Entrepreneurs Planning to Setup in the UAE

  • Select the right free zone vs. mainland structure based on your activity.
  • Understand how corporate tax impacts your business model from day one.
  • Use tax planning to legally reduce liabilities.
  • Build compliance systems early—this saves costs later.
    Common Questions We Hear

❓ Is UAE still a tax-free haven?
Not completely. Free zones offer 0% tax, but strict qualifying rules apply. Mainland companies pay 9% after AED 375,000 profit.

❓ Can I still save on taxes in 2025?
Yes—through correct structuring, free zone selection, and compliance planning.

❓ I’m a startup. Do I need to worry about corporate tax?
If profits are below AED 375,000, your liability is 0%. But you must still register and file returns.

❓ What if I miss my filing deadline?
The FTA imposes penalties, and you risk losing free zone tax incentives.

Why Choose Virtue Corporate Services?

At Virtue Corporate Services, we don’t just help you set up a business in Dubai—we ensure you stay compliant and tax-efficient year after year.

Our team assists with:
✅ Free zone & mainland business setup
✅ Corporate tax registration & filing
✅ Structuring for tax optimisation
✅ Accounting, audit, and compliance support
✅ Bank account opening & advisory

Final Thoughts

The UAE corporate tax regime in 2025 is more advanced than in previous years. Whether you’re running a free zone company or planning your first venture in Dubai, knowing the rules is crucial for sustainable success.

📞 Contact Virtue Corporate Services today to protect your tax position and unlock the UAE’s business opportunities with confidence.