By Karun Reji, Chartered Accountant, BI-Outsource. General information, not tax or legal advice. Rules change: check the current position before you act.
Short answer: every UAE company and free zone entity must register for corporate tax, even if it expects to pay 0%. Late registration attracts an AED 10,000 administrative penalty. The FTA has offered a waiver where the business files its first corporate tax return within 7 months of the end of its first tax period, so late registrants should file on time to qualify.
Who must register
- All mainland and free zone companies, including those claiming qualifying free zone status.
- Foreign companies effectively managed and controlled in the UAE.
- Natural persons doing business in the UAE whose turnover exceeds AED 1 million in a year.
- Non-resident persons with a permanent establishment or nexus in the UAE.
Registration deadlines
| Entity | Deadline basis |
|---|---|
| Existing resident companies (before March 2024) | Set by the month the licence was issued, under FTA Decision No. 3 of 2024 |
| New companies incorporated from March 2024 | Within 3 months of incorporation |
| Natural persons | By 31 March of the following year once turnover exceeds AED 1 million |
Penalty and waiver
The late registration penalty is AED 10,000. The FTA's waiver initiative lets the penalty be waived or refunded if the first corporate tax return (or annual declaration for exempt persons) is filed within 7 months of the end of the first tax period. Check the current terms with the FTA, as initiatives have deadlines.
After registering
- Decide the financial year and first tax period.
- Keep accounts under IFRS (or IFRS for SMEs where allowed).
- Assess small business relief (revenue up to AED 3 million, for periods ending by 31 December 2026) or qualifying free zone status.
- File the return and pay tax within 9 months of the period end.
Need help? We register and file for UAE businesses. See accounting services in the UAE.
