UAE Corporate Tax FAQs for SMEs, Free Zone Companies and Founders

UAE Corporate Tax is a federal tax imposed on the taxable income of corporations and businesses.

In simple terms, it is a tax on business profits after applying the adjustments, exemptions, reliefs and deductions allowed under the UAE Corporate Tax Law. The UAE Corporate Tax regime applies for financial years starting on or after 1 June 2023.

For most UAE SMEs, Corporate Tax is not only about calculating a 9% tax liability. It also creates registration, filing, record-keeping, accounting, Transfer Pricing and documentation obligations.

UAE Corporate Tax can apply to:

• UAE-incorporated companies and other UAE juridical persons.
• Foreign juridical persons that are effectively managed and controlled in the UAE.
• Non-resident persons that have a Permanent Establishment or taxable nexus in the UAE.
• Natural persons conducting a Business or Business Activity in the UAE where the relevant turnover threshold is exceeded.
• Free Zone juridical persons. A Free Zone Person may benefit from the 0% Free Zone Corporate Tax rate only if it qualifies as a Qualifying Free Zone Person and derives Qualifying Income. Other Taxable Income may be subject to the standard 9% rate.

Certain persons may be exempt, but exemption is not automatic for every entity and must be tested against the law and applicable Cabinet or Ministerial Decisions.

For most Taxable Persons, the standard UAE Corporate Tax rates are:

• 0% on Taxable Income up to and including AED 375,000.
• 9% on Taxable Income exceeding AED 375,000.

For a Qualifying Free Zone Person, the rate is:

• 0% on Qualifying Income.
• 9% on Taxable Income that is not Qualifying Income.

Large multinational groups may also be affected by the UAE Domestic Minimum Top-up Tax, which is separate from the usual SME Corporate Tax calculation.

UAE Corporate Tax is generally calculated on Taxable Income, not gross revenue.

Taxable Income usually starts from the accounting net profit or loss shown in the financial statements, then adjustments are made under the Corporate Tax Law. These adjustments may include Exempt Income, non-deductible expenses, Tax Losses, interest limitations, Related Party adjustments and other tax rules.

Revenue is still important for certain Corporate Tax purposes, such as Small Business Relief, accounting standards, cash basis eligibility and audit thresholds.

The AED 375,000 threshold applies per Taxable Person, not separately to each business line or each activity.

If one Taxable Person operates more than one business, the income is generally considered at the level of that Taxable Person. If a Tax Group is formed, the group is treated as a single Taxable Person for Corporate Tax purposes.

Artificially separating businesses to obtain multiple 0% bands may create anti-abuse and compliance risks.

They are different rules.

The AED 375,000 0% band applies under the normal Corporate Tax rate structure. Taxable Income up to AED 375,000 is taxed at 0%, and Taxable Income above that amount is taxed at 9%.

Small Business Relief is an optional relief for eligible Resident Persons whose Revenue does not exceed AED 3 million. If elected, the business is treated as having no Taxable Income for that Tax Period.

The key difference is that the 0% band is based on Taxable Income, while Small Business Relief is based on Revenue. Small Business Relief is currently available only for Tax Periods ending on or before 31 December 2026.

A business may use more than one company where there is a genuine commercial reason, such as different investors, risk separation, licensing needs or separate business lines.

However, artificially splitting one business mainly to obtain multiple tax benefits can create tax risk.

Risk indicators include the same owners, same management, same employees, same customers, shared assets, shared premises, or no clear commercial reason for the split.

If the FTA considers the separation artificial, the tax benefit may be denied and penalties may apply.

Corporate Tax is generally calculated by starting with the accounting net profit or loss shown in the financial statements, then applying the adjustments required under the Corporate Tax Law.

For example, if a business has Taxable Income of AED 1,000,000 and is not using Small Business Relief:

• AED 375,000 is taxed at 0%.
• AED 625,000 is taxed at 9%.
• Corporate Tax payable = AED 625,000 x 9% = AED 56,250.

This is a simplified example. The actual calculation may be affected by Exempt Income, disallowed expenses, Tax Losses, reliefs, foreign tax credits, related-party adjustments and Free Zone rules.

For juridical persons, the Tax Period is generally the financial year used for preparing financial statements. This is usually the Gregorian calendar year, unless the business uses another 12-month financial year.
For natural persons conducting a Business or Business Activity, the first possible Tax Period is the 2024 Gregorian calendar year.

In general, yes. UAE Taxable Persons must register for Corporate Tax and obtain a Corporate Tax Registration Number, even if no Corporate Tax is ultimately payable.

For juridical persons, there is no general profit threshold or revenue threshold that removes the need to register once the person is within the Corporate Tax regime. The registration deadlines depend on the category of the person and, for existing juridical persons, the original licence issuance month.

Audiix advisory note: Many business owners wrongly assume that Corporate Tax registration is required only when tax is payable. Registration, filing and payment are separate obligations.

The required information may depend on the legal form, licence type and EmaraTax profile, but businesses should usually have the following ready:

• trade licence;
• legal name and business activity details;
• ownership and shareholder information;
• authorised signatory details;
• Emirates ID and passport details, where applicable;
• contact details and registered address;
• financial year or Tax Period details;
• existing TRN, if already registered for VAT or Excise Tax;
• supporting constitutional documents, where requested.

The exact requirements may vary depending on whether the person is a UAE company, Free Zone entity, branch, natural person, partnership or other legal form.

Yes. VAT registration and Corporate Tax registration are separate obligations. A business that is already registered for VAT must still assess whether it is required to register for Corporate Tax.

VAT applies to taxable supplies, while Corporate Tax applies to taxable business profits. The two taxes have different rules, thresholds, filing obligations and penalties.

• A dormant UAE company may still need to register for Corporate Tax and file a Corporate Tax Return.

  Having no revenue, no profit, no bank activity or no tax payable does not automatically remove Corporate Tax obligations. The company should still maintain basic records showing its position for the relevant Tax Period.

  This may include the trade licence, financial statements or management accounts, bank statements, shareholder records and evidence that no business activity was carried out.

A Corporate Tax Return, and any Corporate Tax payable, must generally be submitted and paid within 9 months from the end of the relevant Tax Period.

Examples:

• Financial year ending 31 December 2024 -> filing and payment deadline: 30 September 2025.
• Financial year ending 31 March 2025 -> filing and payment deadline: 31 December 2025.

The FTA has reminded Taxable Persons, including Exempt Persons required to register, to submit their Tax Returns or annual declarations within the applicable 9-month period.

Yes. If the company is a Taxable Person required to file a Corporate Tax Return, it must generally file even if it made a loss or had no Corporate Tax payable.

Filing is also important because Tax Losses can only be managed properly if the tax position is reported and supported.

Some simple businesses may be able to file internally if their accounting records are complete and the tax position is straightforward.

However, professional review is recommended where the business has Free Zone income, Related Party transactions, owner or director remuneration, Tax Losses, foreign income, unclear deductions, poor bookkeeping, elections or relief claims.

Filing is not only about entering numbers into EmaraTax. The figures should be supported by reliable accounting records, tax adjustments and documentation in case the FTA requests evidence later.

The business should complete and clean up its accounting records before filing.

This usually includes reconciling bank accounts, reviewing sales and purchase invoices, checking expenses, separating personal and business costs, identifying Related Party and Connected Person transactions, reviewing fixed assets and preparing a Corporate Tax computation.

Filing without reliable accounting records can lead to incorrect tax positions, missed reliefs, wrong deductions, penalties and weak support if the FTA requests records. If records are incomplete, the safest approach is to prioritise bookkeeping cleanup and tax review before submitting the return.

Failure to submit a Corporate Tax registration application by the applicable deadline can result in an administrative penalty. For natural persons required to register, the FTA has referred to an AED 10,000 administrative penalty for missing the registration deadline.

The FTA has also introduced a waiver initiative for late Corporate Tax registration penalties. To qualify, a Taxable Person must submit the first Corporate Tax Return within 7 months from the end of the first Tax Period, and an Exempt Person required to register must submit the annual declaration within 7 months from the end of the first financial year.

Audiix advisory note: A missed registration deadline should be handled quickly. The corrective steps depend on whether the business has already registered, whether a penalty has been imposed, and whether the waiver conditions can still be met.

A natural person is subject to UAE Corporate Tax only if:

• they conduct a Business or Business Activity in the UAE; and
• their total turnover from such Business or Business Activities exceeds AED 1 million within the Gregorian calendar year.

Employment income, personal investment income and real estate investment income are not treated as Business or Business Activity income for this purpose.

This means a freelancer, sole establishment owner or individual partner may need to register and file if their UAE business turnover exceeds the AED 1 million threshold.

No. Salary, wages and similar employment income earned by an individual are not subject to UAE Corporate Tax in the employee’s hands.

However, where a shareholder, director or owner receives remuneration from a company, the company must consider whether the payment is deductible, commercially supportable and compliant with the Connected Person rules.

Generally, no. Personal investment income earned by a natural person in their personal capacity is not treated as income from a Business or Business Activity for UAE Corporate Tax purposes.

Examples may include personal dividends, interest and gains from personally held investments, provided the activity is not conducted as a licensed or commercial business activity.

• Real estate investment income earned by a natural person in a personal capacity is generally excluded from Corporate Tax, provided the activity does not require a UAE licence and is not conducted as a taxable Business or Business Activity.

  This should be assessed carefully where the individual is carrying out frequent property transactions, licensed property activity, development activity or other commercial real estate operations.

A juridical person is an entity with separate legal personality under UAE or foreign law. Common examples include:

• Limited liability companies.
• Private and public joint stock companies.
• Free Zone companies.
• Foundations and other entities with separate legal personality.

A UAE branch of a UAE company is generally not a separate juridical person. It is treated as part of the head office for Corporate Tax purposes.

A sole establishment is generally treated as part of the natural person who owns it, not as a separate juridical person.

Civil companies and other unincorporated partnerships require more careful analysis. They may be treated as transparent for Corporate Tax purposes unless they apply and are approved to be treated as a Taxable Person. The treatment depends on the legal form, arrangement and applicable Corporate Tax rules.

Small Business Relief allows an eligible Resident Person to be treated as having no Taxable Income for the relevant Tax Period, provided the conditions are met and the election is made.

The key threshold is Revenue of AED 3 million or below in the relevant Tax Period and all previous Tax Periods. The relief is available only for Tax Periods ending on or before 31 December 2026.

No. Small Business Relief must be elected for the relevant Tax Period.

A business should not assume that no Corporate Tax compliance is required simply because revenue is below AED 3 million. Eligible businesses still need to register, file, elect the relief in the Corporate Tax Return and maintain proper records.

Small Business Relief is not available to:

• Qualifying Free Zone Persons.
• Members of multinational enterprise groups that meet the relevant consolidated revenue threshold.
• Persons that do not meet the Resident Person and Revenue conditions.

Businesses should also consider whether electing Small Business Relief is commercially sensible, particularly where they have losses, financing costs, relief claims or related-party transactions.

No. Small Business Relief is based on Revenue, not profit.

A business with low profit but Revenue above AED 3 million will not qualify for Small Business Relief. A business with Revenue of AED 3 million or below may qualify if it meets the remaining conditions and makes the election.

Under the current rules, Small Business Relief applies only to Tax Periods ending on or before 31 December 2026.

After that, eligible businesses will need to calculate Corporate Tax under the normal rules, unless the relief is extended or replaced. This does not automatically mean tax will be payable, because the AED 375,000 0% band, Tax Losses, Exempt Income and other adjustments may still apply.

Businesses should prepare early by maintaining proper books, reviewing expenses and estimating their future Corporate Tax position.

Yes.

If a business elects Small Business Relief, it is treated as having no Taxable Income for that Tax Period. As a result, it generally cannot use or generate Tax Losses for that period.

The election can also affect interest deduction rules and other reliefs.

This means Small Business Relief should not be elected automatically. A business should first compare the tax outcome with and without the relief, especially if it has losses, financing costs or expects future profits.

No. A Free Zone company does not automatically qualify for the 0% Corporate Tax rate.

To benefit from the Free Zone Corporate Tax regime, the entity must qualify as a Qualifying Free Zone Person and must derive Qualifying Income. It must also satisfy conditions relating to substance, audited financial statements, Transfer Pricing and other Free Zone requirements.

Audiix advisory note: “Free Zone company” and “Qualifying Free Zone Person” are not the same thing. A Free Zone licence alone does not guarantee the 0% Corporate Tax rate.

A Qualifying Free Zone Person is a Free Zone Person that meets the relevant conditions under the Corporate Tax Law and related decisions. These include, in broad terms:

• maintaining adequate substance in the UAE;
• deriving Qualifying Income;
• not electing to be subject to the regular Corporate Tax regime;
• complying with the arm’s length principle and Transfer Pricing rules;
• maintaining audited financial statements;
• satisfying the de minimis and other applicable requirements.

The rules must be tested annually.

Qualifying Income is income that qualifies for the 0% Free Zone Corporate Tax rate. The classification depends on the type of income, the counterparty, the activity, whether the income is from an Excluded Activity, and whether the de minimis requirement is met.

The Free Zone regime is governed by Cabinet Decision No. 100 of 2023 and the relevant Ministerial Decisions, including Ministerial Decision No. 229 of 2025 on Qualifying Activities and Excluded Activities.

Qualifying Activities and Excluded Activities are specific categories used to determine whether Free Zone income can qualify for the 0% Corporate Tax rate.

The list is technical and should be mapped against the business licence, actual operations, customer contracts, invoices, substance and accounting records. Ministerial Decision No. 229 of 2025 updated the Qualifying Activities and Excluded Activities framework and replaced the previous Ministerial Decision No. 265 of 2023.

The de minimis requirement allows a limited amount of non-qualifying revenue without automatically disqualifying the Free Zone Person from the 0% regime, provided the threshold is not exceeded and the other conditions are met.

Broadly, non-qualifying revenue must not exceed the lower of AED 5 million or 5% of total revenue, subject to the detailed rules and exclusions. This should be tested carefully using reliable accounting records.

Not always, but they require careful analysis.

A Qualifying Free Zone Person may have some income taxed at 0% and some income taxed at 9%, depending on the counterparty, activity, source of income, existence of a mainland or foreign Permanent Establishment, immovable property income, Excluded Activities and the de minimis rules.

Income attributable to a mainland UAE Permanent Establishment or a foreign Permanent Establishment is generally taxed at 9%, subject to applicable reliefs and detailed rules.

A Free Zone company should not rely only on its licence.

To support Qualifying Free Zone Person status, it should keep records such as:

• Free Zone licence and activity details.
• Office lease and substance evidence.
• Employee and management records.
• Contracts and invoices.
• Customer and supplier classification.
• Income analysis by activity.
• De minimis calculation.
• Mainland transaction analysis.
• Audited financial statements.
• Transfer Pricing support, where relevant.

The company should be able to prove that it meets the conditions for the 0% Free Zone Corporate Tax regime.

If a Free Zone Person fails to meet the conditions to be a Qualifying Free Zone Person, it may lose access to the 0% Free Zone Corporate Tax regime.

In general, failure can result in the entity ceasing to be a Qualifying Free Zone Person from the beginning of the relevant Tax Period and for the following four Tax Periods.

Yes. A Qualifying Free Zone Person must prepare and maintain audited financial statements.

Separately, a Taxable Person that is not a Tax Group and has Revenue exceeding AED 50 million during the relevant Tax Period must also prepare and maintain audited financial statements. Tax Groups have special-purpose financial statement and audit rules under the updated 2025 framework.

Financial statements for UAE Corporate Tax purposes should generally be prepared under IFRS.

IFRS for SMEs may be used where Revenue does not exceed AED 50 million. The cash basis of accounting may be available where Revenue does not exceed AED 3 million or in exceptional circumstances, subject to the applicable rules.

Taxable Income starts with accounting net profit or loss, then adjustments are made under the Corporate Tax Law.

Common adjustments may include:

• Exempt Income, such as certain dividends and qualifying participation income.
• Non-deductible expenses.
• Interest deduction limitations.
• Related Party and Connected Person adjustments.
• Unrealised gains or losses, depending on the applicable elections and rules.
• Tax Loss relief.
• Qualifying Group Relief or Business Restructuring Relief, where conditions are met.

The calculation should be supported by reconciled accounting records and working papers.

Not always, but the business must maintain proper financial records and be ready to provide them if requested by the FTA.

Some businesses must prepare and maintain audited financial statements, including:

• a Taxable Person with Revenue exceeding AED 50 million in the relevant Tax Period; and
• a Qualifying Free Zone Person.

Even where audited financial statements are not required, the Corporate Tax Return should be supported by clear accounting records, reconciliations and working papers.

It depends on the taxpayer and the type of income.

A UAE Resident company is generally subject to Corporate Tax on both UAE and foreign income, unless an exemption or relief applies.

Some income may be exempt, such as certain dividends and income from a qualifying ownership interest under the Participation Exemption rules. Foreign tax credits may also be available where foreign tax has been paid on income that is taxable in the UAE.

Foreign income, dividends and capital gains should therefore be reviewed carefully before filing the Corporate Tax Return.

In general, gains from the disposal of business assets are included in Taxable Income unless a specific exemption or relief applies.

Gains on shares or ownership interests may be exempt under the Participation Exemption if the relevant conditions are met. Dividends from UAE juridical persons are generally exempt, while dividends and gains from foreign entities require assessment under the Participation Exemption rules.

The Participation Exemption is a Corporate Tax exemption that may apply to income from a qualifying ownership interest, such as dividends and capital gains from qualifying shareholdings.

The purpose is to reduce double taxation where the underlying investee company has already been taxed or satisfies the relevant conditions. The conditions must be tested carefully, especially for foreign subsidiaries, holding companies and group structures.

Generally, expenses are deductible if they are incurred wholly and exclusively for the purposes of the business and are not disallowed or restricted under the Corporate Tax Law.

Examples of expenses that commonly require review include:

• owner salaries and director fees;
• related-party management fees;
• interest and financing costs;
• entertainment expenses;
• penalties and fines;
• expenses linked to Exempt Income;
• mixed-use or personal expenses;
• provisions and impairments;
• capital expenditure and depreciation.

Good bookkeeping is essential because the tax calculation starts from the accounting records.

Non-deductible or restricted expenses may include:

• bribes and illegal payments;
• fines and penalties, except where compensatory in nature;
• Corporate Tax payable;
• dividends and profit distributions;
• expenses incurred to derive Exempt Income;
• donations, grants or gifts made to non-qualifying recipients;
• expenditure not incurred for the purposes of the business;
• excessive payments to Connected Persons above market value.

Each category must be reviewed against the Corporate Tax Law and the supporting accounting records.

Entertainment expenses for customers, shareholders, suppliers and other business partners are restricted under the Corporate Tax Law.

A business should distinguish between:

• customer or supplier entertainment;
• shareholder or investor entertainment;
• employee welfare and staff events;
• mixed events involving employees and external business partners.

The tax treatment depends on the purpose, attendees, invoices, supporting documents and whether the expense falls within a restricted category.

Recoverable input VAT is generally not a deductible expense because it is recoverable from the FTA and should not be treated as a cost of the business.

Irrecoverable input VAT may form part of the deductible cost, provided the underlying expense is deductible for Corporate Tax purposes and is properly supported.

Bad debts, impairment losses and expected credit loss provisions should be assessed based on the accounting treatment and the Corporate Tax rules.

A deduction is more defensible where the business has proper evidence, such as:

• customer ageing reports;
• collection history;
• correspondence with the debtor;
• management approval for write-off;
• legal or recovery steps, where relevant;
• consistent accounting policy.

A generic provision with weak support may create tax risk.

A Related Party usually refers to a person or entity connected through ownership, control, family relationship, partnership or common control.

A Connected Person is especially relevant for payments or benefits made to owners, directors, officers, partners or persons connected to them.

In simple terms:

• Related Party rules mainly affect transactions between connected businesses or persons.
• Connected Person rules are especially important for owner salaries, director fees, management payments and family-related payments.

Both require proper commercial support and arm’s length evidence.

Salaries, director fees, management remuneration and similar payments may be deductible if they are incurred for business purposes and are commercially supportable.

Where the recipient is a Connected Person, the deduction is generally limited to the market value of the service or benefit. The business should keep evidence of the person’s role, responsibilities, time commitment, qualifications, approval process and market benchmarking.

The FTA issued a 2026 public clarification on the meaning of “director” and “officer” for Connected Person payment purposes. This makes owner-manager and director remuneration an important review area before filing.

Payments to owners, directors, managers and other Connected Persons should be commercially supportable.

Useful evidence includes:

• employment contract or service agreement;
• job title and role description;
• proof of actual work performed;
• salary or bonus calculation;
• market salary benchmarking;
• board or shareholder approval;
• payroll and payment records;
• performance targets, where bonuses are paid.

The payment should reflect genuine work or services, not simply profit extraction from the company.

Yes, they can. Transfer Pricing rules apply to transactions with Related Parties and Connected Persons, whether the parties are in the UAE mainland, a Free Zone or another country.

Examples include:

• shareholder or director remuneration;
• intercompany management fees;
• loans and funding balances;
• shared staff or shared office costs;
• cost recharges;
• IP, brand or software charges;
• purchases or sales between group companies.

The key principle is that transactions should be priced on an arm’s length basis, as if they were between independent parties.

Not always. The level of documentation depends on the nature and value of the transactions, the parties involved and the applicable thresholds.

However, even where a full Master File or Local File is not required, businesses should still keep enough evidence to support Related Party and Connected Person transactions. This is especially important for owner-managed companies, Free Zone companies, groups and businesses with cross-border arrangements.

Shareholder loans and intercompany balances are not automatically taxable just because they appear in the accounts.

The tax treatment depends on what the balance represents, such as a loan, unpaid invoice, advance, capital contribution, dividend, recharge or settlement account.

The business should keep clear evidence, including agreements, repayment terms, interest calculations, board approvals, confirmations and accounting records.

Where the parties are Related Parties or Connected Persons, Transfer Pricing and arm’s length rules may also apply.

A Tax Loss arises when deductible expenses and other allowable deductions exceed taxable income for a Tax Period.

Subject to conditions, Tax Losses can be carried forward and used against future Taxable Income. The offset is generally limited to 75% of Taxable Income in a future Tax Period, with unused losses carried forward indefinitely.

In some cases, yes. UAE Corporate Tax allows Tax Losses to be transferred between certain group companies where the required ownership and other conditions are met.

This is different from forming a Tax Group and should be reviewed separately. Group loss planning should be supported by ownership records, financial statements and tax computations.

Qualifying Group Relief may allow certain transfers of assets or liabilities between qualifying group members to take place without immediate Corporate Tax impact, provided the conditions are met.

This can be relevant for restructurings, asset transfers, group simplification and internal reorganisations. The relief must be applied carefully because clawback rules may apply if conditions are breached after the transfer.

Business Restructuring Relief may apply to certain transfers of a whole business or an independent part of a business in exchange for shares or other ownership interests, provided the conditions are met.

This relief can be relevant for mergers, demergers, business transfers, group restructurings and succession planning. It should be assessed before the transaction is implemented, not after.

Yes. Certain UAE Resident juridical persons may apply to form a Tax Group if the conditions are met. In broad terms, the parent company must hold at least 95% of the relevant ownership interests in the subsidiary, and other conditions must be satisfied.

A Tax Group is treated as a single Taxable Person for Corporate Tax purposes. It must prepare aggregated financial statements for determining Taxable Income, and special audit requirements may apply.

Exempt Persons may include:

• UAE Federal and Emirate Government Entities.
• Certain Government Controlled Entities.
• Extractive Businesses and Non-Extractive Natural Resource Businesses that meet the conditions.
• Qualifying Public Benefit Entities.
• Qualifying Investment Funds.
• Public or private pension and social security funds that meet the conditions.
• Certain wholly owned and controlled entities of Exempt Persons.

Some exemptions are automatic, some require notification, some require listing by Cabinet Decision, and some require application to and approval by the FTA.

Cabinet Decision No. 55 of 2025 expanded aspects of the Corporate Tax exemption framework, including for certain foreign entities owned by specified Exempt Persons.

The UAE Corporate Tax regime includes a 0% Withholding Tax rate on certain UAE-sourced income paid to non-residents.

In practice, this generally means no UAE Withholding Tax is payable and there are no separate Withholding Tax registration or filing obligations in many common cases. However, the position should be checked for non-residents with a UAE Permanent Establishment, UAE nexus or UAE immovable property income.

Yes. Large multinational enterprise groups may be affected by the UAE Domestic Minimum Top-up Tax.

The UAE DMTT applies to UAE entities that are members of multinational enterprise groups with annual global revenues of EUR 750 million or more in the consolidated financial statements of the Ultimate Parent Entity in at least two of the four financial years immediately preceding the relevant year.

For most UAE SMEs, this is not expected to apply, but subsidiaries of large international groups should assess the rules carefully.

The UAE has introduced a Research and Development Tax Credit framework. Cabinet Decision No. 215 of 2025 and Ministerial Decision No. 24 of 2026 relate to the R&D tax credit rules, and the UAE announced Phase 1 of the R&D Tax Incentives Programme in March 2026.

This is a specialist area. Businesses should not assume that ordinary software, product development or internal process improvement costs automatically qualify. Eligibility, documentation and claim procedures should be reviewed before relying on the incentive.

Yes. Taxable Persons must keep records and documents supporting the information in their Corporate Tax Return and any other filing submitted to the FTA.

The FTA has emphasised the importance of retaining records and documentation to support Corporate Tax return information.

Corporate Tax records and supporting documents should generally be retained for 7 years after the end of the relevant Tax Period.

Records should include, where relevant:

• financial statements;
• general ledger and trial balance;
• invoices and receipts;
• bank statements and reconciliations;
• payroll and owner remuneration support;
• contracts and agreements;
• Related Party and Connected Person documentation;
• tax computation working papers;
• evidence for reliefs, exemptions and elections.

The FTA may request financial statements and supporting records in the prescribed form and manner.

Some businesses must prepare and maintain audited financial statements, including Qualifying Free Zone Persons and Taxable Persons with Revenue exceeding AED 50 million, subject to the detailed rules. Tax Groups have separate special-purpose financial statement requirements.

A private clarification may be useful where the Corporate Tax treatment is unclear, material and depends on specific facts.

It may be relevant for:

• complex Free Zone or QFZP issues;
• uncertain Permanent Establishment or nexus positions;
• major restructurings;
• complex Related Party transactions;
• unusual income or exemption questions;
• significant transactions not clearly covered by public guidance.

A private clarification should not be used for general questions already answered by the law, FTA guides or public clarifications.

A practical Corporate Tax readiness process should include:

• confirming the legal form and Taxable Person status;
• checking Corporate Tax registration status and deadlines;
• confirming the first Tax Period and filing deadline;
• reviewing accounting records and financial statements;
• assessing Small Business Relief eligibility;
• testing Free Zone 0% eligibility, if relevant;
• identifying Related Party and Connected Person transactions;
• reviewing owner salaries, director fees and management charges;
• preparing the Corporate Tax computation;
• maintaining supporting records for at least 7 years;
• filing the Corporate Tax Return and paying any liability on time.

Not every business will need the same level of support, but Corporate Tax advice is not only about submitting a form.

A good accountant or tax advisor helps confirm the tax position, review the accounting records, identify elections and reliefs, assess Free Zone or Related Party issues, review owner remuneration and prepare documentation to support the filing.

Professional support is especially important where the business has complex facts, weak bookkeeping, Free Zone income, group transactions, shareholder loans, foreign income, Tax Losses or uncertainty about deductions.

Audiix supports UAE SMEs, Free Zone companies, expat founders and foreign-owned businesses with practical Corporate Tax compliance and advisory support.

Our Corporate Tax services include:

• Corporate Tax registration.
• Corporate Tax return filing.
• Small Business Relief assessment.
• Free Zone Corporate Tax review.
• QFZP eligibility assessment.
• Corporate Tax computation and working papers.
• Transfer Pricing review and documentation.
• Connected Person and owner remuneration review.
• Accounting records and tax-ready bookkeeping.
• Tax Loss and group relief assessment.
• Corporate Tax health checks before filing.

Need clarity before filing? Audiix can review your accounting records, tax position and filing obligations before the deadline, so you know what applies, what does not, and what needs to be documented.