A general trading company in the UAE pays 9% Corporate Tax on taxable income above AED 375,000 and 0% below it — and if annual revenue is AED 3 million or less, Small Business Relief can reduce compliance further, now extended to tax periods ending on or before 31 December 2029. What catches trading businesses is rarely the rate: it is registration deadlines, the audit trigger, related-party purchase pricing and the seven-year record rule.
The rate and the relief
Federal Decree-Law No. 47 of 2022 sets the 0%/9% bands (Federal Decree-Law 47 of 2022, uaelegislation.gov.ae). Under the Small Business Relief amendment, a taxable person whose revenue does not exceed AED 3 million may elect for simplified relief for tax periods ending on or before 31 December 2029, per the 7 August 2026 extension decision (Ministry of Finance announcement).
Trading-specific deductions
Trading companies deduct the cost of goods sold and ordinary business expenses wholly and exclusively incurred. Entertainment spend — client meals and events — is deductible only at 50% under Article 32 of the Decree-Law. Where goods are bought from related parties, transfer pricing rules require arm's-length pricing; documented margins protect the deduction on review.
Deadlines that carry penalties
Registration: FTA Decision No. 3 of 2024 requires Corporate Tax registration within three months of licence issuance (earliest licence where there are several) for licences issued on or before 1 March 2024, and within three months of incorporation for new entities; late registration attracts an AED 10,000 administrative penalty (FTA registration timelines). The tax return and any payment are due within nine months of the end of the tax period.
Compliance map for a trading company
| Obligation | Trigger / deadline | Source |
|---|---|---|
| Register for Corporate Tax | Within 3 months of licence issuance or incorporation | FTA Decision 3 of 2024 |
| File return & pay tax | Within 9 months of FY end | Corporate Tax Law |
| Audited financial statements | Mandatory where revenue exceeds AED 50m | MD 82 of 2023, as amended (MD 84 of 2025) |
| Small Business Relief election | Revenue ≤ AED 3m; periods ending ≤ 31 Dec 2029 | MD 131 of 2026 amending MD 73 of 2023 |
| Keep records | 7 years after end of each tax period | CT Law Art. 56 |
| Entertainment costs | Deductible at 50% only | CT Law Art. 32 |
FAQ
What is the corporate tax rate for a general trading company in the UAE? 0% on taxable income up to AED 375,000 and 9% above it, regardless of mainland or free-zone location for non-qualifying income.
Does a trading company under AED 3 million revenue still need to register? Yes — registration is separate from relief. Register on time, then elect for Small Business Relief.
When must the first corporate tax return be filed? Within nine months of the end of the tax period, together with payment of any tax due.
Finanshels provides corporate tax registration and corporate tax filing for UAE trading companies — see also how to file a corporate tax return.
