UAE Corporate Tax: Key Updates for 2025
The UAE Ministry of Finance released new guidance on small business relief and transfer pricing rules under the 9% corporate tax regime.
The UAE corporate tax regime, which came into effect for financial years starting on or after 1 June 2023, has seen several important clarifications published by the Federal Tax Authority (FTA) heading into 2025.
Small Business Relief Extended Businesses with revenue below AED 3 million can elect for Small Business Relief, effectively paying 0% corporate tax. The FTA confirmed this threshold remains in place through the 2025 financial year.
Transfer Pricing Documentation From 2025, entities with related-party transactions exceeding AED 40 million must prepare a Local File. Master File requirements apply to multinational groups with consolidated revenues above AED 3.15 billion.
Free Zone Entities Qualifying Free Zone Persons continue to benefit from a 0% rate on Qualifying Income. The FTA issued updated guidance clarifying which activities constitute Qualifying Income — particularly for financial services, logistics, and holding structures.
Action Points - Review your entity's revenue against the SBR threshold - Assess whether transfer pricing documentation obligations apply - Confirm your Free Zone entity's qualifying status with your tax advisor