UAE Corporate Tax 2026: Key Updates for Foreign-Owned Trading Houses in Dubai Freezones
Key Insight (TL;DR)
"UAE corporate tax applies to profits over 375,000 AED. Freezone trading houses must satisfy strict Qualifying Free Zone Person rules and transfer pricing guidelines to retain 0% tax."
The United Arab Emirates is no longer a tax-free haven. The implementation of the federal corporate tax has fundamentally changed the financial structure of trading houses operating out of Dubai.
The 9% Corporate Tax Framework
The tax is levied on net corporate profits exceeding 375,000 AED (approx. $102,000) annually. All UAE-incorporated entities, including Free Zone companies, must register with the tax authorities and file tax returns.
Retaining 0% Tax for Free Zone Entities
Free Zone entities can still leverage a 0% tax rate on "Qualifying Income." To qualify, companies must: * Maintain adequate physical substance (office space, local employees) in the UAE. * Deal exclusively with other Free Zone entities or international markets. * Submit annual audited financial statements.
Transfer Pricing Compliance
Pricing for transactions between related entities (e.g., a Russian parent company and its Dubai subsidiary) must comply with arm's length principles. Onex helps optimize invoicing models to comply with international standards.
References & External Insights
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