The UAE introduced a federal corporate tax regime that changed the way businesses plan and report profit. The headline rate for most businesses is 9 percent. The law also protects small businesses with a nil rate up to a specific threshold and creates special rules for free zone entities. This post explains the new corporate tax rate and what practical steps businesses must take to meet corporate tax compliance. It also explains why SSCOGlobal is positioned to support clients and how to choose among the best accounting firms in Dubai.
What is the new corporate tax rate in the UAE?
The standard corporate tax rate in the UAE is 9 percent on taxable profits above the small business threshold. The law applies to financial years starting on or after 1 June 2023. The government set a zero percent rate for taxable income up to AED 375,000 to protect small businesses. Free zone persons may benefit from a 0 percent rate on qualifying income where conditions are met, while non-qualifying income remains subject to the standard rate. In addition to the 9 percent headline rate, the UAE is applying a 15 percent domestic minimum top-up tax for large multinational enterprises that meet the global revenue threshold, consistent with the OECD Pillar Two framework.
Why this matters for businesses operating in the UAE?
The introduction of a federal corporate tax rate of 9 percent changes capital allocation, pricing, and reported profits. Companies that previously relied on tax neutrality must now confirm taxable income, allowable deductions, and transfer pricing positions. The threshold of AED 375,000 for a 0 percent rate means that small businesses may remain outside tax charges, but they still face reporting and filing obligations that feed into corporate tax compliance. Large multinational enterprises will face additional scrutiny under the domestic minimum top-up tax rules, and those rules will require coordination across jurisdictions. These changes create both compliance obligations and opportunities for clear tax structuring.
The practical impact on accounting and reporting
Financial statements and tax reporting must be in alignment so that tax profit will be calculated properly. Thus, accuracy in accounting, reconciliations, and audit trails is now a vital input for corporate tax compliance. Corporate tax compliance would require the corporation to segregate taxable from non-taxable items, adjust accounting profit to tax income, and record the rationale for such deductions and credits. Free zone entities should confirm qualifying activities and maintain the required substance and documentation to preserve preferential tax treatment. For multinational groups, consolidated reporting and local file preparation for transfer pricing will affect how group accounting teams work. Timely and accurate accounting reduces the risk of assessments and penalties.
How to prepare for corporate tax compliance?
Start with a diagnostic review of the current accounting and tax setup. Identify the tax residency of entities, the nature of revenue streams, and the presence of cross-border transactions. Reconcile accounting profit to taxable profit and map deductions that require support. Put in place systems for record keeping, periodic tax calculations, and secure storage of tax documents. Consider whether your group qualifies for any exemptions or incentives, and document the basis for qualification. Finally, build a calendar for filings and payments and assign responsibility for corporate tax compliance within your finance team.
Common questions businesses ask
Businesses ask whether the 9 percent rate applies to all entities, how the AED 375,000 threshold is measured, and what documentation free zone entities need. The 9 percent rate is the standard rate for taxable profits above the threshold. The AED 375,000 threshold is applied at the taxable person level and is intended to support small enterprises. Free zone persons can achieve zero percent on qualifying income if they meet the conditions set out in the law and follow cabinet decisions. Large multinational enterprises should prepare for the domestic minimum top up tax if their global revenue meets the 750 million euro threshold. Those are the key points that drive corporate tax compliance activity.
Why SS &Co is equipped to support your business?
SS &Co approaches corporate tax work with a single objective: reduce risk and preserve business value. Our team starts with a diagnostic review and then builds a tailored plan for accounting alignment, tax policy documentation, and filings. We focus on practical steps that finance teams can adopt immediately. We also help clients select technology to automate tax calculations, manage documents, and produce reports for audit. For free zone companies, SS &Co assists with the documentation required to support a zero percent rate on qualifying income. For multinational groups, we coordinate with international advisors to ensure the domestic minimum top-up tax is properly modelled and implemented. Our approach to corporate tax compliance is to make the process predictable, repeatable, and auditable.
What to expect from an implementation roadmap?
An implementation roadmap starts with an initial assessment and moves to remediation of accounting differences. Next comes the introduction of tax processes and a filing calendar. The final stage is embedding controls and a continuous improvement cycle. Throughout this process, SS &Co provides training to in-house teams and prepares the first set of filings with the tax authority. The aim is to convert compliance into an operational routine, and to reduce the need for external intervention as the finance team grows more confident. The roadmap also includes periodic reviews to capture legislative changes and find opportunities for incentives that may reduce effective tax. The roadmap helps businesses navigate the new corporate tax rate with minimal disruption.
How SS &Co helps with day-to-day tax governance?
Day-to-day governance requires a small number of reliable processes. These include a tax calendar, a standard tax pack that reconciles accounting and tax profit, and a checklist for documentation needed to support material deductions. SS &Co offers advocacy on these embedded processes with pre-folio review at submission. We also assist with policy documents for transfer pricing and intercompany pricing. These tasks make corporate tax compliance repeatable and auditable. Over time, they reduce the effort required to prepare returns and free finance teams to focus on business priorities.
What businesses should do next?
Begin with a quick diagnostic of your existing tax and accounting setup. Confirm the taxable person structure, review recent accounting close processes, and map key cross-border transactions. Build a short plan to reconcile accounting profit to taxable profit and assemble supporting documentation. Use that information to calculate likely tax exposure for the current year and to design a filing timeline. If your business is in a free zone, confirm qualifying activities and document the basis for any claim to a zero percent rate. If your group meets the threshold for multinational rules, build a model for the domestic minimum top-up tax. All of these steps are central to timely corporate tax compliance.
Conclusion
The UAE’s new corporate tax regime, with a standard rate of 9 percent and protections for small businesses and free zones, requires a practical response from every finance team. A novel atmosphere for tax planning and corporate tax compliance has been set up by the regime. By acting before any lawsuits arise, companies will align their accounting, document their positions, and work with tax processes, all with the aim of minimizing risk and maximizing tax value. SS&Co. Global provides practical implementation, unequivocal deliverables, and valid experience to assist corporations in meeting their obligations. Your comparison of advisors should consider practical execution and examples of successful implementation.
