The introduction of Corporate Tax in the UAE has implemented a number of compliance obligations that apply to both resident and non-resident taxpayers. It is critical for business owners and entrepreneurs to understand these requirements, as the Corporate Tax regime imposes specific timelines for registration, financial reporting, and tax return filing. Below is a detailed overview of the core compliance obligations that businesses should be aware of.
1. Corporate Tax registration
All businesses that fall within the scope of the Corporate Tax Law must register with the Federal Tax Authority (FTA), even if they do not expect to pay tax.
Resident taxpayers, including mainland and free zone entities, are required to register for corporate tax regardless of whether they earn taxable income or expect to claim reliefs or exemptions. This includes natural persons carrying on a business or business activity in the UAE once their revenue exceeds AED 1 million in a Gregorian calendar year.
Non-resident taxpayers must also register if they have a Permanent Establishment (PE) or nexus in the UAE. A foreign company with no PE or nexus in the UAE does not need to register, even if it derives UAE sourced income which is subject to withholding tax, as the currently rate is set at 0%.
The FTA has issued separate timelines for when different types of taxpayers must complete registration, and late registration penalties may apply. In general, newly established businesses must register within three months following their date of incorporation.
2. Requirement to maintain Audited Financial Statements
Under the UAE Corporate Tax framework, certain businesses are required to maintain audited financial statements, namely:
- Businesses with revenue exceeding AED 50 million, and
- Qualifying Free Zone Persons (QFZPs) seeking to benefit from the 0% Free Zone corporate tax regime.
It is worth noting, however, that most UAE companies were already required to prepare and maintain audited financial statements under commercial, licensing or regulatory obligations (for example, under the Commercial Companies Law, free zone regulations, or sector-specific rules). As a result, the corporate tax audit requirement generally affects only those businesses that previously operated without any mandatory audit obligations and must now adopt formal audit processes for tax compliance.
For these businesses, the new requirement represents a significant change. Preparing audited financial statements requires proper bookkeeping, timely closing processes, and adherence to the applicable accounting standards, and businesses should ensure they have the right systems in place well before their first tax filing deadline.
3. Standalone Financial Statements
For corporate tax purposes, businesses must prepare standalone financial statements for each entity within a group, even if they normally prepare consolidated accounts for other purposes. Taxable income and adjustments are computed based on the standalone results of the individual entity.
Financial statements must be prepared using one of the following accounting frameworks:
- International Financial Reporting Standards (IFRS), or
- IFRS for SMEs, where applicable based on the size and nature of the entity.
This requirement applies to resident taxpayers as well as to non- resident taxpayers that have a Permanent Establishment in the UAE. Proper maintenance of books and records is essential, as the FTA may review underlying ledgers, documentation and supporting schedules during a tax audit.
4. Corporate Tax Return filing and payment of Corporate Tax
Every Taxable Person must file a corporate tax return for each Tax Period. The return must be submitted within nine months from the end of the financial year.
For example:
- Financial year ending 31 December 2024 → return due 30 September 2025
- Financial year ending 30 June 2025 → return due 31 March 2026
The return is filed electronically through the EmaraTax platform. Unlike VAT, there are no quarterly or monthly corporate tax returns. The payment of corporate tax (if due) must also be made within the same nine-month deadline.
5. Transfer Pricing Documentation
The UAE Corporate Tax Law adopts internationally aligned transfer pricing rules, requiring businesses to apply the arm’s length principle to all transactions with related parties and connected persons. In addition, several formal documentation obligations apply.
Related Party and Connected Person Disclosure Form
A disclosure form must be submitted together with the annual corporate tax return. This form lists all transactions and arrangements with related parties and connected persons during the year, and provides high-level information about their nature and value.
Master File and Local File
Businesses must also prepare and maintain detailed transfer pricing documentation, including:
- A Master File describing the multinational group and its global activities, and
- A Local File providing detailed analysis of the UAE entity’s controlled transactions.
These documents follow OECD standards and must be prepared if the business meets thresholds set by the Minister of Finance. They must be provided to the FTA upon request, and failure to maintain them may lead to penalties and Transfer Pricing adjustments.
6. Staying compliant in the UAE's new tax environment
The UAE tax system has transitioned rapidly from a no-corporate-tax environment to a fully developed compliance framework. Even businesses with modest levels of activity must register, maintain proper accounting records, prepare financial statements, and file an annual tax return. Transfer pricing documentation, in particular, is an area where many businesses underestimate their obligations.
Middle East Advisory Group
assists clients with corporate tax registration, preparation of standalone and audited financial statements, annual return filing, and transfer pricing documentation. We also advise on group structuring and tax governance to ensure that businesses remain compliant while optimising their tax position.
If you need support with UAE corporate tax compliance or would like a tailored compliance roadmap, our team is ready to assist.