VAT and corporate tax registration for new UAE companies

A company incorporated in the UAE on or after 1 March 2024, including a free zone company, must apply to the Federal Tax Authority (FTA) for corporate tax registration within three months of incorporation, under FTA Decision 3 of 2024. VAT works differently: registration becomes mandatory only once taxable supplies and imports exceed AED 375,000 over the past 12 months, or are expected to within the next 30 days, and voluntary registration is possible above AED 187,500. The FTA charges AED 10,000 for late registration under either tax.

Corporate tax: who must register

The FTA's corporate tax registration page states that all juridical persons subject to corporate tax must register with the FTA. Its Free Zone Persons bulletin confirms that this includes free zone companies: a Free Zone Person, including a Qualifying Free Zone Person, should register within the timelines in FTA Decision 3 of 2024.

Corporate tax: the deadline for a new company

FTA Decision 3 of 2024 (issued 22 February 2024, effective 1 March 2024) sets these deadlines for companies created on or after 1 March 2024:

The decision also covers companies that existed before 1 March 2024. Their deadlines depended on the month their licence was issued, and all of them fell in 2024.

The FTA's registration page lists the documents it asks for, including the trade licence, the incorporation document or memorandum of association, and the Emirates ID and passport of owners holding more than 25% and of authorised signatories.

The first tax period. In Public Clarification CTP003 (August 2024), the FTA explains that if a company's first financial year under the Commercial Companies Law runs for between 6 and 18 months, it accepts that period as the first tax period. The company does not need to apply to change it.

Corporate tax: rates and Small Business Relief

Rates. Cabinet Decision 116 of 2022 sets the rates. Taxable income up to AED 375,000 is taxed at 0% and taxable income above that at 9%, according to the Ministry of Finance.

Free zone companies. The FTA's Free Zone Persons bulletin states that a Qualifying Free Zone Person pays 0% on its Qualifying Income and 9% on its other taxable income. It does not get the 0% band on the first AED 375,000. The conditions for that status are set out in our Qualifying Free Zone Person guide. A free zone company that does not meet them is taxed under the standard rules.

Small Business Relief. Ministerial Decision 73 of 2023 sets the revenue threshold for Small Business Relief. According to the FTA's Small Business Relief page, a business can use the relief only if its revenue is AED 3,000,000 or less in the current tax period and in every earlier one. The election is made for each tax period, and two groups cannot elect:

• a Qualifying Free Zone Person
• a member of a multinational group with consolidated group revenue above AED 3.15 billion

The relief originally applied only to tax periods ending on or before 31 December 2026. Ministerial Decision 131 of 2026 (issued 29 July 2026) extends it to tax periods starting on or after 1 June 2023 and ending on or before 31 December 2029. Electing for the relief does not remove the filing obligation: the FTA's September 2026 notice states that taxable persons eligible for Small Business Relief must still file a return and pay within nine months.

Returns. The FTA states that a tax return must be filed, and any tax paid, within nine months of the end of the tax period. For a calendar year ending 31 December 2025, it set the deadline at 30 September 2026.

VAT: mandatory and voluntary thresholds

The FTA's VAT registration page sets two thresholds for UAE-resident businesses:

A business that becomes required to register must submit its application within 30 days, according to the same page. Non-resident businesses follow separate registration rules; ask the FTA which apply. Once registered, a business files periodic VAT returns; the annual compliance calendar sets out the return timing.

How free zone companies fit into VAT

VAT registration depends on supplies and turnover, not on whether a company is licensed in a free zone or on the mainland. A small number of free zones, or parts of them, are VAT Designated Zones, which have special rules for goods. On whether a business in a Designated Zone that trades goods must register, the FTA's VAT registration page says it "depends on the nature of the activities and supplies". It adds that the FTA may ask for a business flow and documents showing how goods move. See our VAT Designated Zones guide for the FTA's list.

Penalties for late registration

The VAT penalty table was last amended by Cabinet Decision 129 of 2025, in force from 14 April 2026. The MoF's consolidated text still shows AED 10,000 for late registration.

Corporate tax waiver initiative. According to the FTA's registration page, its Late Registration Penalty Waiver Initiative can waive the AED 10,000 corporate tax penalty for a taxable person if it files its first tax return within seven months of the end of its first tax period, instead of the usual nine. Whether it applies to a particular company depends on its dates; ask the FTA or a licensed tax adviser.

Next steps

Note your incorporation date and count three months forward for the corporate tax deadline. Then track your taxable supplies against the VAT thresholds. If you are still choosing a zone, read how corporate tax treats free zone companies and the annual compliance calendar. You can also compare first-year and ongoing costs in the free zone renewal costs guide. For your own position, including whether you would be a Qualifying Free Zone Person, speak to the FTA or a licensed tax adviser.