Understand key deadlines, compliance requirements, and penalties for corporate tax registration and filing in UAE Free Zones. Partner with YUGA Accounting for expert guidance and ensure seamless compliance.

UAE Free Zones & Corporate Tax Overview

UAE Free Zones offer attractive benefits, including 100% foreign ownership, duty-free advantages, and various tax incentives. With the introduction of Federal Decree Law No. 47 of 2022 on Corporate Tax, which took effect on June 1, 2023, businesses in both the mainland and free zones must comply with the new tax regulations.

To avoid penalties, it is crucial to understand tax obligations, comply with deadlines, and ensure proper filings. Delays or non-compliance can result in hefty fines and business disruptions.

This guide will help you navigate corporate tax registration deadlines, compliance rules, penalties, and how to adopt a tax strategy aligned with UAE regulations.

Corporate Tax in UAE Free Zones

Businesses operating in UAE Free Zones fall under the corporate tax framework:

• 0% tax rate for Qualifying Free Zone Persons (QFZP) on qualifying income.
• 9% corporate tax on non-qualifying income.

All businesses, unless explicitly exempt, must register for corporate tax and file returns within the stipulated deadlines.

Corporate Tax Registration Deadlines in UAE

In June 2024, the Federal Tax Authority (FTA) outlined corporate tax registration deadlines based on business license issuance dates. Unlike VAT, registration is linked to the incorporation date rather than the financial year.

For example, if a company was licensed in March 2024, it must complete corporate tax registration by March 31, 2025. Missing the deadline will result in a penalty of AED 10,000.

Registration Deadlines Based on Business Type

• Businesses incorporated after March 1, 2025: Must register within 90 days of incorporation.
• Natural Persons (Individuals with Business Income): If turnover exceeds AED 1 million annually, registration must be completed by March 31 of the following year.
• Foreign Legal Entities: Must register within three months from the end of their tax period.
• Permanent Establishments: Must complete registration within three months from incorporation.

Corporate Tax Filing Deadlines in UAE

Every UAE-based company must file corporate tax returns for each tax period as per FTA guidelines. Late submissions result in penalties and compliance risks.

Corporate Tax Filing Timelines

Tax payments must be completed within 9 months after the financial year ends, ensuring compliance with FTA regulations.

Key Elements of Corporate Tax Compliance for Free Zone Businesses

To maintain compliance, free zone entities should follow these steps:

• Assess Business Activities: Identify qualifying and non-qualifying income.
• Maintain Accurate Financial Records: Ensure proper accounting to support tax filings.
• Register on FTA’s Portal: Obtain a Tax Registration Number (TRN).
• Timely Tax Return Filing: Submit corporate tax returns within 9 months after the financial year ends.
• Comply with Economic Substance Regulations: Free zone businesses must adhere to economic substance requirements to retain tax incentives.

Penalties for Non-Compliance with Corporate Tax Rules

Failure to comply with UAE corporate tax regulations can lead to financial penalties and business disruptions:

• Late Registration: AED 10,000 fine for missing the corporate tax registration deadline.
• Late Deregistration: AED 1,000 per month, up to a maximum of AED 10,000.
• Delayed Tax Return Filing: Penalties increase based on delay duration and outstanding tax amounts.
• Government Approvals Delayed: Non-compliance can lead to challenges in obtaining government clearances.
• Reputational Damage: Failing to comply with FTA regulations can impact business credibility.

Why Choose YUGA Accounting for Corporate Tax Compliance?

YUGA Accounting is a trusted partner for corporate tax advisory, compliance, and filing services in the UAE. Our experts ensure businesses remain compliant, avoid penalties, and streamline their tax operations.

🔹 Expert tax consultants with deep knowledge of UAE tax laws
🔹 End-to-end corporate tax support, from registration to filing
🔹 Hassle-free compliance management to prevent penalties

Contact us today for a free consultation and ensure your business stays tax-compliant in UAE Free Zones!

FOR MORE INFORMATION, CONTACT US :

Phone : +971 52 1952 532 / +971 4 240 1110

Mail-Id : info@yugaaccounting.com

Website : www.yugaaccounting.com