UAE Corporate Tax in Action: 5 Practical Corporate Tax Case Studies in 2025
The UAE’s Corporate Tax rules now apply to financial years that start on or after 1 June 2023. As a result, businesses all over the country are making important changes to assess how they handle and report their finances. In this guide, we will share five real examples where Vertix Auditing acted as the corproate tax advisor and consultant. From our real experience and the official UAE tax law (Federal Decree-Law No. 47 of 2022), along with other government decisios in relation to corporate tax, we share simple as well as useful tips to help Free Zone, mainland, and international businesses understand and handle the new tax regime.
Quick Look at UAE Corporate Tax Rules
- Standard Rate: The standard corporate tax rate is 9%, but only on the part of the income that is more than AED 375,000.
- Free Zone Entities (QFZPs): 0% tax rate on qualifying income if the relevent conditions are met.
- Transfer Pricing: Businesses must follow the arm’s length rule and keep proper transfer pricing (TP) documents.
- Pillar Two (GloBE): Multinational companies with yearly revenue over €750 million will need to pay a 15% minimum tax starting from financial years that begin in January 2025.
- Returns and Penalties: Companies have 9 months after their financial year ends to submit their tax return.
Case Study 1: Free Zone Distributor Losing QFZP Status
Client: ABC Medical Devices FZ-LLC is a company based in Jebel Ali Free Zone. It is involved in selling and distributing medical equipment and made AED 12 million in revenue during the 2024 financial year.
Background: Vertix Auditing was hired to file corproate tax return of their mainland entity and to check whether their freezone company is in compliance and meets the requirements of a QFZP.
Issue Identified: In order to take advantage of the 0% tax rate, the company had ensure that its non-qualifying income does not exceed 5% of total revenue or AED 5m (whichever is higher). However, it went over the allowed limit for non-qualifying income and lost the QFZP status.
Outcome: Due to the company’s failure to meet the necessary requirements, it lost its QFZP status. It can no longer receive QFZP benefits for the next five years and is now subject to 9% corporate tax.
Key Lesson: We advised the company to actively monitor the sources of its income, transfer the non-qualifying income to their mainland entity, increase substance, and have a dedicated resource to monitor and ensure that the non-qualifying income does not exceed the minimum threshold.
Read Detailed Case Study: Free Zone Distributor Losing QFZP Status
Case Study 2: Ensuring Tax Compliance and Maintaining QFZP Status
Client: ABC Logistics FZCO is located in JAFZA and handles storage and re-export logistics. In the 2024 financial year, the company earned AED 8 million in revenue.
Background: Vertix Auditing was hired to help the company with its corporate tax planning, meeting the QFZP requirements, and preparing transfer pricing (TP) documents.
Approach: We helped the company change its customer base to work only with clients in Free Zones and outside the UAE. For mainland clients, use a mainlind business license. We also made sure it had proper business presence, like staff and office space, and prepared audited financial statements (as per IFRS) along with the required transfer pricing documents.
Outcome: The client is well aware about the requirements to maintain its QFZP status and importance of keeping adequate substance, proper books of accounts, and test every related party transaction based on arms length principals.
Key Lesson: A well-planned business setup that follows all the corporate tax requirements can help save a lot on taxes. Vertix still supports the client by checking their compliance every quarter.
Read Detailed Case Study: Ensuring Tax Compliance and Maintaining QFZP Status
Case Study 3: Mainland Business Avoiding Penalties via Early Compliance
Client: XYZ Tech LLC is based in Dubai Mainland and earned AED 4 million in revenue during the 2024 financial year.
Background: Vertix Auditing was hired after the client missed the deadline to register for corporate tax.
Solution: We provided the most suitable solution for the client by quickly registering for corporate tax, manually preparing the trial balance, general ledger, management accounts, and financial statements, and submitting the corporate tax return within the FTA’s grace period before 31 July 2025.
Outcome: By our timely action, the client was able to avoid the AED 10,000 fine.
Key Lesson: By understanding the problem quickly, Vertix helped the client get back on track with their tax compliance without facing any penalties.
Read Detailed Case Study: Mainland Business Avoids Corporate Tax Penalties
Case Study 4: Partnership Electing to Be Taxed as Entity
Client: ABC Consulting is an unregistered partnership run by 3 individuals. The business makes around AED 5 million each year.
Background: Vertix Auditing was hired to review how the partnership can elect for corproate tax as an Entity so that partners don’t have to file taxed individually.
Strategy: Following our advice, the client chose to be treated as a taxable person under the applicable rules of corporate tax law. We helped them through the election process and with their first tax filings.
Outcome: The client now has easier and straight forward tax filing, a better understanding of their tax situation, and easy to understand financial system.
Key Lesson: If you run a partnership business, complying with complex tax regulations can be a challenging task. From a compliance perspective, it is much easier and safer to register and elect for corporate tax an entity so that partners are not required to file taxes individually.
Read Detailed Case Study: Partnership Electing to Be Taxed as Entity
Case Study 5: MNE Prepares for Pillar Two Top-Up Tax
Client: AD Global Holdings is a multinational company with a global revenue of €900 million. Its UAE subsidiary operates in the Abu Dhabi Global Market (ADGM).
Background: Vertix Auditing was chosen to carry out a full review to check if the company is ready for the new Pillar Two tax rules.
Action Plan: We worked out the company’s global tax rate, checked how much lower the UAE tax rate was, adjusted how income was divided between group companies, and gave simple advice on how to optimize tax by using R&D and hiring-related incentives.
Outcome: The client set up internal processes to follow GloBE rules and was able to lower the amount of extra tax they might have had to pay.
Key Lesson: By planning early and making timely changes, multinational companies can avoid unexpected extra tax payments. Vertix now helps manage the client’s international tax matters.
Key Takeaways
The UAE’s new corporate tax rules bring both difficulties and chances to plan smartly. These real-life examples show how Vertix Auditing closely supports clients, not just to stay compliant, but to succeed under the new system. The Vertix Auditing is here to help you and make your business reliable because we have the correct experience with exceptional team.
This guide is based on UAE tax laws and official guidance as of July 2025.
