Every new UAE company must register for corporate tax, generally within three months of incorporation, even if it expects no profit; late registration carries an AED 10,000 penalty. Corporate tax is 0% on taxable income up to AED 375,000 and 9% above it. VAT registration is mandatory once taxable supplies pass AED 375,000 in 12 months, and voluntary from AED 187,500.
Corporate tax
- Who registers: every company, including free zone companies.
- When: generally within three months of incorporation, through the EmaraTax portal.
- Rate: 0% on taxable income up to AED 375,000, then 9%.
- Free zones: a qualifying free zone person can pay 0% on qualifying income if it meets the conditions; it must still register and file.
- Return: filed once a year, within nine months of the end of your financial year.
VAT
- Mandatory once taxable supplies and imports pass AED 375,000 in the last 12 months, or are expected to within the next 30 days.
- Voluntary from AED 187,500, which lets you recover VAT on your costs.
- Rate: 5% standard.
- Deadline: apply within 30 days of crossing the mandatory threshold.
E-invoicing from 2027
The UAE is introducing mandatory e-invoicing in phases. Businesses with annual revenue of AED 50 million or more must appoint an accredited service provider by 30 October 2026 and go live on 1 January 2027. Businesses below AED 50 million must appoint a provider by 31 March 2027 and go live on 1 July 2027.
Record keeping
Keep your accounting records, invoices and contracts in order from day one. Corporate tax law requires records to be kept for seven years, and the tax authority can ask for them at any time.
Penalties to avoid
| Missed obligation | Penalty |
|---|---|
| Late corporate tax registration | AED 10,000 |
| Late VAT registration | AED 10,000 |
| Late returns or payments | Further penalties set by the tax authority |
Figures as published by the UAE Federal Tax Authority and Ministry of Finance at the time of writing.
Frequently asked questions
Do I need to register for corporate tax if I have no profit?
Yes. Registration is required whether or not tax is due. Missing the deadline carries an AED 10,000 penalty.
Do I need to register for VAT straight away?
Only once your taxable supplies pass AED 375,000 in 12 months. You can register voluntarily from AED 187,500.
Does e-invoicing apply to small businesses?
Yes, in the second phase. Businesses with revenue under AED 50 million must go live by 1 July 2027, unless the rules exclude them.
This guide is general information, not legal or tax advice. Government fees and rules change; your advisor confirms what applies to your company.
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