Corporate Tax in Abu Dhabi Explained for New Companies

Abu Dhabi continues to be a global magnet for entrepreneurs and investors. The Emirate’s business friendly laws, modern infrastructure, and investor focused regulatory ecosystem make it one of the easiest places in the world to establish and scale a company. Whether you are launching a mainland business through Abu Dhabi DED or setting up in a free zone like ADGM or ADAFZ, understanding corporate tax is now essential.

Since the introduction of Federal Corporate Tax under Decree Law No. 47 of 2022, new business owners across the UAE have been re evaluating their financial structures, compliance needs, and overall tax strategy. Many new startups rely on assistance from firms like Nines Consultancy, particularly during their early establishment phase.

If you are also in the process of launching a business, you may already be exploring related services such as Abu Dhabi Mainland Company Formation, Free Zone Company Setup or even VAT Registration in UAE. Corporate tax now plays a central role in all these areas.

This detailed guide breaks down everything you need to know about corporate tax in Abu Dhabi, explained in simple, practical language. And if you need hands-on help with corporate tax registration, accounting, VAT filing, or company setup, Nines Consultancy is always here to support you.

WHAT IS CORPORATE TAX IN ABU DHABI?

Corporate Tax (CT) in the UAE is a federal tax applied to the taxable income of businesses. It applies to companies licensed in Abu Dhabi mainland, free zones, and even foreign companies with a permanent establishment in the UAE.

Corporate Tax Rates

• 0 percent for taxable income up to AED 375,000
• 9 percent for taxable income above AED 375,000
• Special rates for large multinational groups under OECD Pillar Two

Who Must Pay Corporate Tax?

• Abu Dhabi mainland companies (under Abu Dhabi DED)
• Free zone companies (ADGM, ADAFZ, KIZAD, Masdar City)
• Foreign businesses with UAE branches
• Professional freelancers with commercial licenses

If you are still completing your licensing or renewal, our PRO Services in UAE can guide you through the documentation and compliance side smoothly.

Who Is Exempt?

• Government owned entities
• Certain natural resource businesses
• Some free zone companies (Qualifying Free Zone Person criteria apply)
• Personal income not connected to business

WHY CORPORATE TAX MATTERS FOR BUSINESSES IN ABU DHABI

Corporate tax impacts everything from pricing to financial planning. Abu Dhabi has a diverse mix of regulatory bodies, such as Abu Dhabi DED, ADGM, ADAFZ, Masdar City, and the Federal Tax Authority, each with varying compliance expectations.

1. Mainland (DED) Companies

• Must register for CT
• Must maintain proper accounting systems
• Must file annual returns
• May need audits
  If you are considering setting up a mainland business, learn more here: Mainland Company Formation UAE.

2. Abu Dhabi Free Zone Companies

Free zones remain tax-friendly, but only qualifying income enjoys the 0 percent CT rate.
To avoid compliance issues, many companies take up our Free Zone Business Setup Services to ensure tax structuring is done correctly.

3. Foreign Branches & Investors

If a foreign company has a permanent establishment in Abu Dhabi, it becomes liable for UAE corporate tax.

4. Accounting & Audit Requirements

Corporate tax requires accurate bookkeeping, income categorization, and sometimes mandatory audits.
We support this through our Accounting & Bookkeeping Services  and Corporate Tax Filing Services.

STEP BY STEP PROCESS FOR CORPORATE TAX REGISTRATION & COMPLIANCE

Step 1: Confirm Your Tax Residency

Identify whether you are:

• Mainland company
• Free zone entity
• Foreign branch

This directly affects tax classification and rate eligibility.

Step 2: Register on FTA’s EmaraTax Portal

You will need:

• Trade license
• Shareholder documents
• Company details
• Bank information

If you are still in the business setup phase, our Business Setup in Abu Dhabi page explains how we help entrepreneurs complete all pre-licensing requirements.

Step 3: Implement Proper Accounting

Corporate tax requires:
• Financial statements
• General ledgers
• Expense records
• Bank reconciliations

Our VAT & Tax Consultancy UAE ensures your accounts meet FTA standards.

Step 4: Calculate Taxable Income

The formula includes adjustments for:

• Non deductible expenses
• Unrealised gains
• Entertainment limitations
•  Free zone qualifying income
• Transfer pricing adjustments

Step 5: Comply with Transfer Pricing

Related party transactions must follow OECD guidelines and be documented.
If your business is expanding or restructuring, our Professional Tax Advisory Team supports compliance.

Step 6: File Annual Corporate Tax Return

Deadline: within 9 months after the financial year ends.
You must submit:

• CT return
• Financial statements
• Supporting schedules

We handle all of this through our Corporate Tax Registration & Filing Services.

BENEFITS OF CORPORATE TAX FOR NEW BUSINESSES IN ABU DHABI

1. Low Tax Environment

At 9 percent, the UAE remains one of the most tax efficient jurisdictions globally.

2. SME Friendly Threshold

AED 375,000 tax free threshold supports startups.

3. Strong Global Credibility

Corporate tax aligns businesses with international compliance systems.

4. Free Zone Incentives

Qualifying Income can still benefit from 0 percent CT.

5. Double Taxation Relief

UAE has 135 tax treaties worldwide, attracting global investors.

COST, DOCUMENTS, AND TIMELINES

Documents Required

• Trade license
• MOA or AOA
• Passport & Emirates ID copies
• Tenancy contract
• Bank account details
• Previous financial statements (if available)

Timeline

• Registration: 5 to 15 working days
• Accounting: monthly
• Annual return: once per year

Cost

Registration is free. Professional fees vary depending on:

• Company size
• Accounting complexity
• Free zone or mainland structure

If you also need help with company closure or restructuring, visit:
Company Liquidation Services UAE.

WHY CHOOSE NINES CONSULTANCY FOR CORPORATE TAX IN ABU DHABI

Nines Consultancy provides end to end tax compliance support for startups, SMEs, and large enterprises.

Our Advantages

• UAE based tax experts
• FTA compliant processes
• Accounting & bookkeeping support
• Transfer pricing advisory
• Free zone qualifying income guidance
• Transparent and fixed fee plans
• One on one consultation with tax advisors

If you’re also planning long-term residency in the UAE, explore our UAE Golden Visa Services.

Call or WhatsApp: +971529757543

 

1. Do all Abu Dhabi businesses need corporate tax registration?

Yes, all companies must register, including free zone and mainland entities, even if exempt.

2. Does corporate tax replace VAT in the UAE?

No. VAT and Corporate Tax are separate. Learn more about VAT here: VAT Registration & Filing UAE.

3. Do Abu Dhabi free zone companies pay corporate tax?

Only if they do not meet Qualifying Free Zone Person criteria.

4. Are freelancers subject to corporate tax?

Freelancers with commercial licenses may fall under CT depending on business income.

5. Can Nines Consultancy handle my entire CT filing?

Yes. From registration to annual filing, we manage the complete corporate tax cycle.

 

Corporate tax is now part of the UAE’s modern financial landscape. Abu Dhabi remains a highly profitable and investor friendly location, but compliance is critical for every business. Whether you are forming a new company or restructuring an existing one, professional tax support ensures accuracy and avoids penalties.

Nines Consultancy helps you register, calculate, file, and comply with all corporate tax requirements in Abu Dhabi.

Call or WhatsApp: +971529757543

Your compliance. Your growth. Your peace of mind.