UAE Corporate Tax in 2025: Key Compliance Deadlines & Penalties to Avoid

Dubai, UAE

The UAE's corporate tax landscape has evolved significantly, with the introduction of a 9% corporate tax on business profits above AED 375,000. As businesses navigate 2025, understanding key compliance deadlines and avoiding penalties is essential to maintaining smooth operations and legal compliance. This blog outlines the critical deadlines and the repercussions of missing them.

Key Corporate Tax Compliance Deadlines in 2025

1. Corporate Tax Registration

All taxable businesses must register with the Federal Tax Authority (FTA). While specific deadlines vary, companies incorporated before June 1, 2023, must ensure registration is completed by mid-2025. Newly incorporated businesses must register within 90 days of incorporation.

2. Tax Return Filing & Payment

Businesses must file their corporate tax returns and settle their tax liabilities within nine months from the end of their financial year. For most companies with a standard fiscal year ending on December 31, 2024, the tax return must be filed by September 30, 2025.

3. Transfer Pricing Documentation

Companies engaging in related-party transactions must comply with transfer pricing regulations. Businesses that exceed the prescribed revenue threshold must prepare transfer pricing documentation, which should be submitted with their tax returns or upon request from the FTA.

4. Advance Tax Payments (if applicable)

While the UAE corporate tax framework does not mandate advance tax payments, businesses should ensure they plan adequately for their tax liabilities to avoid cash flow issues at the time of payment.

Penalties for Non-Compliance

Failing to comply with corporate tax regulations can result in severe financial penalties and legal consequences. Below are some of the primary penalties businesses must avoid:

1. Late Registration Penalties

Companies that fail to register for corporate tax on time may face penalties imposed by the FTA, which could accumulate daily.

2. Late Filing and Payment Penalties

• Failure to file corporate tax returns by the deadline may result in fines starting from AED 10,000.

• Late payment of tax liabilities may lead to accumulating penalties based on the duration of the delay.

3. Failure to Maintain Proper Records

Businesses are required to maintain proper accounting records and documentation for at least seven years. Non-compliance could lead to penalties and increased scrutiny from the FTA.

4. Transfer Pricing Non-Compliance

Failure to submit required transfer pricing documentation or non-compliance with arm’s length principles may result in substantial financial penalties.

5. Tax Evasion & Misreporting

Intentional misreporting or tax evasion may lead to severe penalties, including heavy fines and potential legal action against the company and its management.

Best Practices for Corporate Tax Compliance

To avoid penalties and ensure smooth tax compliance, businesses should adopt the following best practices:

• Register early: Avoid last-minute registration delays.

• Meet filing deadlines: Set internal reminders and use automated accounting software to track deadlines.

• Maintain accurate records: Proper documentation can help in audits and compliance checks.

• Consult tax professionals: Engage tax advisors to ensure full compliance with UAE corporate tax laws.

• Stay updated: Regularly check for updates from the FTA to remain compliant with any regulatory changes.

Final Thoughts

Navigating UAE corporate tax compliance in 2025 requires diligence and proper planning. By adhering to key deadlines and avoiding common pitfalls, businesses can ensure compliance while minimizing financial and legal risks. If you need expert assistance with corporate tax registration, filings, or compliance strategy, consult a tax advisory firm to stay ahead of the evolving tax landscape in the UAE.