Taxes — VAT, Corporate Tax, deadlines

Good news first

UAE taxes are low and simple compared to most countries. But the deadlines are STRICT, and fines for missing them are real. Our accounting division (Division 4) lives on this.

VAT — value added tax, 5%

• What it is: a 5% tax added to the price of most goods and services.
• Who must register: a business whose taxable turnover (sales) is above AED 375,000 per year — registration is mandatory. Voluntary registration is possible from AED 187,500.
• What a registered business does: adds 5% to invoices, files a VAT return (usually every quarter), pays the difference between VAT collected and VAT paid.

Corporate Tax (CT) — 9%

• What it is: a tax on company PROFIT (not turnover). The rate is 9%, and the first AED 375,000 of profit is taxed at 0%.
• Everyone registers. Even small companies and even free zone companies must REGISTER for Corporate Tax. Registration is separate from paying.
• Small Business Relief: small businesses with revenue up to AED 3 million can apply relief (0 tax) — this program currently runs for periods until 31.12.2026.
• Free zone note: a «qualifying» free zone company can get 0% on qualifying income — but the rules are strict (substance, types of income). This is expert territory: flag it to the senior team, do not promise 0% yourself.

Other things to know

• TRC (Tax Residency Certificate) — a certificate from FTA that a person or company is a UAE tax resident. Clients need it for double-tax treaties with home countries. Issued for one year — a classic renewable service.
• E-invoicing is coming: the UAE is switching businesses to electronic invoicing (rollout starting from July 2027). Remember it exists; details in Division 4 training.
• Deadlines matter more than rates. Missing a registration or a filing = automatic fines (for example, late Corporate Tax registration has a fixed fine of AED 10,000). Our calendar of client deadlines is a money-saving machine.

What you must remember

• VAT 5%; mandatory registration above AED 375,000 turnover.
• CT 9% on profit above AED 375,000; 0% below; EVERYONE registers.
• Small Business Relief ≤ AED 3M revenue (until end of 2026).
• TRC = yearly certificate for tax treaties.
• Deadlines are sacred; fines are real.