With the introduction of the UAE's Corporate Tax (CT) regime, new businesses must understand their obligations to ensure compliance from the outset. The tax applies to the profits of companies and is levied at a standard statutory rate of 9% on taxable income exceeding AED 375,000, with a 0% rate applying to profits below this threshold. This system is designed to align the UAE with global standards of tax transparency while maintaining a competitive business environment. The scope of the tax covers most businesses, including those in Free Zones, unless they meet specific conditions to be a 'Qualifying Free Zone Person'.
Core obligations for businesses include mandatory registration with the Federal Tax Authority (FTA) to obtain a Tax Registration Number, maintaining accurate accounting records and audited financial statements, and filing an annual CT return. The tax return must be filed within nine months of the end of the company's financial period. Non-compliance with these regulations can lead to significant financial penalties. It is critical for new businesses to understand these accounting and legal requirements and integrate them into their financial operations from day one to ensure a smooth transition into the new tax landscape.