Rayhan Aleem, Founder of UAE-based accounting firm Alpha Pro Partners and Tax Star, stresses that businesses must prepare for the 30 Sept 2025 Corporate Tax deadline by registering, filing, and paying on time to avoid penalties.
As a UAE business owner, you should be aware of the introduction of Corporate Tax and how it affects your organisation. But with the 30 September 2025 filing deadline fast approaching, it’s worth reminding yourself of the rules to ensure that you and your accounting team are fully prepared ahead of filing and beyond. Otherwise, any mistakes or delays can lead to significant penalties.
Here are the key things small businesses and their accountants should check well in advance of the deadline:
1. Register on Time
The first step is to register for Corporate Tax before the deadline set by the FTA. All businesses, including mainland and Free Zone entities, must register for Corporate Tax, regardless of whether they expect to pay tax. The registration deadline varies based on your trade license issue date, and exempt entities must still apply for exemption; it’s not granted automatically.
The penalty for late registration is AED 10,000.
However, businesses could apply for a penalty waiver but only if they have submitted their first return or declaration within 7 months after their year-end (i.e., 31 June 2025). For the financial year 1 January to 31 December 2024, that waiver window has already closed.
If you haven’t registered or filed yet, act fast. Additional delays could lead to more fines and complications.
2. Know Your First Tax Period
Your tax period typically aligns with your financial year. With most companies operating on a fiscal year that ends on 31 December, the first tax period runs from 1 January 2024 to 31 December 2024. Therefore, your first return and payment are due by 30 September 2025.
3. File the Return Within 9 Months
Tax returns must be filed within nine months of the end of your financial year. For example, if your year ends on 31 March 2025, you must file by 31 December 2025. Even if you don’t owe tax, you still need to file a return within the correct timeframe.
4. Pay on Time to Avoid Monthly Fines
If your payment is late, monthly penalties apply:
- AED 500/month for the first 12 months
- AED 1,000/month from the 13th month onwards
- Delays can quickly add up, so timely payment is key.
5. Prepare Proper Financial Statements
Financial statements are the foundation for calculating your taxable income, and the method you use to prepare your statements depends primarily on your business’s annual revenue.
- Under AED 3 million→ You can use cash basis accounting
- Over AED 3 million→ You must use accrual accounting
Under AED 50 million→ You can use International Financial Reporting Standards (IFRS) for SMEs
6. Keep Records for All Transactions
The FTA requires businesses to maintain proper documentation for seven years after the end of each tax period. These records must support your tax return and allow the FTA to verify your income, assets, and expenses. This is critical for maintaining compliance with UAE tax regulations and facilitating any future audits.
The FTA requires documentation that:
- Supports your tax return
- Allows the FTA to verify taxable income
- Includes records of transactions, liabilities, assets, and end-of-period stock
7. Submit via EmaraTax
All corporate tax-related activities in the UAE, from registration to return filing and exemption applications, must be carried out through the FTA’s EmaraTax portal. This is also your primary communication tool with the FTA for reminders, correspondence, and updates. Make sure your business is set up and familiar with how the system works.
8. Apply for Small Business Relief (if eligible)
If your annual revenue is below AED 3 million, you may qualify for Small Business Relief. This allows you to opt out of calculating taxable income and avoid submitting a detailed tax return. However, you are still required to register for Corporate Tax and file a simplified declaration confirming your eligibility each tax period.
9. Review Related Party and Transfer Pricing Requirements
If your business has transactions with related parties such as shareholders, subsidiaries, or group companies you must comply with the UAE’s transfer pricing rules. This includes maintaining proper documentation to demonstrate that these transactions were conducted at arm’s length.
- Prepare a Local File and Master File if required
- Submit a Disclosure Form along with your Corporate Tax return
- Understand the thresholds early to ensure full compliance
10. Don’t Forget Exempt Entities
Public benefit entities, pension funds, and other exempt persons still need to apply for recognition and submit on time. Being exempt doesn’t mean being off the hook for registration or deadlines.
The UAE’s Corporate Tax regime introduces a new layer of responsibility for businesses of all sizes. By taking a proactive approach, registering early, understanding your obligations, and equipping your finance team with the right Corporate Tax software, you’ll stay compliant and avoid unnecessary penalties.
