CORPORATE TAX & TRANSFER PRICING
Corporate Tax (CT), also known as Corporate Income Tax (CIT) or Business Profits Tax, is a direct tax imposed on the net income or profit of corporations and other businesses.
It is calculated as:
Taxable Income = Accounting Profit ± Adjustments as per Tax Law
Revenue generation for government spending.
Economic transparency and alignment with international tax standards.
Curbing tax evasion and ensuring fair contribution.
Encouraging compliance with OECD’s Base Erosion and Profit Shifting (BEPS) framework.
Definition of Corporate Tax
Introduced by Federal Decree-Law No. 47 of 2022, effective 1 June 2023.
Taxable Persons
Resident Persons
Companies incorporated or otherwise formed under UAE law (Mainland or Free Zone).
Foreign companies whose Place of Effective Management (POEM) is in the UAE.
Natural persons engaged in a business or commercial activity in the UAE (as defined under Cabinet Decision No. 49 of 2023).
Non-Resident Persons
With a Permanent Establishment (PE) in the UAE.
Deriving UAE-sourced income.
Having Nexus in UAE (as per Ministerial Decision No. 83 of 2023).
Who Needs to Register for Corporate Tax
Our team of qualified Chartered Accountants and Tax Consultants provides comprehensive, end-to-end Corporate Tax and Transfer Pricing support tailored to your business model.
1. Registration & De-registration
Eligibility Review: We assess your requirement to register or qualify for de-registration, identifying potential exemptions or reliefs.
Documentation: We handle all filings, including trade licenses, MOAs, liquidation reports, and closure certificates.
FTA Liaison: We manage the entire application process through the FTA portal, ensuring your TRN is active or officially cancelled without outstanding obligations.
2. Compliance & Tax Filing
Financial Analysis: We reconcile accounting profits with taxable income, identifying disallowable expenses and exempt income.
Return Preparation: Our experts prepare, review, and file your CT returns accurately and before the deadline.
Post-Filing Support: We assist with FTA queries, clarifications, and voluntary disclosures to ensure peace of mind.
3. Transfer Pricing (TP) & Risk Management
Documentation: We develop Master Files, Local Files, and TP disclosure forms.
Benchmarking & Policy: We use reliable data to establish arm’s length pricing and design compliant TP frameworks for related-party transactions.
Risk Assessment: We identify potential exposure areas to keep your business audit-ready.
4. Strategic Advisory & Ongoing Support
Customized Guidance: Strategic tax planning and record-keeping guidance, including tax grouping and compliance calendars.
Continuous Updates: Ongoing consultation on changing FTA notifications and new regulations.
In-house Training: Specialized training designed to build tax compliance expertise within your own team.
Unmatched UAE Tax Expertise: Leverage our deep understanding of UAE Corporate Tax law, FTA procedures, OECD TP Guidelines, and Free Zone frameworks. Our team has proven experience supporting hundreds of local businesses .
Accuracy & Penalty Prevention: We ensure fast, error-free processes for all filings, registrations, and de-registrations, with proactive deadline management to safeguard your business from costly FTA penalties.
Strategic & Personalized Advisory: Receive customized, data-driven insights on deductions, reliefs, and transfer pricing to optimize your tax position while ensuring full compliance and minimizing risks.
Transparent & End-to-End Support: We offer a client-focused, professional service with transparent fees, providing integrated support from final tax filing to TRN cancellation and post-advisory assistance for continuous readiness.
“Stay compliant, stay ahead with P1 — your trusted Corporate Tax Partner in the UAE.”
How P1 CONSULTANTS Helps
Why Choose P1 CONSULTANTS:
Objectives of Corporate Tax
Scope of UAE Corporate Tax
All entities (unless specifically exempt) must register and obtain a Tax Registration Number (TRN) from the Federal Tax Authority (FTA).
Mainland Companies
Mandatory, All UAE-incorporated companies, including LLCs, PSCs, PJSCs, etc.
Free Zone Companies
Mandatory, Even if they qualify for 0% rate, must register and file CT returns.
Foreign Company Branch (in UAE)
Mandatory, Treated as part of the foreign parent; taxable on UAE-sourced income only.
Foreign Company without PE or Nexus
Not required, Unless they have a fixed place of business, dependent agent, or UAE-sourced income triggering nexus.
Mandatory, Only if annual business turnover exceeds AED 1 million in a calendar year.
Natural Person (Individual in Business)
Exempt Entities
Must apply and obtain exemption approval from FTA (e.g., public benefit entities, pension funds).
Tax Rate
Taxable Income
Applicable Rate
Up to AED 375,000
Above AED 375,000
Qualifying Free Zone Person (QFZP)
Multinational Enterprises (≥ EUR 750M revenue)
0%
9%
0% on qualifying income subject to certain condition, otherwise 9% on total income
15% (Pillar Two / Global Minimum Tax)
Exempt Persons
Government entities and government-controlled entities.
Extractive and non-extractive natural resource businesses.
Qualifying public benefit entities.
Qualifying investment funds.
Pension and social security funds.
Taxable Income Calculation
Based on accounting net profit (as per IFRS), adjusted for tax purposes:
Disallowed expenses (e.g., fines, bribes, non-business costs).
Exempt income (e.g., qualifying dividends).
Expenses incurred on exempt income
Transfer pricing adjustments.
Tax depreciation adjustments.
CT Filing & Compliance
Tax Period: Generally follows the company’s financial year.
Tax Return Filing: Within 9 months of financial year end.
Payment Due: Generally along with return submission but not later than 9 months of financial year end.
Record Keeping: Minimum 7 years following the end of the Tax Period to which they relate.
Transfer Pricing: Arm’s length principle applies; Master file, Local file, disclosure and documentation required if thresholds met.
Additional Compliance for Free Zone Entity
To qualify for 0% CT, a Free Zone Person must:
Maintain adequate economic substance in the UAE.
Earn qualifying income (as per Cabinet Decision No. 55 of 2023).
Comply with transfer pricing and filing obligations.
Not opt out of the Free Zone regime.
Must maintain audited Financial Statements.
non-qualifying Revenue must not exceed the lower of AED 5 million or 5% of its total Revenue (de minimis requirement).
Important Note: A Qualifying Free Zone Person that elects to be subject to the standard Corporate Tax rules and rates or that fails to meet any of the conditions to be a Qualifying Free Zone Person will cease to be a Qualifying Free Zone Person from the beginning of the Tax Period for which it elects to be subject to the standard Corporate Tax rules and rates or in which it fails to meet the conditions to be a Qualifying Free Zone Person, and the four subsequent Tax Periods.
Transfer Pricing
Must follow arm’s length principle (Article 34 & 55 of CT Law).
Requires supporting documentation and disclosure in tax return.
Applies to related party and connected person transactions.
Summary
All businesses (Mainland, Free Zone, Branch) must register with FTA.
Free Zone 0% rate applies only to qualifying income.
Foreign branches are taxable on UAE income.
Exempt entities still require registration and approval.
UAE Corporate Tax ensures global compliance, transparency, and competitiveness.