UAE compliance · Federal Tax Authority
Nought per cent to AED 375,000 and nine above it — the part everyone can recite. Taxable income starts from accounting profit under IFRS and is adjusted from there, which makes the general ledger the working papers for a federal filing. That is the part that changes how a finance system has to be built.
A reference, not a determination. This sets out what the regime requires and what it means inside NetSuite. Whether your entity qualifies as a free zone person, whether a payment is at arm’s length, and what your adjustment schedule contains are judgements on your facts — take them with your tax adviser.
Last reviewed
The rates
The regime applies to financial years beginning on or after 1 June 2023, so a calendar-year business entered it on 1 January 2024 and a June year end entered it on 1 July 2023. Which rate applies is rarely the question; whether the conditions attached to it hold is.
0%
On taxable income up to AED 375,000
Every taxable person
A band, not an exemption — the business still registers and still files.
9%
On taxable income above AED 375,000
The standard rate
Applied to the excess over the threshold, not to the whole of taxable income.
0% / 9%
Qualifying and non-qualifying income
A qualifying free zone person
Conditional on maintaining QFZP status, and lost for the tax period and the four that follow if it fails.
15%
Domestic minimum top-up tax
Multinational groups with consolidated revenue of EUR 750 million or more in at least two of the four preceding financial years
For financial years starting on or after 1 January 2025, where the effective rate in the UAE falls below 15%.
What the regime actually requires
01
The return begins with the accounting net profit in financial statements prepared under IFRS, and applies a schedule of adjustments to it. There is no separate tax ledger to maintain and no reconciliation to a parallel set of books — which means the general ledger has become the working papers for a federal tax filing, and the standard it has to meet went up on the day the regime started.
02
Every taxable person registers, including free zone entities and businesses whose income sits entirely inside the 0% band. Registration is not triggered by owing tax. The timeframes were set by licence issuance month under FTA Decision No. 3 of 2024, and the penalty for missing them is AED 10,000 — payable by businesses that owe no tax at all.
03
There is no national filing date. The return and the payment are both due nine months after the end of the tax period, so a December year end files by 30 September and a June year end by 31 March. A group whose subsidiaries have not been aligned to one financial year has several deadlines rather than one, and each of them is a separate filing.
04
A qualifying free zone person pays 0% on qualifying income and 9% on the rest. Qualifying income is defined by Cabinet Decision No. 100 of 2023, and the de minimis test allows non-qualifying revenue of up to 5% of total revenue or AED 5 million, whichever is lower. Breach it, or fail the substance requirements, and QFZP status goes for that tax period and the four following it. That is a five-year consequence for one year of transactions.
05
The arm’s length principle applies to related parties and connected persons, and it does not stop at the border. Payments to owners and to their other businesses are inside it. Master file and local file documentation is required where the taxable person’s revenue is AED 200 million or more, or where it belongs to a multinational group with consolidated revenue of AED 3.15 billion or more.
06
A resident person with revenue of AED 3 million or less may elect to be treated as having no taxable income. It is claimed in the return rather than granted automatically, it is lost permanently once revenue exceeds the threshold in any period, and it is available only for tax periods ending on or before 31 December 2026. Electing also forfeits carried-forward losses and disallowed interest from that period.
Administrative penalties
Late registration is charged to businesses that owe no tax, which is the one most often discovered after the fact. The FTA has run a waiver initiative cancelling or refunding it where the first return is filed within seven months of the end of the first tax period — check whether it still applies before assuming either way.
Inside NetSuite
None of this is filing software. It is the configuration and the data that decide whether the return can be produced from the system at all, or whether it is rebuilt in a spreadsheet every year by someone reading transaction descriptions.
01
Adjustments are only as good as the accounts they are computed from.
02
Transfer pricing documentation is assembled from the ledger or it is not assembled at all.
03
The de minimis test is a revenue ratio, and a ratio needs a numerator you can produce.
04
A tax group is an election with conditions, not a consequence of ownership.
Cabinet Decision No. 55 of 2023 is cited widely and is repealed. Qualifying income for a free zone person is determined by Cabinet Decision No. 100 of 2023, which is what the free zone material above rests on.
A business that has elected small business relief since 2023 has filed returns with no adjustment schedule behind them. The period after 31 December 2026 is the first that needs one, and the ledger it will be built from is the ledger being posted to now.