Corporate Tax in the UAE: Key Aspects and Support by Flexzo Technology FZE

Corporate Tax Services by Flexzo Technology FZE

The UAE’s corporate tax framework has evolved substantially to align with global standards and reinforce the nation’s status as a transparent, business-friendly hub.

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Key Features of Corporate Tax in the UAE

Outlined below is a summary of the main corporate-tax provisions and the way Flexzo Technology FZE keeps companies fully compliant—particularly when securing Qualifying Free Zone Person (QFZP) status.

The Corporate Tax Law introduces several headline rules:

Standard Rate — A 9 % levy applies to taxable profits above AED 375,000, while earnings below that threshold remain exempt as an SME-support measure.
Qualifying Free Zone Person (QFZP) — Free-zone entities that meet the statutory criteria—such as maintaining audited financials and demonstrating adequate economic substance within the zone—may apply a 0 % rate to qualifying income.
Exemptions — Specific relief is available for extractive industries, registered charities, and certain categories of passive income (e.g., dividends).

Long regarded as a low-tax jurisdiction, the UAE enacted a federal corporate income tax in June 2023 through Federal Decree–Law No. 47 of 2022. As part of a broader reform aligning the country with global standards, taxable profits exceeding AED 375,000 are now subject to a 9 % rate.

Corporate Tax Roll-out at a Glance

Key Provisions of the UAE Corporate-Tax Regime

Compliance Obligations

To remain fully compliant, companies must:

Maintain accurate bookkeeping and produce timely financial statements.
File their corporate-tax return with the Federal Tax Authority (FTA) within the statutory deadline.
Meet any additional criteria required to obtain—or preserve—Qualifying Free Zone Person (QFZP) status.

Failure to meet corporate-tax obligations can result in:

Late-filing penalties — charged when returns are submitted after the statutory deadline.
Inaccuracy penalties — imposed for providing false or misleading information in tax filings.

Penalties for Non-Compliance

How Flexzo Technology FZE Supports QFZP Compliance?

For companies aiming to achieve or maintain QFZP status, Flexzo Technology FZE offers comprehensive support in meeting UAE corporate tax requirements:

3. Tax Reporting and Submission

Prepare and submit corporate tax returns with accuracy.
Ensure all deadlines and reporting obligations are met, reducing penalty risks.

2. Income Classification and Tracking

Classify and track qualifying versus non-qualifying income.
Monitor interactions with Free Zone and non-Free Zone entities.
Document income from intellectual property and other eligible sources.

1. Economic Substance Compliance

Review business operations to ensure necessary asset and expense levels.
Assist with workforce planning and expense management within the Free Zone.
Advise on minimum operational requirements to meet economic substance standards.

6. De Minimis Rule Compliance

Track non-qualifying income to ensure it remains within allowed limits.
Provide ongoing monitoring of revenue and expenses to retain QFZP status.

5. Financial Statement Preparation and Auditing

Conduct internal audits and prepare compliant financial statements.
Assist with external audits required to secure QFZP benefits.

4. Transfer Pricing Compliance

Ensure transactions with related entities comply with the arm’s length principle.
Maintain proper transfer pricing documentation to minimize audit risks.

Conclusion

The introduction of corporate tax in the UAE brings new regulatory requirements that businesses must navigate carefully. Partnering with Flexzo Technology FZE simplifies compliance, especially for companies aiming to maintain QFZP benefits in Free Zones.

For more detailed information on UAE corporate tax, please refer to Federal Decree-Law No. 47 of 2022 and resources available on the UAE Ministry of Finance website.

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