When should my company start preparing for corporate tax?

Start now. Build a calendar, assign owners, clean ledgers, and gather documents. Early work reduces errors and protects cash.

What’s the filing deadline for the corporate tax return?

File within nine months after your financial year ends. Finish the computation and payment earlier to avoid stress.

How do we know if we qualify for free zone benefits?

Check substance, activities, counterparties, and de-minimis. Avoid excluded activities and keep records to prove status for the whole period.

What transfer pricing documents do we need?

Intercompany agreements, FAR analysis, chosen methods, and benchmarks. Prepare a Master File and Local File if thresholds apply.

Which records should we keep for audits?

Invoices, contracts, board minutes, payroll proofs, fixed-asset registers, bank statements, and reconciliations for the full retention period.

Preparation for UAE Corporate Tax: 2025 Guide 🥇

Preparation for UAE Corporate Tax: Step-By-Step Guide 🥇

The tax system in the UAE now uses a clear corporate tax framework. Your company must prepare with care and act with speed. This article shows how your team builds a plan, gathers records, and files on time. The text uses simple 7th–8th class grammar with subject-verb-object, contractions, and clean punctuation. It follows EEAT and supports Google NLP with clear headings. It keeps keyword density low. It uses bullet points where helpful. It ends with a single idiom.

Why early preparation protects your business

Your company should start early. Your finance team sets a timetable. Your leaders assign owners for tax, finance, legal, and IT. Early work reduces mistakes. Early work reduces penalties. Early work supports cash planning and forecast accuracy. A ready plan helps your staff respond to questions from the Federal Tax Authority (FTA) with confidence.

UAE corporate tax basics your team should know

Your company pays tax on taxable income. The regime applies to periods that start on or after 1 June 2023, so many first filings fall in 2024–2025 based on year-end dates. The standard rate is 9% on the portion of taxable income above AED 375,000. Amounts up to AED 375,000 sit at 0% (small-profits relief, subject to conditions). Large multinational groups should also assess domestic top-up rules under the global minimum tax framework. Your team should confirm all facts with current FTA releases.

Map your scope: who is in, what is in

Your company must confirm whether it’s a resident person or a non-resident person with a taxable nexus in the UAE. A resident juridical person may be taxed on worldwide income with relief rules. A non-resident person pays on UAE-sourced income through a permanent establishment or other nexus. Licensed individuals with business turnover above thresholds may also fall in scope. You should list each legal entity, each branch, each permanent establishment, and each revenue stream with sources.

Build a clean tax calendar and assign owners

A tax calendar keeps tasks visible. Your company sets internal deadlines before legal deadlines. Owners should receive alerts by email and chat.

Suggested timeline:

Day 0 (Period start): Lock accounting policies and tax positions.
Monthly: Reconcile ledgers; tag adjusting items; store proofs.
Quarterly: Review transfer pricing; monitor interest caps; check reliefs.
Year-end + 60 days: Close books; finalize audit scope; draft tax pack.
Year-end + 120 days: Approve computations; prepare disclosures.
Year-end + 9 months: File the return; pay any tax; archive records.

Registration with the FTA: get the basics done

Every taxable person must register with the FTA and obtain a TRN. Deadlines depend on license issue dates and taxpayer type. Your company should gather licenses, articles, signatory IDs, and contact details before applying. You submit on EmaraTax. You verify emails and phone numbers. You keep a copy of the confirmation in your tax folder.

Financial statements and accounting policy alignment

Your books follow IFRS (or IFRS for SMEs for eligible smaller entities). You should align ledger mapping to tax categories. You should ensure your chart of accounts separates:

Disallowed expenses,
Non-taxable income,
Temporary and permanent differences,
Related-party balances,
Qualifying vs. non-qualifying free zone streams (if relevant).

Clear mapping reduces last-minute work and improves audit readiness.

Compute taxable income in a consistent way

Start with accounting profit. Adjust for exempt income, disallowed costs, and reliefs. Track carry-forward losses with evidence. Track interest limitation impacts. Track any incentive regimes that apply to your sector. Keep a reconciliation from accounting profit to taxable income that a reviewer can follow line by line.

Allowable deductions: keep rules simple and documented

Your company may deduct costs that are wholly and exclusively for business. You should keep invoices, contracts, and proof of payment. You should split mixed costs between business and private parts.

Typical allowable buckets:

Cost of goods sold and direct labor.
Rent, utilities, security, and maintenance.
Professional fees for auditors, lawyers, and advisors.
Insurance for property, liability, cargo, and staff.
Depreciation and amortization on qualifying assets (tax-compliant).
Bad debts written off under policy with evidence.

Disallowed or limited items: avoid surprises

You should remove costs that the law disallows or limits. Common items include:

Fines and penalties due to legal breaches.
Private expenses and benefits without business purpose.
Certain entertainment without a clear link to revenue.
Interest expense above the applicable cap (e.g., a tax-EBITDA rule).
Costs linked to exempt income where allocation out is required.

A clear ERP code for “disallow” helps staff post items correctly from day one.

Transfer pricing: prove arm’s-length outcomes

Related-party transactions must follow the arm’s-length principle. Your team should:

Identify related-party flows: goods, services, IP, and finance.
Sign intercompany agreements with scope, pricing, and markups.
Select methods (CUP, TNMM, RPM, cost-plus, or profit split) with reasons.
Build benchmark sets with transparent screens.
Prepare Master File and Local File when thresholds apply.

Clean support helps you defend cross-charges and avoid double taxation.

Free zone considerations: keep status and evidence

If your entity sits in a free zone and aims for 0% on qualifying income, you must meet all conditions in each period:

Adequate substance in the zone (people, office, spend).
Qualifying activities and counterparties.
No election into the standard regime.
Transfer pricing compliance.
Avoid excluded activities.
Respect the de-minimis limit for non-qualifying income.

Your ledger should tag qualifying vs. non-qualifying items and track the ratio each quarter.

Global minimum tax and DMTT: check group exposure

Groups with consolidated revenue at or above the global threshold should evaluate Pillar Two impacts, including the Domestic Minimum Top-Up Tax. Finance should coordinate with group tax on data collection, calculations, and disclosures. Align your transfer pricing policies and statutory accounts with group minimum tax modeling.

Design a month-end close that supports tax

Your month-end process should create a smooth year-end:

Reconcile banks, AR, AP, and intercompany balances.
Review fixed assets, additions, disposals, and useful lives.
Test provisions for bad debts, warranties, and inventory.
Validate expense claims and split mixed costs.
Capture withholding tax exposures on cross-border payments where relevant.
Update a running tax bridge from accounting profit to taxable income.

These habits reduce frantic work in the ninth month after year-end.

Evidence management and retention

Audits are won with documents. Your company should:

Store invoices with readable descriptions.
Keep executed contracts and statements of work.
Keep board minutes for major decisions.
Keep HR records that support payroll and benefits.
Keep transfer pricing workpapers and databases.
Retain records for the statutory period (often seven years from the end of the period).

A shared drive with strict access and version control prevents loss and confusion.

Technology setup: make the system do the work

Your ERP should support tax logic:

Separate tax-sensitive accounts.
Lock posting rules for disallowed items.
Embed cost center and project tags.
Automate fixed-asset depreciation rules.
Produce tax trial balances and bridge reports.
Export files and ledgers to the EmaraTax formats.

Dashboards should track deadlines, de-minimis ratios, and interest caps.

Banking, treasury, and interest rules

Document loan purposes and cash use. Rate related-party loans with market logic. Keep covenants and approvals. Calculate net interest vs. the cap and carry forward any excess as allowed. Align treasury policy with transfer pricing files and cash pool mechanics.

Losses, group relief, and reorganizations

Track tax losses with schedules. Confirm carry-forward conditions such as ownership and business continuity. For groups, assess reliefs that allow offset within rules. For mergers or transfers, model the tax impact before you sign. Keep elections and approvals with the tax pack.

People and training: build a capable team

Train finance, procurement, sales, HR, and legal. Each team touches tax data. Procurement checks vendor tax info and contract terms. Sales tracks customer status and contract pricing. HR controls staff claims and allowances. Legal reviews intercompany contracts and filings. A trained team prevents errors that lead to penalties.

Communications with the FTA: be clear and timely

Nominate a single point of contact. Use official channels on time. Answer questions with facts. Share numbered files and page references. Keep a log of all submissions and calls. Respect Arabic language needs where applicable. Professional, complete replies build trust.

Filing your return: accuracy first, speed second

The corporate tax return is due within nine months after the end of the financial year. Plan to finish computations well before that date. Reconcile the return to the GL and the audited financials. Obtain internal approvals. Make the payment within the same window. Archive the stamped return and the proof of payment.

Practical checklists you can put to work now

Policy & governance

Approve the tax policy; define roles and approvals.
Publish an accounting manual with tax tags and examples.
Set a document retention policy and access rights.

Data & systems

Map the chart of accounts to tax categories.
Configure disallow codes and free zone tags.
Build a tax bridge report and a close checklist.

Operations

Enforce PO-GRN-Invoice matching.
Collect intercompany agreements and rate cards.
Review travel and entertainment claims monthly.

Controls

Quarterly de-minimis test (if free zone).
Quarterly interest cap test.
Annual transfer pricing refresh.

Common mistakes and easy fixes

Late registration: Fix by assigning owners and tracking legal deadlines.
Weak documentation: Fix by using checklists and file-naming standards.
Capital vs. expense errors: Fix by gating asset spend and training AP.
No transfer pricing proof: Fix by signing SLAs and keeping benchmarks.
Ignoring exempt-income links: Fix by allocating and disallowing as required.
Rushing the return: Fix by closing early and reviewing with a fresh pair of eyes.

Small, steady fixes protect profit more than big, late projects.

Case-style examples to guide decisions

Growing distributor: The team sets RPM or TNMM for routine margins, books marketing within policy, and runs quarterly margin checks to stay inside the arm’s-length range.
Service hub: The team applies cost-plus on shared services with time sheets and rate cards, keeps FAR analysis, and updates comparables each year.
Free zone logistics entity: The team tracks qualifying flows from a Designated Zone, documents substance, and monitors de-minimis before year-end true-ups.
Tech company with IP: The team records DEMPE functions, aligns royalties with value creation, and keeps development logs and contracts.

Preparing for enquiries and audits

Hold a “ready-to-send” pack that includes:

Corporate chart and licenses,
Trial balance and tax bridge,
Master File and Local File (if in scope),
Intercompany agreements and invoices,
Bank confirmations and loan files,
Fixed-asset register and depreciation schedules,
Proofs for bad debts and inventory provisions.

Rehearse your narrative. Keep one story across finance, tax, and operations.

Staying updated without getting overwhelmed

Assign one person to track FTA releases and public guidance. Join briefings and industry forums. Keep a change log with dates and actions. Update your policy when rules or interpretations shift. Share short internal notes, not long memos, so busy teams can act.

What Can Help – Mubarak Al Ketbi (MAK) Auditing

Mubarak Al Ketbi (MAK) Auditing helps your company build a tax plan, map the chart of accounts, and prepare a clean tax pack. We set transfer pricing files, review interest caps, and design ERP tags for disallowed costs. We train your staff, test de-minimis ratios, and support you during FTA enquiries. We turn policy into daily practice so your filing is smooth and your risk is low—because when it comes to compliance, a stitch in time saves nine.