VAT and Corporate Tax in the UAE
Two separate obligations, two different thresholds, one team that handles both. From registration to filing, we keep your business fully compliant with the Federal Tax Authority.
- Both TaxesCover all
- Free Zone CTAssessed Correctly
- FTA DeadlineNever Missed
- Late FilingsFixable
VAT & Corporate Tax Comparisson
VAT
A 5% consumption tax charged on most goods and services sold in the UAE.
- Rate: 5% on taxable supplies
- Mandatory registration: turnover above AED 375,000 per year
- Filing: quarterly with the Federal Tax Authority
- Applies to: all businesses selling goods or services in the UAE
*Property value: AED 2,000,000 minimum
Corporate Tax
A 9% profit tax introduced in June 2023, applicable to all UAE-registered companies.
- Rate: 9% above profit AED 375,000
- Registration: mandatory for all UAE companies
- Filing: annual return within 9 months of year-end
*Property value: AED 2,000,000 minimum
What We Handle for you
Tax Assessment
We review your revenue, structure, and activities to identify which obligations apply to your situation.
FTA Registration
We prepare and submit your VAT and Corporate Tax registration with the Federal Tax Authority.
Return Preparation
Each quarter or at year-end, we prepare your return based on your data and accounting records.
Filing and Submission
We file directly with the FTA on your behalf and maintain a full record of every submission.
Ongoing Compliance
We track deadlines, monitor regulatory changes, and handle all FTA correspondence on your behalf.
Most Common Mistakes
Not registering on time
Crossing the AED 375,000 VAT threshold without registering triggers an immediate penalty of AED 10,000.
Assuming Free Zone means tax-free
Free zone companies access the 0% Corporate Tax rate only if they earn Qualifying Income under QFZP conditions. Not all revenue qualifies.
Wrong VAT treatment on transactions
Applying the incorrect rate to exempt or zero-rated supplies creates a liability that compounds across every filing period.
Missing Corporate Tax registration
All UAE businesses must register for CT regardless of profit level. Late registration carries a fixed AED 10,000 penalty.
Filing without professional review
Returns with errors or unsupported positions can trigger FTA audits and reassessments that cost significantly more to resolve.
Ignoring Small Business Relief
Businesses with revenue under AED 3 million can elect for relief and pay 0% Corporate Tax through December 2026. Many qualify but never apply.
Tax compliance is not just about filing on time. It is about filing correctly.
What we bring to every client engagement.
We Know the UAE Tax Framework
Our team works exclusively with UAE tax law and FTA regulations. Not just generalist accountants applying foreign frameworks.
We Catch What You Miss
Common filing errors, misapplied VAT rates, and missed reliefs are identified before they become penalties.
We Handle FTA Communication
Any queries, clarification requests, or audit notices from the FTA are managed by us directly.
We Track Every Deadline
No reminders needed from your side. We initiate every filing on schedule and confirm submission to you.
We Know Free Zone Rules
CT exemption eligibility under QFZP rules is complex and often misunderstood. We assess it correctly from the start.
We Fix Past Mistakes Too
If your filings have errors or you have missed registrations, we prepare voluntary disclosures and manage the resolution process.
What UAE Business Owners Need to Know About Tax
VAT and Corporate Tax Are Not the Same Thing
VAT is a transaction-level tax charged on sales and collected from customers. Corporate Tax is a profit-level tax paid by the company on its annual net earnings. A business can be liable for both, either, or neither depending on its revenue and structure. The obligations are administered separately with different registration processes and filing deadlines.
The AED 375,000 Threshold Appears in Both, But Means Different Things
For VAT, AED 375,000 is the mandatory registration threshold based on annual taxable turnover. For Corporate Tax, it is the profit level above which the 9% rate applies. A business can have high turnover that triggers VAT registration while still paying 0% Corporate Tax on modest net profit. The two calculations are entirely independent of each other.
Free Zone Companies and the 0% Corporate Tax Rate
Free zone companies are not automatically exempt from Corporate Tax. To benefit from the 0% rate, a company must qualify as a Qualifying Free Zone Person and earn Qualifying Income — broadly, income from transactions with other free zone persons or from specific approved activities. Income from UAE mainland clients generally does not qualify and is taxed at 9%. This distinction must be assessed carefully for each business.
What Happens If You Have Already Missed a Deadline
Late registration and late filings carry fixed penalties. For both VAT and Corporate Tax, the late registration penalty is AED 10,000. Voluntary disclosure before an FTA audit results in significantly lower costs than waiting to be identified. Acting early is the most practical and least expensive path to resolving an outstanding obligation.
Let’s Discuss Your Case
Share your contact details and we’ll reach out to discuss how we can help
Frequently Asked Questions
Does every UAE company need to register for Corporate Tax?
Yes. All UAE-incorporated companies are required to register for Corporate Tax regardless of profit level or free zone status. The 0% rate on profits below AED 375,000 and the Small Business Relief option do not remove the registration requirement.
Can a free zone company pay 0% Corporate Tax?
Yes, but only under specific conditions. The company must qualify as a Qualifying Free Zone Person and earn Qualifying Income. Income from mainland UAE clients or from non-qualifying activities is taxed at the standard 9% rate.
What triggers mandatory VAT registration?
Mandatory registration applies when taxable turnover in the previous 12 months exceeded AED 375,000 or is expected to exceed that amount in the next 30 days. Voluntary registration is available from AED 187,500.
What are the penalties for late VAT filing?
A late return carries a penalty of AED 1,000 for the first offence, rising to AED 2,000 for subsequent late filings within 24 months. Late payment penalties start at 2% of the unpaid amount immediately and increase over time.
We have not been filing correctly. What should we do?
Voluntary disclosure is available through the FTA for businesses that identify errors in previously filed returns. Acting before an audit begins results in significantly lower penalties. We assess the situation, prepare the disclosure, and manage the process with the FTA on your behalf.
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