VAT on Commercial Property in the UAE: Everything Investors Need to Know
21/07/2025
YOUNG AND RIGHT ACCOUNTING & TAX CONSULTANCY
YOUNG AND RIGHT From corporate tax registration to audits and bookkeeping, Young & Right offers personalized solutions that keep your business compliant and stress-free. Let’s take the complexity off your plate—starting with a free consultation.
Book Your Free Consultation
The United Arab Emirates (UAE) has long been recognized for its business-friendly environment, but the introduction of the corporate tax signals a new chapter in the country’s fiscal framework. With a vision to create a more transparent and globally competitive economy, the UAE corporate tax regime now mandates businesses to adhere to the new tax regulations. This shift is pivotal for businesses operating in Dubai, whether you're a startup based in a free zone or a multinational corporation with operations on the mainland.
Understanding corporate tax registration in Dubai has become a critical compliance requirement, and businesses must navigate the process carefully. From direct taxes levied on taxable income to meeting specific thresholds for qualifying free zone persons, this transition requires in-depth knowledge of the procedures and regulations at play. The Federal Tax Authority (FTA) is the governing body responsible for overseeing tax registrations and filings, ensuring all businesses comply with the newly established law.
For taxable income, companies must accurately calculate their profits and understand the relevant exemptions and incentives based on their operational structure. Qualifying free zone persons, for example, may still benefit from preferential tax rates, provided they meet the stipulated criteria. Meanwhile, businesses with consolidated global revenues surpassing certain thresholds are required to align their tax filings with federal guidelines to ensure compliance and avoid penalties.
Corporate tax is a direct tax levied on the net income or profit of companies and other business entities. Unlike indirect taxes, such as VAT, which are passed on to consumers, corporate tax is directly borne by the business itself.
In the past, the UAE was widely regarded as a tax-free haven for businesses. However, to align with global tax standards, increase fiscal transparency, and diversify its revenue sources, the UAE introduced corporate tax under Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses. This groundbreaking legislation signifies the UAE's commitment to meeting international standards like the OECD’s Base Erosion and Profit Shifting (BEPS) framework.
The introduction of UAE corporate tax marks a pivotal shift, bringing the country in line with global tax norms and ensuring that it continues to attract international investment. It applies to all taxable persons operating within the UAE, which includes both mainland companies and certain free zone entities. Notably, businesses must adhere to specific free zone regulations to benefit from potential tax exemptions or lower rates.
Under the new tax regime, companies are required to obtain a corporate tax registration number and submit periodic filings for the relevant tax period, which is typically annual. These filings are crucial for assessing the company’s income tax obligations and ensuring compliance with applicable regulations.
Corporate tax registration in Dubai applies to a broad spectrum of entities:
All juridical persons incorporated in the UAE and carrying out business activities in Dubai must register and file annually.
Must register regardless of whether they qualify for the 0% preferential rate.
Subject to tax if they earn income from UAE sources.
If annual net profit exceeds AED 375,000, registration is mandatory.
The corporate tax in UAE covers all economic activity conducted within Dubai unless explicitly exempt under the law.
The UAE Ministry of Finance and the Federal Tax Authority (FTA) have issued timelines based on license issuance dates. Businesses must adhere to the registration deadlines to avoid non-compliance penalties.
→ For businesses licensed before March 2024: Registration is required by a deadline based on the month of license issuance.
→ For newly licensed businesses (post-March 2024): Registration must be completed within 3 months of obtaining the license.
Missing your deadline can attract administrative penalties, ranging from AED 10,000 and beyond, depending on the nature of non-compliance.
Here’s a breakdown of the steps to successfully complete your tax registration in Dubai:
The FTA’s digital platform, EmaraTax, is the official channel for corporate tax registration. Businesses must create an account and submit the required documentation, including:
→ Trade license
→ Memorandum of Association
→ Emirates ID and passport copies of owners/shareholders
→ Financial statements
Identify whether your entity is a juridical or natural person and determine your residence status. This classification impacts how tax obligations are calculated.
Certain businesses may qualify for full or partial exemptions. Free zone entities should assess whether they meet the conditions for qualifying income to retain the 0% rate.
Maintain clear and accurate financial statements as per IFRS (International Financial Reporting Standards). These will form the basis for determining taxable income.
Once all documentation is prepared and reviewed, submit the application via EmaraTax. The FTA will issue a Tax Registration Number (TRN) upon successful review.
Accurate and timely corporate tax registration is vital for businesses operating in Dubai and the wider UAE. Mistakes in tax classification, late submissions, or incomplete documentation can have serious consequences that affect your business’s financial stability and long-term growth. Here are some key risks businesses face if corporate tax registration is not handled with precision:
Incorrect filings, missed deadlines, or failure to register for corporate tax can result in hefty financial penalties. The UAE tax authorities, particularly the Federal Tax Authority (FTA), impose fines for late filing, underreporting income, or failure to submit necessary documents, which can significantly disrupt your operations.
Many free zone companies benefit from tax exemptions, including the 0% tax rate on qualifying income. However, misreporting or incorrect tax classifications could jeopardize these incentives. Incorrect disclosures of business profits, such as failing to declare qualifying income, may lead to the withdrawal of these valuable benefits.
Inaccurate tax filings increase the likelihood of an audit by the FTA. These audits are detailed and time-consuming processes that can result in additional scrutiny of your business’s financial records. This increases your exposure to potential penalties and tax reassessments.
Businesses must ensure they are accurately classified as taxable persons. Incorrect classification or failing to report taxable income correctly may lead to disputes with tax authorities, requiring you to pay tax at the standard rate when you may have been eligible for tax exemptions or benefits.
Many businesses, including qualifying investment funds, may be exempt from corporate tax under certain conditions. However, misreporting these exemptions could result in substantial tax liabilities. Understanding the scope of these exemptions and properly applying the qualifying criteria for free zones and special tax provisions is essential to ensure your business isn’t unfairly taxed.
Businesses must review and correct any inaccuracies in tax returns from previous periods. Failure to address past mistakes can trigger audits and result in retroactive penalties and fines for previous years.
As the UAE’s tax landscape continues to evolve, corporate tax compliance in Dubai has become more intricate than ever. Businesses are no longer just filing taxes—they must navigate complex regulations to stay compliant with the ever-changing framework. Here's how expert corporate tax services can support businesses in meeting these challenges:
Tax experts analyze your business structure, whether it’s a foreign entity or a controlled UAE subsidiary, and recommend strategies that align with both the UAE corporate tax regime and international best practices. This includes advising on specific tax decrees that impact your business, such as capital gains earned or UAE-sourced income.
From EmaraTax registration to timely filing, professionals ensure that your company meets all documentation requirements. They manage the entire filing process, including the declaration of business profits tax, financial years, and corporate income tax, ensuring that your tax submissions are accurate and compliant with federal corporate tax regulations.
For businesses engaged in inter-company transactions or international trade, it’s crucial to maintain robust transfer pricing documentation. Experts help develop and implement arm’s length pricing strategies, ensuring that your inter-company pricing is aligned with market conditions, thus preventing any potential tax exposure.
Free Zone businesses must meet strict substance requirements to maintain qualifying income and retain the 0% tax rate. Corporate tax specialists offer tailored advice to help Free Zone companies comply with these requirements and manage non-qualifying income, avoiding issues with the UAE corporate tax law and maximizing the benefits of small business relief where applicable.
Proactive tax planning is essential to reduce taxable exposure while staying fully compliant with UAE tax laws. Tax experts assist in tax optimization, leveraging the available reliefs such as small business relief and managing tax losses effectively. They also help companies navigate the complexities of mainland legislation and its impact on foreign entities and other juridical persons.
The UAE's corporate tax framework is undergoing significant transformations. Understanding how these changes affect businesses is crucial for ensuring compliance and maximizing tax efficiency in the years to come.
A minimum effective tax rate is now in place for resident juridical persons and resident persons conducting business in the UAE. Companies must adjust to this new tax structure, especially when it comes to capital gains and other income. This tax rate ensures fairness and aligns with global standards while maintaining the UAE’s attractiveness for investment.
The introduction of transfer pricing rules is another key development. These rules apply to resident juridical persons, non-resident juridical persons, and certain exempt persons involved in intercompany transactions. Businesses will need to align their transactions with international standards to avoid penalties and ensure compliance with corporate tax purposes.
Businesses operating in applicable free zone regulations should review their tax status carefully. While some zones may offer exemptions for certain exempt persons, businesses must assess whether these exemptions still apply under the new corporate tax regime. Companies must remain informed of changes that may impact their tax obligations.
Foreign banks and non-resident juridical persons must comply with the new corporate tax rules, especially concerning income derived from the UAE. This includes taxes on capital gains and other sources of revenue generated locally. The move ensures a level playing field across all types of businesses in the region.
Organizations that fall under the social security fund or public benefit entities categories may face new compliance requirements. While these entities typically enjoy exemptions, the UAE government is refining the criteria to align with global best practices.
With the new tax regime, businesses will need to prepare for changes to their tax period ends and filing deadlines. Companies must ensure that their filings meet the new requirements, especially for those with a revenue exceeding AED 375,000.
In summary, as the UAE's corporate tax framework evolves, businesses must stay ahead by understanding the minimum effective tax rate, transfer pricing rules, and other related regulations. This proactive approach will help businesses remain compliant while optimizing their tax positions.
Registering for corporate tax is only the first step. After registration, businesses in Dubai must ensure proper filing of corporate tax returns under the UAE corporate tax law. Here’s a quick guide to what comes next:
Finalize and audit your financial books, ensuring they align with UAE standards. Accurate records are essential for compliance and avoiding penalties.
Adjust accounting income to determine your taxable base. This includes applying deductions, exempt income, and adjustments for related party transactions, considering your business’s applicable corporate tax rate and sector-specific exemptions.
Submit your corporate tax return via the FTA’s EmaraTax portal within 9 months of your financial year-end. Ensure timely submission to avoid fines or penalties.
If your business exceeds revenue thresholds or has cross-border transactions, submit transfer pricing documentation. This includes a disclosure form and Master/Local files, especially if you deal in sectors like natural resources or qualify for special exemptions.
Certain businesses, such as those in private pensions or operating within free zones, may benefit from tax exemptions or reduced rates. Make sure to include these considerations in your filings.
At Young & Right Accounting and Tax Consultancy, we provide comprehensive, end-to-end support for businesses looking to navigate corporate tax registration in Dubai. Our tailored approach ensures that your business not only complies with all Federal Tax Authority (FTA) requirements but also transforms the registration process into a long-term strategic advantage.
From understanding the required documentation to managing your EmaraTax setup and seamlessly integrating it with your systems, we ensure that your business remains fully compliant—without stress, delays, or costly penalties.
We start by conducting a thorough analysis of your business to determine your eligibility for corporate tax registration. This step ensures that your company meets the necessary criteria under UAE corporate tax law, whether you're a Free Zone entity, a mainland business, or part of a Tax Group.
→ Assess UAE tax residency status and determine if your company is a taxable person
→ Verify financial thresholds and applicable exemptions
→ Confirm your operational setup and head office location to determine tax liability
Our team manages your entire corporate tax registration process, preparing and submitting all necessary documentation to ensure accuracy and full compliance with FTA requirements.
→ Compile and submit key documents such as your trade license, MOA, financial statements, and related-party information
→ Select the relevant tax period based on your fiscal year
→ Provide a clear, step-by-step guide to track progress and resolve any queries from the FTA
Corporate tax registration is just the beginning. We help position your business for maximum tax efficiency under the UAE corporate tax regime, ensuring long-term strategic advantage.
→ Evaluate eligibility for Free Zone incentives and ensure you're classified as a Qualifying Free Zone Person where applicable
→ Facilitate Tax Group formations for businesses that wish to consolidate their filings
→ Align your tax position with your long-term business objectives to optimize financial outcomes
We integrate your corporate tax processes into your existing ERP or cloud accounting platforms, ensuring continuous, automated compliance with real-time tracking of your tax obligations.
→ Set up dashboard alerts for upcoming filing deadlines
→ Centralize all documentation for easy access during audits
→ Automate workflows to ensure you never miss key tax deadlines
Our commitment doesn’t end with registration. We offer continuous support to ensure your business remains compliant, proactive, and prepared for audits.
→ File annual corporate tax returns on your behalf to ensure timely and accurate submissions
→ Provide transfer pricing documentation for inter-company transactions or cross-border dealings
→ Track communications with the FTA through MIS-powered systems to ensure transparency and responsiveness
→ Offer training and provide user-friendly resources to keep your team updated on tax regulations
Corporate tax registration in Dubai is more than a legal formality—it's a strategic pivot that shapes your financial, operational, and regulatory future. As Dubai strengthens its global competitiveness, businesses must meet the moment by aligning with the country's new tax regime.
Understanding what is corporate tax, the intricacies of corporate tax in UAE, and the evolving UAE corporate tax law is no longer a back-office concern. It's a boardroom priority.
Don’t let complexity or uncertainty delay your compliance. With the right guidance and professional support, your business can not only meet the legal requirements—but thrive within them.
Let Young & Right handle your corporate tax registration in Dubai with accuracy, speed, and full FTA compliance—so you can focus on growing your business.
Get Expert Tax Support
