Every company incorporated in the UAE, mainland or free zone, must register for corporate tax with the Federal Tax Authority (FTA), file one return per tax period on EmaraTax, and pay any tax due within 9 months of the end of that period. The rate is 0% on the first AED 375,000 of taxable income and 9% above it. This applies even if the company made no profit, had no revenue, or expects to pay 0%. This guide is for small companies: mainland LLCs, free zone companies and one-person companies. It covers registration, the first return, due dates, Small Business Relief, penalties, a worked computation, and what your books need to show. If you work as an individual under a freelance permit or sole establishment, the rules are different: read corporate tax for UAE freelancers instead. This is general information, not tax advice.
Which small companies have to register for UAE corporate tax?
All of them. The corporate tax law (Federal Decree-Law No. 47 of 2022) treats every juridical person incorporated in the UAE as a taxable person. The Ministry of Finance states it plainly: all taxable persons, including free zone persons, must register and obtain a corporate tax registration number.
| Company type | Must register? | Notes |
|---|---|---|
| Mainland LLC | Yes | Regardless of revenue or profit |
| One-person company (single-owner LLC) | Yes | It is a juridical person, so the AED 1 million turnover test for individuals does not apply |
| Free zone company (FZ-LLC, FZCO, FZE) | Yes | Including companies that expect the 0% free zone rate |
| Dormant company or company with no revenue | Yes | Registration and a return are still required |
| Individual freelancer or sole establishment | Only above AED 1 million turnover in a calendar year | Covered in the freelancer guide linked above |
There is no revenue threshold for companies. That is the main difference from VAT, where registration becomes mandatory only above AED 375,000 of taxable supplies. See UAE VAT registration for small businesses for the VAT side.
When is the corporate tax registration deadline?
FTA Decision No. 3 of 2024, in force since 1 March 2024, sets the timelines.
Deadline: A company incorporated or registered in the UAE on or after 1 March 2024, including in a free zone, must apply for corporate tax registration within 3 months of its date of incorporation.
For a company set up on 10 August 2026, that means an application on EmaraTax by 10 November 2026. The clock starts at incorporation, not at the first sale.
Companies that already existed before 1 March 2024 were given staggered deadlines between 31 May 2024 and 31 December 2024, set by the month the trade licence was issued. All of those dates have passed. A company that existed before March 2024 and has never registered is late, and the next section applies.
What is the penalty for registering late, and can it be waived?
Threshold: Late corporate tax registration carries a fixed administrative penalty of AED 10,000 (Cabinet Decision No. 75 of 2023, as amended by Cabinet Decision No. 10 of 2024).
The FTA runs a waiver initiative for this penalty. The condition is one thing: submit the first corporate tax return within 7 months of the end of the first tax period, instead of the usual 9 months. If you meet it, the penalty is waived automatically, and if you already paid it, the amount is credited back to your tax account. No separate waiver request is needed.
As of September 2026 the FTA's waiver page lists no end date for the initiative, but it only ever applies to the first tax period. A new company whose first period ends on 31 December 2026 has until 31 July 2027. Check the FTA page before relying on it, because an initiative can be closed.
What is a tax period, and when is the return due?
The tax period is the company's financial year: the 12-month period its financial statements cover. For most small companies that is the calendar year. A newly incorporated company's first period can be shorter or longer than 12 months, depending on the financial year in its constitutional documents. FTA guidance generally allows a first period of between 6 and 18 months.
Deadline: The corporate tax return and the payment are both due within 9 months of the end of the tax period. There is one return per period and no quarterly or advance instalments.
| Financial year end | Return and payment due | 7-month date (first period only, for the late-registration waiver) |
|---|---|---|
| 31 December 2025 | 30 September 2026 | 31 July 2026 |
| 31 March 2026 | 31 December 2026 | 31 October 2026 |
| 30 June 2026 | 31 March 2027 | 31 January 2027 |
| 30 September 2026 | 30 June 2027 | 30 April 2027 |
| 31 December 2026 | 30 September 2027 | 31 July 2027 |
A company with no activity still files. A company electing Small Business Relief still files.
What goes into the corporate tax return on EmaraTax?
The return is completed online in EmaraTax, and the figures are keyed in. The FTA's Tax Returns Guide describes a main form plus up to 20 schedules, and the portal only shows the schedules that apply to your company.
For a small company, expect to provide:
- Financial statements for the period, attached to the return.
- Accounting income: revenue, expenses and net profit or loss as shown in those statements.
- Adjustments from accounting profit to taxable income: non-deductible expenses added back, exempt income removed.
- Elections and reliefs, including Small Business Relief, and any tax losses brought forward.
- Related party and connected person information where it applies. The detailed schedules only open above set values, so most small companies will not complete them, but payments to owners and directors still have to be at market value.
The adjustments small companies meet most often: entertainment of customers and suppliers is only 50% deductible, fines and penalties are not deductible, and dividends received from UAE companies are exempt.
How much corporate tax does a small company pay?
| Taxable income | Rate |
|---|---|
| Up to AED 375,000 | 0% |
| Above AED 375,000 | 9% |
The rate applies to taxable income, which is accounting profit after the adjustments above. It does not apply to revenue.
Worked example: a mainland LLC with AED 900,000 of taxable income
A Dubai trading LLC has a 31 December 2025 year end.
| Line | AED |
|---|---|
| Revenue | 2,600,000 |
| Expenses in the accounts | (1,720,000) |
| Accounting profit | 880,000 |
| Add back: 50% of AED 30,000 client entertainment | 15,000 |
| Add back: traffic and municipality fines | 5,000 |
| Taxable income | 900,000 |
| First AED 375,000 at 0% | 0 |
| Remaining AED 525,000 at 9% | 47,250 |
| Corporate tax due by 30 September 2026 | 47,250 |
Check: 880,000 + 15,000 + 5,000 = 900,000. Then 900,000 − 375,000 = 525,000, and 525,000 × 9% = 47,250.
The same company electing Small Business Relief
Revenue is AED 2,600,000, which is below AED 3 million. If revenue in every earlier tax period was also AED 3 million or less, the company can elect Small Business Relief in the return. It is then treated as having no taxable income for the period, and the tax due is AED 0 instead of AED 47,250. The return is still filed by 30 September 2026, in a shorter form.
How does Small Business Relief work for a company?
Threshold: Small Business Relief is available to a UAE resident company with revenue of AED 3 million or less in the tax period and in every previous tax period. Ministerial Decision No. 131 of 2026 extended it to tax periods ending on or before 31 December 2029. Older articles saying it ends in December 2026 are out of date.
Points that matter in practice:
- It is an election made in the return, period by period. It is never automatic, and you must be registered to make it.
- The test is revenue, not profit. Once revenue exceeds AED 3 million in any period, the relief is lost for that period and all later ones.
- Losses are not created or used in an elected period. A loss-making company is usually better off not electing, so the loss is kept for later years.
- Not available to Qualifying Free Zone Persons or to members of large multinational groups.
- Splitting one business into several companies to stay under AED 3 million can be challenged by the FTA under the anti-abuse rules.
What about free zone companies and the 0% rate?
A free zone company can pay 0% on its qualifying income if it is a Qualifying Free Zone Person (QFZP). The status does not come automatically with a free zone licence. The conditions, in outline:
- Adequate staff, assets and spending in the free zone for the activity carried out.
- Income from qualifying activities or from transactions with other free zone persons, as defined in Ministerial Decision No. 229 of 2025. Ordinary services or retail sales to mainland customers generally do not qualify.
- Non-qualifying revenue within the de minimis limit: the lower of 5% of total revenue or AED 5 million.
- Audited financial statements, whatever the company's size.
A QFZP pays 9% on non-qualifying income with no AED 375,000 zero band, and cannot elect Small Business Relief. A company that fails the conditions loses QFZP status for that period and the following four. Many small free zone service companies end up taxed like a mainland company: 0% to AED 375,000, 9% above, with Small Business Relief if revenue is under AED 3 million. Take professional advice before choosing.
What financial statements and records does a small company need?
| Requirement | Rule |
|---|---|
| Accounting standard | IFRS. Companies with revenue up to AED 50 million may use IFRS for SMEs (Ministerial Decision No. 114 of 2023) |
| Cash basis | Allowed where revenue does not exceed AED 3 million. Above that, accrual basis |
| Audit | Required where revenue exceeds AED 50 million, and for every QFZP (Ministerial Decision No. 84 of 2025). Your free zone authority or bank may require an audit anyway |
| Record retention | 7 years after the end of the tax period the records relate to |
A small mainland LLC does not need an audit for corporate tax. It does need a profit and loss statement and a balance sheet for the period that agree with the numbers typed into the return.
What your books need to show
- Revenue for the period on a consistent basis, because the AED 3 million Small Business Relief test and the choice of cash or accrual basis both depend on it.
- Expenses by category, each with its invoice or receipt, so every deduction can be supported for 7 years. See tracking business expenses without a bookkeeper.
- Entertainment, fines and penalties in their own accounts, so the add-backs take minutes and not days.
- Owner transactions kept out of the profit and loss. Capital introduced, drawings, dividends and shareholder loans belong on the balance sheet. A salary paid to an owner-manager must be at a market rate.
- A balance sheet that balances: bank, receivables, payables, VAT, fixed assets, loans and equity.
- VAT and corporate tax revenue that reconcile. If turnover in your VAT returns differs from your financial statements, know why.
From the platform: Staks keeps double-entry books underneath your daily documents. Invoices, credit notes, expenses, bills and payroll post to the ledger automatically, and the journal links every entry to the document behind it. Under Reports you get a profit and loss, balance sheet, cash flow, trial balance and account transactions for any period, and you can save them as PDF or invite your accountant as a user. Accounting and reports are on the Growth plan ($49 per month) and above; invoicing and expenses are on Starter ($19). Staks does not file corporate tax returns, does not connect to EmaraTax and does not calculate the tax adjustments. You or your tax agent take the figures from the reports and enter them in the FTA portal.
What are the penalties for late filing and late payment?
These amounts come from Cabinet Decision No. 75 of 2023, which sets the corporate tax penalties. The penalty reform that took effect on 14 April 2026 (Cabinet Decision No. 129 of 2025) changed VAT and excise penalties, and advisers report the corporate tax schedule below is unchanged. Confirm current amounts with the FTA or a tax agent before relying on them.
| Violation | Penalty |
|---|---|
| Late registration | AED 10,000 (waivable under the 7-month initiative) |
| Late tax return | AED 500 per month or part of a month for the first 12 months, then AED 1,000 per month |
| Late payment | 14% per year on the unpaid tax, charged monthly from the day after the due date |
| Failure to keep required records | AED 10,000 per violation, AED 20,000 for a repeat within 24 months |
Example: the LLC above files and pays 3 months late. Late filing is 3 × AED 500 = AED 1,500. Late payment is roughly 47,250 × 14% × 3 ÷ 12 = AED 1,654. Total about AED 3,150 on top of the tax.
How do tax losses carry forward?
A tax loss can be carried forward indefinitely and set against future taxable income, but the amount used in any one period is capped at 75% of that period's taxable income before loss relief. Ownership continuity conditions also apply.
Example: a company brings forward losses of AED 1,000,000 and earns taxable income of AED 900,000. It can use 900,000 × 75% = AED 675,000 of losses. Taxable income becomes 900,000 − 675,000 = AED 225,000, which is inside the 0% band, so no tax is due. The remaining 1,000,000 − 675,000 = AED 325,000 of losses carries forward. Losses from before the company's first tax period, and losses from periods where Small Business Relief was elected, cannot be used.
Frequently asked questions
My company made no profit this year. Do I still have to file?
Yes. Registration and the annual return are required for every UAE company whatever the result. A nil or loss return filed late still attracts the AED 500 per month penalty.
Does a free zone company with a 0% rate still register and file?
Yes. Free zone companies are taxable persons. The 0% rate applies only to qualifying income of a company that meets the QFZP conditions, and meeting them includes filing a return and having audited financial statements.
Does a small LLC need audited accounts for corporate tax?
Not for corporate tax if revenue is AED 50 million or less and the company is not a QFZP. It still needs financial statements under IFRS or IFRS for SMEs, and it may use the cash basis if revenue does not exceed AED 3 million.
Is the corporate tax registration number the same as the VAT TRN?
No. They are separate registrations made through the same EmaraTax account, and a company can need one without the other. A company with AED 200,000 of revenue must register for corporate tax but is below the mandatory VAT threshold. VAT records must be kept for 5 years and corporate tax records for 7, so keeping everything for 7 years is the simpler rule.
Related reading
- Do freelancers pay corporate tax in the UAE?
- UAE VAT registration for small businesses
- UAE e-invoicing: the July 2027 checklist
- The best accounting software in the UAE
Register within 3 months of incorporation, keep books that produce a profit and loss and a balance sheet, and file within 9 months of your year end even when the tax is zero. Start a 14-day free trial of Staks to keep the ledger current, so the return starts from finished statements.