CORPORATE TAX CHANGES IN THE UAE

An updated overview of corporate tax changes in the UAE as of 2025, covering new rules, deadlines, and compliance requirements.

Last Update: October 7, 2025

1. Pillar Two arrives: 15% Domestic Minimum Top-up Tax (DMTT)

UAE introduced a DMTT so in-scope multinationals pay at least 15% effective tax (OECD Pillar Two). Effective for periods starting on or after 1 Jan 2025. Applies to groups with consolidated revenue ≥ €750m (two of the four prior years). Action: If near the threshold, perform GloBE impact modeling, readiness checks, and safe harbor planning.

2. Free Zones: refreshed Qualifying Activities & Excluded Activities

Ministerial Decision No. 229 of 2025 updates the list of Qualifying Activities (eligible for 0% tax) and Excluded Activities under the QFZP regime. It repeals MD 265/2023 and is retroactive to 1 June 2023. Action: Free Zone entities should re-map revenues, verify substance, and test related-party/pricing rules to preserve 0% status.

3. New FTA guidance & tools (2025)

FTA issued:

CTP008: Family wealth management structures
CTP007: Financial statements & audit requirements for tax groups
User manuals: registration, returns, payments, de-registration

Action: Align accounting closes with 9-month filing rule; confirm tax group reporting requirements.

4. 2025 deadlines & enforcement focus

Corporate tax returns due 30 Sept 2025; register within 3 months to avoid penalties.

Filing/payment: For Dec 31, 2024 year-end, CT return & payment due 30 September 2025.

Registration timing: Register within 3 months of liability. Penalties may be waived in limited cases per FTA notice (July 2025).

5. What stays the same

Core CT rates remain:

0% on first AED 375,000 of taxable income
9% on taxable income above AED 375,000 (outside Pillar Two scope)
Free Zone 0% remains if QFZP conditions are met

Your 2025 Action Checklist

Assess Pillar Two scope, model DMTT, and prepare data pipelines.
Review Free Zone activity mapping against MD 229/2025, verify substance, update intercompany pricing.
Lock in compliance calendar for returns, payments, and audits.
Confirm registration status, de-registration needs, and payment setups in EmaraTax.

Frequently Asked Questions (FAQs)

Does DMTT replace the 9% rate?

No, DMTT is a top-up to 15% only for in-scope MNEs; 0%/9% rules remain for others.

Are Free Zone benefits gone?

No, they remain if QFZP conditions are met under MD 229/2025.

What’s the filing deadline for Dec-year ends?

30 September 2025.

How We Can Help

With major updates like Pillar Two and new Free Zone regulations, navigating UAE Corporate Tax in 2025 requires expert guidance. At MP Elites Consulting, our tax specialists help businesses assess exposure, maintain qualifying status, and ensure full FTA compliance — from registration to reporting.