The Legal Basis — What the FTA Requires
The UAE Corporate Tax regime, introduced under Federal Decree-Law No. 47 of 2022, applies to all juridical persons registered or incorporated in the UAE, including mainland companies, free zone entities, and branch offices. Registration as a taxable person with the FTA creates an ongoing annual filing obligation.
Unlike some international jurisdictions that allow dormant companies to file simplified or abbreviated returns after a period of inactivity, UAE Corporate Tax law does not provide an automatic exemption from filing on grounds of zero activity. The obligation arises from registration, not from the existence of transactions.
Under Cabinet Decision No. 75 of 2023, the administrative penalty for late or non-filing is AED 500 per month for the first 12 months, and AED 1,000 per month thereafter. This applies even where no taxable income exists. A dormant company that misses the deadline faces exactly the same penalty as an active one.
When Is the Corporate Tax Return Due?
The Corporate Tax return must be filed within 9 months from the end of the relevant tax period. The tax period is typically the company's financial year. The table below shows the filing deadline based on common financial year-end dates:
| Financial Year End | First CT Period | Filing Deadline |
|---|---|---|
| 31 December 2024 | 1 Jan 2024 – 31 Dec 2024 | 30 September 2025 |
| 31 March 2025 | 1 Jan 2024 – 31 Mar 2025 | 31 December 2025 |
| 31 December 2025 | 1 Jan 2025 – 31 Dec 2025 | 30 September 2026 |
| 31 May 2025 | 1 Jun 2024 – 31 May 2025 | 28 February 2026 |
The first CT period for most UAE entities began on or after 1 June 2023 (the date the regime came into effect). If your company was incorporated after this date, your first filing obligation arises at the end of your first full financial year.
What Happens Step by Step
Small Business Relief — Your Zero-Tax Option
Small Business Relief (SBR) was introduced under Ministerial Decision No. 73 of 2023. It allows eligible taxable persons to elect to be treated as having no taxable income for a given tax period, resulting in a Corporate Tax liability of AED 0 — even if the company technically has some income.
Eligibility Conditions for SBR
- Revenue for the current tax period does not exceed AED 3 million
- Revenue for all prior tax periods from 1 June 2023 did not exceed AED 3 million
- The taxable person is not a Qualifying Free Zone Person already subject to 0% tax on qualifying income
- The taxable person is not a member of a Multinational Enterprise Group (annual consolidated revenue ≥ AED 3.15 billion)
If your company had zero revenue — whether dormant, newly incorporated, or simply inactive — it automatically meets the AED 3 million threshold. You can elect Small Business Relief and file a nil return with no Corporate Tax payable. Filing is still required; only the tax liability is nil.
File Your CT Return from AED 249
Fastlane handles end-to-end CT filing — nil returns, SBR elections, and full computations. FTA-registered Tax Agent, TRN 104218042400003.
Common Scenarios — What You Should Do
| Scenario | Filing Required? | Tax Payable? | Best Approach |
|---|---|---|---|
| Company incorporated, no transactions yet | Yes | No | Elect SBR, file nil return |
| Dormant company — no activity for full year | Yes | No | Elect SBR, file nil return |
| Revenue below AED 3 million | Yes | No (SBR) | Elect SBR, file nil return |
| Revenue above AED 3 million | Yes | Possibly | Full CT computation required |
| Free zone entity — qualifying income only | Yes | 0% on qualifying | File as Qualifying Free Zone Person |
| Company being wound up / liquidated | Yes (final) | Depends | File final CT return + apply CT deregistration |
Should You Deregister if the Company is Dormant?
If your company has permanently ceased all business activity and is undergoing formal liquidation, you should apply for Corporate Tax deregistration with the FTA after filing your final return. Deregistration ends your annual filing obligation going forward.
However, if your company is only temporarily inactive — for example, waiting to start a new project, or holding a trade licence without current activity — deregistration is generally not appropriate. The annual filing obligation remains, and you should continue to file nil returns (with SBR where eligible) until the company is formally dissolved.
For companies undergoing full wind-up, Fastlane provides both Liquidation Audit and Report services and CT Deregistration — covering the full closure process from financial statements to FTA sign-off.
What About VAT — Same Obligation?
Yes. If your company is VAT-registered, quarterly VAT returns must be filed even in periods with zero transactions. Submitting a nil VAT return is a formal requirement — missing it attracts a AED 1,000 penalty for the first offence, rising to AED 2,000 for each subsequent failure within 24 months.
If your company has permanently ceased trading and revenue is unlikely to meet the AED 375,000 voluntary registration threshold going forward, you should consider VAT deregistration alongside CT deregistration as part of a structured wind-down.
Do You Need Audited Accounts for a Nil CT Return?
The UAE Corporate Tax law requires taxable persons to maintain financial records sufficient to support the return. For companies electing Small Business Relief, the FTA has not mandated audited financial statements as a condition of SBR — management accounts prepared to an appropriate standard are generally sufficient.
However, many free zones — including IFZA, DMCC, JAFZA, and Meydan — require annual audited financial statements as a condition of licence renewal, regardless of whether the company was active. This means even a dormant free zone company will typically need an audit. Fastlane's accounting and compliance team can prepare both the financial statements and the CT return as a combined engagement.
Frequently Asked Questions
Yes. UAE Corporate Tax law requires every registered taxable person to file an annual return regardless of activity level. There is no dormancy exemption from the filing obligation. Failure to file is a penalty-triggering event even where no tax is owed.
The same deadline applies regardless of activity: 9 months from the end of your financial year. For a 31 December 2025 year end, the deadline is 30 September 2026.
Yes. Zero revenue means your revenue is well below the AED 3 million threshold, so you qualify for SBR provided you also meet the prior-period conditions and are not a Qualifying Free Zone Person or part of a large MNE group. SBR makes your taxable income nil — so tax payable is AED 0 — but you still need to file the return.
AED 500 per month for the first 12 months of late filing, and AED 1,000 per month from month 13 onwards. This applies even where there is no taxable income or tax payable.
Yes. Free zone entities registered as taxable persons must file annually. An inactive free zone company should file either as a Qualifying Free Zone Person (0% on qualifying income) or elect Small Business Relief for a nil return, depending on its circumstances.
Only if the company is being formally wound up and liquidated. A temporarily dormant or inactive company should continue to file nil returns annually. Deregistration is the correct step after the final CT return is filed as part of the company closure process.
Expert Review
FTA Registered Tax Agent — TRN 104218042400003
This content has been reviewed for technical accuracy against UAE Federal Decree-Law No. 47 of 2022, Ministerial Decision No. 73 of 2023 (Small Business Relief), and Cabinet Decision No. 75 of 2023 (Administrative Penalties). It reflects the law as in force for tax periods commencing on or after 1 June 2023. For advice specific to your entity's circumstances, contact Fastlane directly.