Who Is Required to File Corporate Tax in the UAE ? – The 2026 Complete Guide

Who Is Required to File Corporate Tax in the UAE ? – The 2026 Complete Guide

Who Is Required to File Corporate Tax in the UAE ?

The UAE’s corporate tax regime has brought a transformative change to the country’s tax landscape. Traditionally known for minimal direct taxation, the UAE introduced a federal Corporate Tax effective from 1 June 2023 — marking a major shift for businesses across jurisdictions, industries, and sizes. Whether you operate a mainland LLC, a Free Zone entity, a foreign branch with UAE activities, or a sole proprietorship, it’s essential to know who is required to file corporate tax returns and what that filing obligation truly entails as we move deeper into 2026.

In this complete guide, we’ll walk through:

🔹 The core concept of a “Taxable Person” in the UAE corporate tax framework.

🔹 Specific categories of businesses and individuals subject to filing obligations.

🔹 Filing requirements for Free Zone entities and permanent establishments.

🔹 Thresholds, exemptions, and special cases (including natural persons).

🔹 Practical examples and compliance tips — with up-to-date guidance based on Federal Tax Authority (FTA) and Ministry of Finance norms.

UAE Corporate Tax in Context :

What Is UAE Corporate Tax?

Corporate Tax in the UAE applies across various business structures and is governed by Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses. It aims to align the UAE with global tax standards while preserving its appeal as a thriving business hub. All taxable entities must register, file, and (if applicable) pay Corporate Tax through the Federal Tax Authority’s EmaraTax portal.

The filing obligation is not optional — even entities with zero income or qualifying for a 0% rate must submit a return to remain compliant with UAE law.

What Is a “Taxable Person” in the UAE ?

The first step in understanding your filing obligation is determining whether your business qualifies as a Taxable Person. Under UAE Corporate Tax rules, a “Taxable Person” typically includes:

• UAE resident juridical persons — companies and legal entities incorporated or effectively managed in the UAE.

• Non-resident juridical persons — foreign companies with a permanent establishment (PE) in the UAE or with UAE-sourced income attributable to a PE.

• Natural persons carrying out business activities in the UAE under specific turnover conditions.

• Free Zone Persons — including Free Zone companies, which are taxable but may qualify for special incentives or a 0% rate if conditions are met.

This broad definition makes it essential for all businesses — regardless of size, structure, or profitability — to assess their status under the Corporate Tax Law

Core Filing Requirement: Who Must File a Corporate Tax Return ?

A. Resident Juridical Persons

Resident juridical persons include companies and legal entities established and conducting business in the UAE — including mainland companies, joint ventures, partnerships, and similar structures.

Key Points:

• All UAE-resident companies must file an annual Corporate Tax return, irrespective of revenue levels or profitability.

• This applies whether the entity is profitable, breaks even, or incurs a loss — nil returns are still mandatory.

• Registration with the FTA and maintenance of accurate financial records are prerequisites for filing.

Examples:

1.  Limited Liability Companies (LLCs) in Dubai or Abu Dhabi.

2.  Private and Public Joint-Stock Companies.

3.  Partnerships and other incorporated legal structures.

B. Free Zone Companies

Free Zone entities have unique characteristics under UAE Corporate Tax rules. They are included under the definition of Taxable Persons and must file returns, though certain incentives may reduce liability to 0%.

Important Distinction:

•   Qualifying Free Zone Persons (QFZPs) may be eligible for a 0% tax on qualifying income — but must still register and file a Corporate Tax return to demonstrate compliance and eligibility.

•  Non-qualified Free Zone entities must register and file in the same manner as mainland companies.

Why This Matters:

Failing to file a return — even if your Free Zone business is effectively tax-free — can attract penalties for non-compliance.

C. Non-Resident Juridical Persons

Foreign entities not resident in the UAE may also be required to file Corporate Tax if they:

•  Have a permanent establishment (PE) — such as a branch, office, warehouse, or distribution center — in the UAE.

•   Derive income from a UAE source that is attributable to a PE.

This category typically affects multinational firms, international consulting companies, and cross-border businesses with physical or economic presence in the UAE.

Example:

A UK company operating a logistics hub in Sharjah must file UAE Corporate Tax returns for income attributable to that hub.

D. Natural Persons (Individual Business Operators)

A less obvious but increasingly significant category is natural persons — individuals conducting business activities in the UAE.

Under specific regulations:

•  Natural persons whose business turnover exceeds AED 1 million per year must register and file Corporate Tax returns.

•  Registered individuals who fall below this threshold in subsequent years must still submit a nil return within the specified timeframe.

This applies to freelancers, sole proprietors, consultants, and individuals earning income through licensed business activities.

Thresholds, Exemptions & Nuances in Filing Obligation :

A. Profit Thresholds and Filing

It’s a common misconception that only businesses with a taxable profit must file tax returns. This is not the case. Even if your entity:

• Generates no revenue,

• Earns profit below the AED 375,000 threshold, or

• Is eligible for a 0% rate,

You must still register and file a return to maintain legal compliance and avoid fines.

Filing a “nil return” — which declares that no corporate tax is payable — informs the FTA of your status and protects your corporate records from penalties.

B. Exemptions and Special Cases

Some entities may be exempt from corporate tax on the tax liability front but might still have an obligation to register or file. These include:

•  Certain government entities and government-controlled bodies.

•  Public benefit organizations and qualifying investment funds.

•  Pension and social security funds, subject to FTA approval.

•  Extractive and non-extractive natural resource businesses under specific Cabinet decisions.

Although exempt from paying tax, these entities may still be required to register and submit simplified declarations that outline their exempt status and confirm that they meet eligibility criteria

C. Small Business Relief & Filing

The UAE Corporate Tax framework includes provisions such as Small Business Relief — enabling eligible entities to reduce or nullify their tax liability if they meet specific revenue and operational criteria.

Even in these cases, filing obligations remain in force and nil returns must be submitted.

Filing Deadlines & Compliance Expectations :

Filing deadlines in the UAE are generally structured around a nine-month period from the end of the financial year. For example:

• Financial Year Ending 31 Dec 2025 → Filing Date: 30 Sept 2026 (typical deadline).

It’s important to plan for both filing and payment deadlines, as failure to do so can result in administrative penalties and interest on unpaid tax.

Penalties for Failing to File :

Non-compliance is taken seriously by the FTA. Penalties for failing to register, file, or pay corporate tax include :

• AED 10,000 for failure to register on time.

• Monthly fines (AED 500-1,000) for late filing.

• Interest charges on overdue corporate tax amounts.

• Additional penalties may apply if incorrect or incomplete filings are submitted.

These penalties apply even if no tax is due — another reason why nil returns must be filed.

Practical Compliance: Filing Even with Zero Profit :

Non-compliance is taken seriously by the FTA. Penalties for failing to register, file, or pay corporate tax include :

• They operated at a loss.

• They had no taxable income.

• They fall below the AED 375,000 profit threshold.

This is incorrect. All taxable persons — whether they owe tax or not — must submit annual returns, or face penalties.

Illustrative Scenarios :

Let’s look at practical scenarios to illustrate who must file :

Scenario 1: Free Zone Startup

A Free Zone tech startup with minimal revenue :

• Must register with FTA.

• Must file an annual Corporate Tax return.

• May pay 0% on qualifying income, but nil return still required.

Scenario 2: Foreign Company Branch

A German retail company operates a UAE showroom:

• Its UAE branch has a PE — tax return filing is required.

• Only the UAE income portion is relevant for UAE Corporate Tax.

Scenario 3: Freelancer Consultant

An independent consultant with AED 1.2 million turnover:

• Must register as a Taxable Person.

• Must file Corporate Tax returns annually.

Scenario 4: Exempt Public Fund

A qualifying investment fund approved by the FTA:

•  May be exempt from tax, but must register and potentially file simplified returns.

Preparing for Your 2026 Filing :

To ensure smooth compliance and reduce risk :

1. Know your status — are you a taxable person?

2. Register early with the FTA.

3. Maintain accurate financial records.

4. Plan for filing and payment deadlines at least 3-6 months in advance.

5. Consult professional advisors if your structure is complex or multinational.

Because compliance requirements continue to evolve — including transfer pricing documentation and minimum effective tax rules — staying informed and proactive is essential in 2026 and beyond.

Conclusion :

In the UAE’s modern tax environment, almost every business conducting commercial or qualifying economic activity needs to file a Corporate Tax return — whether it’s a resident company, a Free Zone entity, a foreign branch with a UAE footprint, or an individual business exceeding threshold limits.

Understanding who must file is the first step toward tax compliance and safeguarding your business against penalties, license issues, and operational disruptions. With the UAE steadily implementing international tax norms, proactive compliance not only keeps you legally secure — it strengthens your market credibility.

If you’re unsure about your tax status or need help with corporate tax registration, documentation, or return filing — consider seeking guidance from qualified UAE tax professionals to ensure your business meets its obligations smoothly and efficiently.