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A VAT audit is an official review of your company’s VAT returns and related financial records, conducted by or in accordance with the Federal Tax Authority (FTA) in the UAE. The goal is to verify whether your business is complying with UAE VAT laws and whether tax has been calculated, reported, and paid accurately.
Taxable Profit up to AED 375,000 (per tax year)
Taxable Profit up to AED 375,000 (per tax year)
0%
9% applicable on the excess profit of AED 375,000/-
Qualifying Income
Non-Qualifying Income
0%
9%
Corporate Tax in the UAE applies depending on the company’s financial year. See below for examples:
Government-controlled bodies
Government-controlled bodies
Businesses involved in natural resource (extractive/non-extractive) operations
Private pension or social security funds
Qualifying investment funds
Public pension or social security funds
Mandatory if:
All Corporate Tax returns must be submitted in AED (UAE Dirham).
Convert foreign transactions using UAE Central Bank exchange rates.
The UAE does not impose withholding tax — rate is zero.
Transfer pricing documentation is mandatory if:
Arm’s Length Principle must be applied in related-party transactions.
Yes. Regardless of whether the company is making a profit or incurring a loss, all UAE-registered businesses are required to comply with UAE Corporate Tax Law.
Yes. A company can apply to the Federal Tax Authority (FTA) to change its Corporate Tax period. However, the change must be backed by valid commercial reasons, and it cannot be made arbitrarily
The Federal Tax Authority (FTA) is the official government body responsible for regulating, managing, and facilitating VAT audits and overall tax compliance in the UAE.
Yes. A UAE company is treated as a UAE tax resident, and therefore its worldwide income is subject to UAE Corporate Tax.
No. According to Article 50 of the UAE Corporate Tax Law, companies are prohibited from restructuring their business solely to evade taxes under the General Anti-Avoidance Rule (GAAR).
A penalty of AED 1,000 applies for late submission, which increases by AED 1,000 monthly, up to a maximum of AED 10,000.
Corporate Tax returns and payments must be completed electronically through the Federal Tax Authority (FTA) portal.
Yes. Corporate Tax registration is mandatory, even if a company qualifies for Small Business Relief. The relief can only be claimed when filing the Corporate Tax return.
Every business operating in the UAE—from free zone companies to mainland entities—must be registered under the Corporate Tax regime if its financial year starts on or after 1 June 2023. This registration ensures you’re recognized as a taxable person by the Federal Tax Authority (FTA)
With the introduction of UAE Corporate Tax, businesses must embrace new compliance standards. Staying ahead means a smoother transition and less risk of penalties.
The UAE implemented Corporate Tax to diversify revenue, align with global tax standards (OECD BEPS), and reinforce credibility as a business hub
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