Dubai Corporate Tax: What Business Owners Need to Know in 2025

Exemptions & Key Reliefs

• Small Business Relief: Businesses whose revenue is ≤ AED 3,000,000 in both current & prior tax periods may elect for relief; treated as having no taxable income for that period. :contentReference[oaicite:2]{index=2}
• Qualifying Free Zone Persons (QFZP): Entities in Free Zones that comply with substance & other rules may enjoy 0% CT on qualifying income. :contentReference[oaicite:3]{index=3}
• Dividends & Capital Gains: From qualifying shareholdings are exempt under certain conditions. :contentReference[oaicite:4]{index=4}
• Extractive Businesses: Subject to Emirate-level tax, exempt from federal CT. :contentReference[oaicite:5]{index=5}

Documentation & Compliance Requirements

To comply with UAE CT laws, business owners should ensure the following:

• Maintain audited financial statements prepared under IFRS standards.
  
  
• Submit annual corporate tax return to the Federal Tax Authority (FTA) within 9 months of end of financial year. :contentReference[oaicite:6]{index=6}
  
  
• Register with FTA as a “taxable person”.
  
  
• Comply with transfer pricing rules and substance requirements (especially for Free Zone persons). :contentReference[oaicite:7]{index=7}
  
  
• Keep detailed records of revenue, expenses, contracts, invoices, related party transactions.
  
  
• Ensure tax‐resident status where needed; residency often determined by where effective management/control is located. :contentReference[oaicite:8]{index=8}
  
  

Steps for Business Owners in 2025

1. Assess your taxable profits
   Calculate revenue minus allowed expenses. Check whether your profit exceeds AED 375,000 threshold.
   
   
2. Determine your status
   Are you a Free Zone person with qualifying income? Or a Mainland entity? This determines whether you get 0% rate on qualifying income or standard rate.
   
   
3. Register with Federal Tax Authority (FTA)
   Every taxable entity must register for CT via FTA portal.
   
   
4. Keep accurate accounting and documentation
   Track expenses, maintain books, get audits done, and ensure transfer pricing compliance for relevant entities.
   
   
5. File your return & pay tax
   Once financial year ends, submit your CT return within 9 months and pay tax due if profits exceed threshold.
   
   
6. Stay updated with law changes
   Monitor new guidance, ministerial decisions, or Cabinet Decisions, especially regarding Free Zone rules and top-up taxes for multinationals.
   
   

Why Najoom Corporate Services for Your Tax Compliance

• We provide expert guidance on whether your business qualifies for 0% CT in Free Zones or not.
• Document preparation support – audits, invoices, contracts, and bookkeeping templates that meet FTA standards.
• Assistance with registration, submitting returns, and liaising with authorities.
• Advisory on tax optimization: deductions, loss carry-forward, handling related party transactions.
• Monitoring law updates so your business stays compliant and avoids penalties.

Key Reminders & Penalties to Avoid

• Late registration or failure to register can incur penalties.
• Incorrect or missing documentation may cause audits or fines.
• Failure to comply with substance or transfer pricing rules for Free Zone persons may result in losing 0% rate benefit.
• Mixing non-qualifying income with qualifying income without proper separation may lead to exposure to 9% rate on more income. :contentReference[oaicite:9]{index=9}