UAE Corporate Tax applies to financial years starting on or after 1 June 2023. For many owner-managed businesses it is the first time that profit, rather than just turnover, has been measured and reported to the Federal Tax Authority. The headline rate of 9% on taxable income above AED 375,000 gets most of the attention, but the bigger change is in what the business has to be able to show.
Registration comes first
Most businesses must register for Corporate Tax whether or not they expect to pay any tax. Registration depends on your legal form and activities, not on your profit. Free zone companies, including those that may qualify for the 0% rate on qualifying income, are generally still required to register and file. If you have not confirmed your registration status, start there.
Your accounts are now your tax base
Corporate Tax starts from the accounting profit in your financial statements, then applies adjustments. That means the quality of your books directly affects the tax you pay and the risk you carry. Unreconciled balances, missing invoices or personal expenses mixed into company accounts all flow straight into the calculation.
- Keep a clean separation between company and personal spending.
- Reconcile bank, card and intercompany balances every month, not just at year end.
- Make sure revenue and expenses are recorded in the right period.
- Keep supporting documents for significant transactions in one organised place.
Know which adjustments apply to you
The taxable income calculation includes adjustments that do not appear in ordinary management accounts. Examples include limits on the deductibility of certain expenses, the treatment of transactions with related parties, and exempt income. Related-party transactions in particular need attention: they are expected to be on arm’s-length terms, and the business should be able to support how prices were set.
Build a tax calendar, not a year-end scramble
Returns are due within nine months of the end of the tax period. That sounds generous, but it overlaps with audit preparation, VAT filings and the day-to-day running of the business. The businesses that handle Corporate Tax calmly are the ones that treat it as part of the monthly close rather than a separate project once a year.
A practical checklist
- Confirm your registration and tax period.
- Review your chart of accounts so tax-relevant items are easy to identify.
- List your related parties and the transactions you have with them.
- Agree who prepares, reviews and approves the return, and by when.
- Schedule a pre-year-end review to catch issues while they can still be fixed.
Where we can help
At APEXBRIDGE we handle Corporate Tax registration, taxable income assessment, computations and return preparation, working from reconciled accounts so the numbers hold up. If you are unsure where your business stands, a short review now is far cheaper than correcting a filed return later. Read more about our Tax & VAT Advisory service.
This article is general information, not tax or legal advice. Rules change, and every business is different, so speak to an adviser about your own position before acting on it.