In June 2023, the UAE introduced a federal Corporate Tax system with a standard rate of 9%, marking a new era in the country's economic landscape. This tax applies to businesses with annual net profits exceeding AED 375,000. While maintaining its position as a premier global business destination, the UAE now requires strict compliance with these new tax regulations.

At KVGC, we deliver comprehensive corporate tax services throughout Dubai and the UAE, specifically designed for your company's unique structure. We ensure complete regulatory compliance while implementing strategic approaches to optimize your tax position and maximize profitability.

Achieve Full Tax Compliance Today

Understanding UAE Corporate Tax

Corporate Tax in the UAE represents a direct levy on business profits, introduced as part of the country's alignment with global tax standards while preserving its business-friendly environment. The system balances international compliance with the UAE's commitment to economic growth.

Corporate Tax Rates in the UAE:

• 0% for taxable income below AED 375,000
• 9% for taxable income exceeding AED 375,000
• 15% for multinational enterprises under OECD BEPS Pillar Two provisions

Scope of UAE Corporate Tax:

• All UAE-based businesses (mainland and free zone establishments)
• International companies conducting business in the UAE
• Self-employed professionals exceeding income thresholds
• Foreign company branches operating within the UAE

Corporate Tax Exemptions:

• Government entities and affiliated organizations
• Natural resource extraction industries
• Approved public benefit organizations
• Qualifying investment and pension funds

Corporate Tax Regulations in the UAE

The corporate tax framework is established under Federal Decree-Law No. 47 of 2022, supplemented by relevant Cabinet and Ministerial Decisions. Key compliance requirements include:

1. Mandatory Tax Registration

All taxable entities must register with the Federal Tax Authority (FTA), irrespective of their revenue status. Registration deadlines vary based on business type and establishment date. Non-registration may result in penalties of AED 10,000.

2. Comprehensive Record Maintenance

Businesses must maintain complete financial documentation and audit trails, including:

• Financial records preserved for minimum 7 years
• Audited financial statements for Free Zone companies seeking 0% tax status
• Detailed documentation supporting income, expenses, and related-party transactions

3. Transfer Pricing Compliance

Companies engaging with related parties must adhere to OECD-aligned transfer pricing regulations:

• Maintain comprehensive Transfer Pricing Documentation
• Submit mandatory Disclosure Forms with tax returns
• Ensure all transactions meet arm's length standards
• Requirements apply equally to free zone entities claiming tax benefits

4. Penalty Structure

The FTA has established a clear penalty framework to ensure compliance:

• AED 10,000 for registration violations
• AED 500 to AED 20,000 for late filing offenses
• Up to 200% of unpaid tax for misdeclarations
• Additional penalties for documentation and reporting failures

Mainland vs. Free Zone Taxation

Corporate tax treatment varies between mainland and free zone establishments:

A. Mainland Companies:

Subject to standard 9% corporate tax on profits exceeding AED 375,000

B. Free Zone Companies:

Eligible for 0% corporate tax as Qualifying Free Zone Persons (QFZP) when meeting:

• Qualifying income from approved activities
• Adequate substance requirements (staff, premises, operations)
• Arm's length pricing in related-party transactions
• Non-election for standard tax treatment

Comprehensive Tax Services

Our corporate tax services encompass professional guidance and compliance solutions tailored to the UAE's regulatory environment. We provide end-to-end support including FTA registration, tax return preparation, strategic planning, transfer pricing documentation, audit readiness, and penalty management.

KVGC offers complete corporate tax solutions for businesses of all sizes and sectors across the UAE.

Our Corporate Tax Services

1. Tax Registration

• FTA registration assistance
• Optimal legal structure guidance
• Tax Registration Number acquisition

2. Tax Filing & Compliance

• Annual tax return preparation and submission
• Financial statement review and analysis
• Compliance with deductions and exemptions

3. Tax Planning & Optimization

• Tax efficiency strategies
• Business restructuring advisory
• Tax group formation guidance

4. Transfer Pricing Services

• OECD-compliant documentation
• Local and Master File preparation
• Related-party transaction compliance

5. Audit Support

• Tax audit preparation
• FTA representation
• Assessment response management

6. Penalty Resolution

• Penalty assessment and mitigation
• Reconsideration requests
• Voluntary disclosure handling

Additional Professional Services

• VAT Registration and Compliance
• VAT Deregistration Services
• Excise Tax Advisory
• Accounting and Bookkeeping
• Internal and External Audits
• Forensic Accounting Services
• Business Liquidation Support
• Tax Residency Certificates
• AML Compliance Solutions
• Dispute Resolution Services
• Payroll Management

For businesses establishing or expanding in the UAE, KVGC provides complete support including company formation, licensing, visa processing, and PRO services, serving as your comprehensive partner for business success in the UAE.

Begin Your Corporate Tax Journey Today

Corporate tax compliance is now mandatory in the UAE. Partner with KVGC to navigate the complexities of the new tax regime, avoid penalties, and protect your business's financial health. Contact us for a complimentary tax consultation and ensure your business remains compliant and strategically positioned for future growth.