How UAE’s Corporate Tax Is Changing the Way Businesses Plan Their Finances

Expanding or Already Operating in the UAE? Corporate Tax Changes Are Here.

The UAE was long known for its business-friendly, zero-tax environment. You can read the official announcement here to understand the UAE’s objectives for introducing corporate tax. But with the implementation of 9% corporate tax on business profits from June 2023, the financial landscape has evolved.

Whether you’re running a mainland LLC or a Free Zone company, these changes affect how you plan expenses, structure your entity, and handle reporting.

At INDGenius Accounting, we’ve been helping businesses prepare for the shift—through structured tax planning, reliable bookkeeping, and timely filings. Here's what every business owner must understand now that corporate tax is live in the UAE.

1. Why UAE Introduced Corporate Tax

The government introduced corporate tax to:

• Diversify revenue beyond oil
• Align with international tax standards (BEPS & OECD Pillar Two)
• Improve transparency and attract long-term foreign investment

This move impacts all UAE businesses generating taxable income above AED 375,000.

2. Key Corporate Tax Requirements

Here’s what the law requires from businesses:

a. Corporate Tax Rate and Threshold

• 0% on the first AED 375,000 net profit
• 9% on profit exceeding that
• Free Zone businesses may remain at 0% only if they qualify under “Qualifying Free Zone Person” rules

b. Mandatory Registration

• All businesses (even if exempt) must register with the Federal Tax Authority (FTA)
• Failing to register = penalties

c. Financial Statements

• Businesses must maintain auditable financials
• IFRS-based reporting is expected for most entities
• Records must be retained for 7 years

d. Tax Return Filing

• Returns must be filed within 9 months of the end of the relevant tax period
• Payment deadline is the same as the filing date

3. Top Financial Planning Changes Due to Corporate Tax

Businesses now need to re-evaluate every part of their financial strategy. Here’s what’s changing:

a. Expense Categorisation

Businesses must now distinguish between:

• Allowable deductions (rent, salaries, professional fees)
• Non-deductible expenses (fines, personal expenses, etc.)

b. Entity Restructuring

Many are:

• Splitting business units
• Registering holding companies
• Reviewing Free Zone vs. Mainland status

c. Timing of Revenue Recognition

Firms are rethinking how they record income—especially for multi-period contracts and recurring billing.

d. Transfer Pricing

If your business deals with related parties or foreign affiliates, you need:

• Transfer pricing documentation
• Arm’s length pricing analysis

4. Common Mistakes Businesses Must Avoid

• Assuming Free Zone = 0% tax automatically
• Missing the registration or filing deadline
• Not maintaining proper supporting documents for deductions
• Ignoring transfer pricing rules for group transactions
• Using cash-based accounting when accruals are required under IFRS

5. What Are the Penalties for Non-Compliance?

Non-compliance can result in:

• AED 10,000–AED 50,000 in penalties
• Late filing interest and fines
• Audits and tax assessments
• Legal proceedings in extreme cases

Being proactive is not optional—it's essential for financial survival.

6. How INDGenius Accounting Helps You Stay Compliant

We work with UAE businesses to keep their operations compliant and efficient:

Corporate Tax Registration & Assessment

We help you assess your tax exposure and register on time with the FTA.

Ongoing Bookkeeping & Financial Reports

We maintain tax-ready accounts using Xero, Zoho, or QuickBooks, all IFRS-compliant.

VAT + Corporate Tax Filing

We handle both indirect and corporate tax filings—error-free and on time.

Transfer Pricing Support

We prepare your transfer pricing documentation and help with related-party disclosures.

Audit-Ready Reporting

Our accountants ensure clean ledgers and reconciliations to pass any FTA audit.

7. Key Deadlines to Remember

Task	Deadline
Corporate Tax Registration	As per FTA’s schedule
Return Filing	9 months after financial year-end
Tax Payment	Same as return deadline
Financial Statement Maintenance	Ongoing, with 7-year record retention

Missing deadlines leads to penalties, audits, and loss of tax exemptions.

8. Already Working Globally? We Support That Too

We support clients operating across UAE, India, Australia, and Ireland with:

• UAE Corporate Tax & VAT
• India GST & Income Tax
• Ireland CT1, VAT, and CRO
• Australia BAS, Superannuation, and Corporate Tax

We serve as your single accounting partner across borders.

9. Final Tips for Navigating UAE Corporate Tax

• Register early—even if you fall under exemptions
• Maintain accurate and regular records
• Use software that aligns with FTA expectations
• Don’t wait till year-end to start planning
• Work with professionals who understand UAE laws

Ready to Re-Strategise for UAE Corporate Tax?

At INDGenius Accounting, we’re already supporting businesses across Dubai, Abu Dhabi, and Free Zones with tax-compliant bookkeeping, filings, and virtual CFO services.

Whether you're an SME, a growing startup, or a cross-border company, we can help you plan smart and stay compliant—without the overhead.