UAE corporate tax guide: how the regime works in practice

The law splits taxpayers into resident and non-resident persons. A company incorporated in any emirate or free zone is resident. A natural person becomes a taxable person only when they run a business or business activity in the UAE, and the FTA says that applies once turnover from that activity passes AED 1 million in a calendar year. Salary, personal investment income and real estate investment income held privately do not count towards that figure.

Some bodies are exempt persons under Article 4 of the law, including government entities, government controlled entities, qualifying public benefit entities, qualifying investment funds and certain pension funds. Exemption is not automatic in every case, and the FTA may still ask an exempt person to register and file a declaration.

Cabinet Decision No. 116 of 2022 sets the 0% band at the first AED 375,000 of taxable income. Article 3 of the law then charges 9% on taxable income above that amount. A trading company in Sharjah with taxable income of AED 900,000 therefore pays 9% of AED 525,000, which is AED 47,250.

Taxable income is not invented from scratch. Article 20 starts from the accounting income shown in standalone financial statements and then applies the adjustments the law lists: exempt income removed, non-deductible costs added back, interest capped, losses relieved.

Once registered, the yearly rhythm is predictable:

• Keep books and supporting records for at least seven years after the tax period (Article 56).
• Close the year, produce financial statements and, if required, get them audited.
• Compute taxable income and decide on elections such as small business relief.
• File the return and pay within nine months of the end of the tax period (Articles 48 and 53).
• Answer any FTA queries using the same records.

The HelloBooks AI agent records bills, reconciles uploaded bank statements and keeps every journal tagged by account, so the profit figure that feeds the computation already reflects your real transactions. Ask it "what was our accounting profit for 2025 and which expenses look non-deductible?" and it drafts the numbers with the supporting entries listed. Your accountant or tax agent reviews the computation and files it on EmaraTax; the AI never submits anything to the FTA itself.

If your firm wants a chart of accounts mapped to corporate tax adjustments, or approval rules before a figure is treated as final, book a call at /book-a-demo or email hello@hellobooks.ai to request that customisation.