Since the UAE rolled out its corporate tax law, many businesses—especially SMEs and free zone entities—are under the false impression that they’re automatically exempt. These misconceptions can result in non-compliance, penalties, and strategic missteps.
One popular myth is that all free zone companies are tax-exempt. In reality, only those qualifying under specific FTA guidelines and earning “qualifying income” can benefit from the 0% rate. Another common mistake is assuming no registration is needed if income is below AED 375,000—wrong again. In most cases, registration is mandatory regardless of tax payable.
Here are some facts businesses should understand:
- Registration is compulsory, even if tax is not due
- Free zone companies must meet all criteria to qualify for exemption
- Passive income (e.g., interest, dividends) might still be taxed in certain cases
- Proper transfer pricing documentation is essential for related party transactions
Strategists Consultant helps businesses stay compliant by clarifying eligibility, managing registration, and setting up accurate financial systems.
Don’t fall for the myths. Let our expert team help you make informed, risk-free decisions under the UAE’s corporate tax regime.