What is FTA Corporate Tax? — Federal Tax Authority Corporate Tax Law
Direct Definition
FTA Corporate Tax is the federal corporate taxation regime enacted under Federal Decree-Law No. 47 of 2022 by the UAE Federal Tax Authority. It introduces a 9% headline tax rate on taxable business profits exceeding AED 375,000, while establishing clear qualifying income criteria for free zone persons. The UAE Corporate Tax regime aligns the nation with international OECD BEPS standards and Pillar Two global minimum tax principles. While offering targeted reliefs for small enterprises and qualifying free zone persons, the law mandates rigorous transfer pricing compliance, arm length intercompany agreements, and audited financial statements to verify taxable profit.
Statutory Authority & Legal Framework
UAE Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses.
Technical Architecture & Data Standards
Multi-book general ledger accounting, automated IFRS-to-Tax adjustments, transfer pricing calculation engines, arm's length transaction audit registries, and FTA EmaraTax tax return export formatters.
Who Must Comply
- All UAE incorporated entities including mainland LLCs, PJSCs, and commercial partnerships
- Free zone entities seeking Qualifying Free Zone Person (QFZP) status under applicable cabinet decisions
- Foreign corporate legal entities having a permanent establishment or place of effective management in the UAE
Key Regulatory Requirements
- Mandatory corporate tax registration through the FTA EmaraTax digital platform and acquisition of a Tax Registration Number
- Preparation of audited financial statements based on IFRS standards to establish taxable net profit
- Strict documentation of related-party transactions and adherence to statutory OECD Transfer Pricing guidelines
Enterprise Software & Integration Requirements
- Requires financial ERP software to maintain dual-ledger book accounting for financial net profit vs taxable adjusted income
- Demands automated tracking of non-deductible expenses including entertainment, fines, and interest capping limitations
- Enforces comprehensive transfer pricing documentation repositories linking intercompany cross-charges to arm's length benchmarks