UAE Taxes & Compliance: what founders actually need to know

The UAE's tax landscape has changed significantly. VAT since 2018, Corporate Tax since 2023. Understanding your obligations — and planning for them from the start — prevents costly mistakes and surprises.

Taxes & compliance at a glance

UAE businesses face two primary taxes: VAT (5% on most supplies, mandatory registration above AED 375,000) and Corporate Tax (9% on profits above AED 375,000). Free zone businesses may qualify for 0% CT on qualifying income, but this requires genuine substance and compliance. Beyond taxes, annual compliance includes licence renewal, visa management, UBO declarations, and ESR reporting.

Who this is for: Founders setting up or already operating a business in the UAE.

Key caution: Tax rules evolve. This guidance reflects the position as of February 2026. Always verify with the FTA or a qualified tax advisor.

Tax guides

VAT

UAE VAT is charged at 5% on most goods and services. Registration is mandatory once your taxable supplies exceed AED 375,000 in the previous 12 months (or are expected to in the next 30 days). Voluntary registration is available from AED 187,500. Free zone businesses may qualify for a 0% rate on certain supplies, but only if they meet specific 'Designated Zone' conditions — this is not automatic and must be verified. [R1][R2]

Standard rate: 5%Mandatory registration: AED 375,000Voluntary registration: AED 187,500

Read guide

Corporate Tax

UAE Corporate Tax (CT) applies at 9% on taxable income exceeding AED 375,000. Free zone entities can qualify for a 0% rate on 'Qualifying Income' — but only if they meet substance requirements, maintain adequate records, and their income qualifies under the rules. This is not automatic and requires careful structuring. The first tax period for most businesses started on or after 1 June 2023. [R1][R2]

Standard rate: 9%Small business relief: AED 375,000Qualifying Free Zone rate: 0%

Read guide

Compliance checklists

Annual compliance essentials

Renew your trade licence before expiry

⏱ Before licence expiry date⚠ Late fees + potential licence suspension

Renew employee visas and Emirates IDs

⏱ Before expiry date⚠ Fines per day for overstay

File Corporate Tax return

⏱ Within 9 months of financial year end⚠ AED 500/month late filing

File VAT returns (if registered)

⏱ By 28th of month following tax period⚠ AED 1,000 first offence; AED 2,000 repeat

Submit UBO declaration (if applicable)

⏱ Annually or upon change⚠ Varies by authority

Maintain Economic Substance reporting (if applicable)

⏱ Within 12 months of financial year end⚠ AED 20,000 first offence

Prepare and file audited financials (if QFZP)

⏱ As part of CT filing⚠ Loss of QFZP status

Maintain AML/CFT compliance records

⏱ Ongoing⚠ Significant fines and potential licence revocation

Post-setup compliance (first 90 days)

⏱ Within 3 months of incorporation

⏱ Within 30 days of exceeding threshold⚠ AED 10,000 late registration

Open corporate bank account

⏱ As soon as licence is issued

Set up accounting system and chart of accounts

⏱ Immediately after setup

Appoint a compliance officer or advisor

⏱ Within first month

⏱ Upon licence issuance

Submit initial UBO declaration

⏱ Upon incorporation

Key numbers at a glance

VAT rate

CT rate

AED 375K

VAT threshold

AED 375K

CT threshold

0% QFZP

Free zone CT

9 months

CT filing

Need help with UAE tax planning?

Get a Setup Snapshot that includes tax structure recommendations tailored to your business model, zone choice, and growth plans.

How this section works

Tax and compliance guides are compiled from official FTA and Ministry of Finance sources. Tax rules change — always verify current requirements with the FTA or a qualified tax advisor.

This content is educational and not tax, legal, or financial advice. Always get qualified professional advice for your specific situation.

Last reviewed: February 2026