Two federal taxes matter for most Dubai companies: corporate tax and VAT. Both involve registration with the UAE Federal Tax Authority, and neither is switched off automatically by holding a Free Zone licence. Rates, thresholds and special regimes are set in federal law and published by the authorities, so this article explains the structure and points you to the official sources instead of quoting numbers.
The tax layers in the UAE: corporate tax and VAT
Corporate tax is a federal tax on business profits. The UAE Ministry of Finance corporate tax page is the authoritative source, and it states that the regime applies to financial years starting on or after 1 June 2023. VAT is a separate consumption tax on supplies of goods and services. The Federal Tax Authority (FTA) administers both and runs the registration portal. They have different registration rules and different deadlines, so a company can be in one, both or neither.
Corporate tax registration: who registers
As the Ministry of Finance describes it, companies that are subject to corporate tax are expected to register with the FTA, and this includes companies licensed in free zones. That surprises some founders. Being in a free zone changes how a company may be taxed, but it does not remove the registration step. Check the official guidance on who must register and by when, since deadlines are tied to licence dates and are published by the authority.
| Tax | Who it concerns | Where to read the rule |
|---|---|---|
| Corporate tax | Businesses within the scope of the corporate tax law, including free zone companies | Ministry of Finance, FTA |
| VAT | Businesses making taxable supplies above the registration threshold, or registering voluntarily | Federal Tax Authority |
| Home country tax | The owner’s tax residence country | Your own tax authority |
VAT registration: thresholds and process from the official source
VAT works through a threshold: registration is mandatory above a level of taxable supplies and optional below a lower one, according to the FTA. We do not quote the figures here, because thresholds and the VAT rate can change and belong on the authority’s own page. The process runs through the FTA’s online portal, and you will need your trade licence, details of the company and its owners, and information about the business activity. Our Dubai company formation services page and the pricing page mention VAT registration for the UAE as part of what is listed for Dubai.
Free Zone companies and tax: checking the official rules
You may read that free zone companies pay no tax. The accurate version is narrower. The corporate tax rules contain a regime for “qualifying” free zone persons, which applies only when specific conditions are met and covers specific types of income. A company that does not meet the conditions falls under the standard rules. Treat any claim of a general exemption, including one you hear from a friend or see in an advert, as a reason to read the Ministry of Finance page and ask an accountant which category your company falls into. Whether a free zone company that also trades with the mainland keeps its status is exactly the kind of question to put to a professional with your numbers in hand.
Dates matter here. Registration deadlines, tax periods and filing windows are published by the authority and can be updated, so note the date on any page you rely on. If you read an older blog post or forum thread, compare it with the current official page before acting on it, because the corporate tax regime is still new compared with other tax systems and guidance has been refined over time.
Books, records and annual filings
Tax registration is the start of a continuing routine. Expect to keep accounting records that support your filings, to file returns for each tax period, and to renew the licence each year with the issuing authority. Some licences and free zones add their own financial reporting rules, so check what your authority requires. Our Dubai page lists corporate tax registration and licence renewal among the obligations that continue after setup, and the pricing page lists accounting support and tax specialist support for the Free Zone package. See the current pricing page for what is included and what is charged separately.
Obligations in your country of residence
A UAE company does not close the tax questions in the country where you live. Many countries look at where the owner is resident, how profit is paid out, and sometimes where the company is managed. Those rules are national and differ widely. We do not give tax advice on them, and your own tax authority or an accountant who knows the rules in your country is the right place to start. Some countries also have tax treaties with the UAE that affect how income is treated, and whether one applies to you is another question for your accountant, not something to assume from a blog post.
Questions for your accountant
- Is my company in scope of UAE corporate tax, and does the free zone regime apply to me?
- When must I register for corporate tax, and for VAT?
- What records and filings do I need, and who prepares them?
- How will profits paid to me be treated in my country of residence?
- Which of my customers are inside the UAE, and how does that affect VAT?
Frequently asked questions
Is a Free Zone company exempt from corporate tax?
Not automatically. A special regime exists for qualifying free zone persons, with conditions. Read the Ministry of Finance page and ask an accountant.
Do I have to register for VAT?
It depends on your taxable supplies and the FTA’s current rules. Check the official source for the threshold and the process.
Who files the returns?
The company is responsible for filing. You can prepare the returns yourself or work with an accountant. Our pricing page lists accounting support for Dubai packages.
Does this article replace tax advice?
No. It is general information. Individual questions belong with a qualified tax advisor.
If you are comparing setups, the free consultation contact page is the easiest way to reach us, and the company formation application form is there when you are ready. Our article on choosing between a Free Zone and a Mainland company covers the licence side.