UAE Corporate Tax Compliance and Advisory Service
The UAE has introduced a new era of taxation with the implementation of Corporate Tax (CT), effective June 1, 2023, under Federal Decree-Law No. 47 of 2022. This major fiscal reform applies to businesses across mainland and Free Zone jurisdictions. At Virtue Corporate Services, we offer end-to-end corporate tax services in Dubai, helping your business remain compliant, minimize risks, and optimize tax liability under the new UAE tax regime.
Overview of UAE Corporate Tax Law
The UAE corporate tax applies to the net profit of businesses, as reported in their financial statements, with specific adjustments outlined by the law. The objective is to align with global best practices while maintaining the UAE’s competitiveness as a business hub.
Key Facts
- Enforced by the Federal Tax Authority (FTA)
- Applicable to both UAE-resident and non-resident businesses earning UAE-sourced income
- Based on accounting net profit in financial statements, with certain exemptions and deductions
Our Corporate Tax Services in the UAE
At Virtue Corporate Services, we offer tailored corporate tax support to help you understand, comply, and benefit under the new tax law.
Entity Classification
Registration with FTA
Compliance & Filing
Transfer Pricing Advisory
Audit-Ready Financial Statements
Structuring & Tax Planning
UAE Corporate Tax Rates (2025)
| Taxable Income | Corporate Tax Rate |
|---|---|
Up to AED 375,000 |
0% (Small business relief) |
Above AED 375,000 |
9% |
Multinational enterprises (MNEs) under Pillar Two (OECD BEPS) |
15% (if applicable) |
Note: The 0% rate encourages startups and small businesses, while the 9% rate ensures global tax competitiveness.
Exempted Entities from UAE Corporate Tax
Certain businesses and income categories are exempt from UAE corporate tax. These include:
- Government entities and government-controlled entities
- Extractive businesses (natural resource activities)
- Public and regulated pension and social security funds
- Qualifying investment funds
- Wholly owned UAE subsidiaries of exempted entities
- Certain income from foreign permanent establishments
We help assess your eligibility for exemption and manage all reporting obligations
Who is a Qualifying Free Zone Person (QFZP)?
A Qualifying Free Zone Person is a Free Zone business that meets all FTA conditions to enjoy 0% corporate tax on qualifying income.
QFZP Conditions
- Maintains adequate substance in the Free Zone (i.e., core income-generating activities and sufficient staff)
- Derives qualifying income (e.g., trading with other Free Zone entities or international clients)
- Complies with transfer pricing rules and documentation
- Prepares audited financial statements
- Does NOT earn non-qualifying income beyond limits (such as sales to mainland UAE)
Zero Tax Qualification Criteria for QFZPs
To maintain 0% corporate tax, the Qualifying Free Zone Person must:
- Derive only qualifying income or fall within the de minimis threshold for non-qualifying income
- Avoid earning income from UAE mainland customers unless specific criteria are met
- Submit all documentation, including financials and transfer pricing reports, on time
- Ensure ongoing compliance with FTA guidelines
Failure to meet conditions could result in full 9% taxation on entire income. We ensure you stay qualified and compliant.
Corporate Tax Applicability for Free Zone Companies
Free Zone businesses are subject to UAE corporate tax, but may benefit from preferential 0% tax rates if they meet specific conditions.
Types of Free Zones in the UAE.There are two main categories:
- Designated Free Zones – Also known as Qualifying Free Zones
- Non-Qualifying (or Ordinary) Free Zones
Not all Free Zones offer 0% tax benefits. Each Free Zone’s regulatory authority may differ in compliance expectations, requiring customized advice for businesses operating in:
- Meydan Free Zone
- SPC
- SHAMS
- IFZA, and others
Frequently Asked Questions
Yes, corporate tax applies to all businesses in the UAE, including Free Zone companies, unless exempt. However, only income exceeding AED 375,000 is taxed at 9%, while income below remains at 0%.
Not automatically. Only Qualifying Free Zone Persons who meet the required conditions benefit from the 0% tax on qualifying income. Other Free Zone companies may be subject to the standard 9% tax.
A QFZP is a Free Zone company that meets conditions such as having adequate substance, dealing mainly with Free Zone or foreign clients, and complying with audit and reporting rules.
Qualifying income includes transactions with other Free Zone entities, income from foreign clients, and certain passive income (e.g., dividends, capital gains, interest).
Yes, all businesses are required to register, even if their income is below the taxable threshold. This ensures compliance and eligibility for small business relief.
Non-compliance can lead to penalties for late registration, return submission, incorrect filings, and failure to maintain proper records. Penalties can be financial or administrative.
We provide full-service tax support—from registration and advisory to compliance, return filing, and tax planning. Our experts ensure you meet FTA requirements and benefit from available reliefs and exemptions.
Get Expert Corporate Tax Support with Virtue
Whether you’re a mainland company, Free Zone entity, or a startup, navigating the new corporate tax landscape can be complex. At Virtue Corporate Services, we simplify the process with expert-led, end-to-end tax solutions tailored to your business structure and industry.
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