Running a small business in the UAE is exciting, but when it comes to filing taxes, many entrepreneurs feel overwhelmed. With corporate tax now in effect, it has become crucial for business owners—whether freelancers, startups, or SMEs—to understand how tax filing works and how to stay compliant without unnecessary stress.
This guide explains everything you need to know about small business tax filing in the UAE for 2025: who needs to file, how to prepare, deadlines you can’t miss, and common mistakes to avoid.
What Is Corporate Tax in the UAE?
Corporate Tax (CT) is a direct tax on the net profit of businesses, introduced on June 1, 2023. The UAE government rolled out this tax to align with global practices, diversify income away from oil, and strengthen its reputation as a global financial hub.
Key Highlights of UAE Corporate Tax:
- Standard Rate: 9% on taxable income above AED 375,000
- 0% Rate: For taxable income up to AED 375,000 (supporting startups and smaller businesses)
- Who It Applies To: Almost all UAE businesses, including mainland and free zone entities (some free zones qualify for special incentives)
- Exemptions: Government bodies, certain natural resource businesses, and approved charities/public entities
- Annual Filing: All businesses must file a corporate tax return, even if they qualify for the 0% rate
Do Small Businesses in the UAE Need to File Corporate Tax?
Yes. Even if your taxable income is under AED 375,000, you must still file a tax return with the Federal Tax Authority (FTA). Filing ensures your company remains compliant, avoids penalties, and builds credibility with banks, investors, and regulators.
Whether you are:
- A sole proprietor
- A licensed freelancer
- A startup or SME
…you must file a return each financial year through the EmaraTax portal.
What Counts as a Small Business Under UAE Corporate Tax Rules?
The UAE introduced Small Business Relief for entities with annual revenue not exceeding AED 3 million (valid until Dec 31, 2026).
- If your revenue is below this threshold, you can elect to be treated as having no taxable income.
- However, filing a return remains mandatory—you cannot skip reporting, even if no tax is due.
Revenue Thresholds & 0% Tax Bracket
- Small Business Relief
- Revenue ≤ AED 3M (June 2023 – Dec 2026) → Simplified filing, no taxable income considered.
- 0% Tax Rate
- Taxable income ≤ AED 375,000 → No tax payable, but return still required.
- Exempt Entities
- Government and government-controlled entities
- Extractive industries meeting exemption rules
- Qualifying free zone entities (subject to substance requirements)
- Charities & public benefit organizations approved by UAE Cabinet
Key Corporate Tax Deadlines in 2025
Every company must file within 9 months after the financial year-end.
| Financial Year-End | Tax Filing Deadline |
| 31 Dec 2024 | 30 Sep 2025 |
| 31 Mar 2025 | 31 Dec 2025 |
| 30 Jun 2025 | 31 Mar 2026 |
Extra Notes:
- Freelancers & individuals earning over AED 1M in 2024 must register by 31 March 2025.
- New or dissolved businesses with short periods had special deadlines ending 31 Dec 2024.
Penalties apply for missing deadlines, including fines starting from AED 500 up to AED 20,000+ for repeated non-compliance.
Step-by-Step: How to File Corporate Tax in UAE
- Check if Your Business Must File
Almost all UAE businesses must register and file unless fully exempt. Small Business Relief does not remove the filing obligation.
- Register on the EmaraTax Portal
Corporate tax registration is mandatory. Get your Tax Registration Number (TRN) before your first return is due.
- Organize Financial Records
Keep accurate bookkeeping—income, expenses, invoices, payroll, and receipts. This makes tax calculation easier and helps in case of FTA audits.
- Calculate Taxable Income
Taxable income = Business revenue – Deductible expenses.
- If ≤ AED 375,000 → 0% tax
- If > AED 375,000 → 9% on the amount above threshold
- File Corporate Tax Return (CTTR)
Log into EmaraTax, complete the CTTR form, declare income, apply relief (if eligible), and review before submission.
- Pay Any Tax Due
If your return shows liability, settle payment via EmaraTax before the deadline to avoid fines.
- Retain Supporting Documents
Maintain financial records for at least 7 years. These may be requested by the FTA for verification.
Common Mistakes to Avoid in Small Business Tax Filing
- Missing Filing Deadlines → Even if no tax is due, late filing attracts penalties.
- Poor Record-Keeping → Disorganized accounts lead to errors and compliance issues.
- Assuming No Need to File → Relief or 0% rate does not exempt you from filing.
- Ignoring Deductions → Not claiming eligible business expenses increases your taxable amount.
- Incorrect Information → Simple errors can delay processing or trigger audits.
- Not Seeking Expert Help → Tax rules are new and complex—consulting a tax advisor can save money and stress.
Penalties for Non-Compliance
- AED 10,000 – Failure to register for corporate tax
- AED 500/month – Late filing penalty
- AED 1,000+ – Failure to maintain accurate records
- Up to AED 50,000 – False reporting or evasion
- Interest charges – Applied to unpaid taxes until fully settled