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Corporate Tax UAE: SBR, Missteps & Pillar Two
Corporate Tax UAE applies to financial years starting on/after 1 June 2023. SMEs may elect Small Business Relief (AED 3,000,000), and larger groups should check Pillar Two DMTT 15% from FY 2025. Use this corporate tax checklist UAE to build a simple, defensible file.
Table of Contents: Corporate Tax UAE
- Who should read this
- Quick facts (UAE 2025)
- Search intent
- SBR: where SMEs slip
- What to keep in your CT file
- Pillar Two / DMTT: Who should care
- CT actions by company size
- Common missteps
- PAA FAQs
- Related reading
- E-E-A-T
What Readers Will Learn
- Corporate Tax UAE start-date rule and rate basics.
- How Small Business Relief (AED 3,000,000) works and common mistakes.
- When Pillar Two / DMTT 15% applies from FYs starting 2025.
- A size-based action table for quick planning.
Who should read this
- SME owners, finance heads, and group CFOs working on corporate tax UAE.
- Teams are preparing SBR election files and short TP notes.
- Leaders coordinating with LGA VAT & Tax / Advisory.
Quick facts (UAE 2025)
- CT applies for financial years starting on or after 1 June 2023.
- SBR is available up to AED 3,000,000 revenue (for periods ending on/before 31 Dec 2026).
- Pillar Two / DMTT 15% applies to large MNEs from FYs starting 1 Jan 2025.
Search intent
Build a simple, defensible CT file: get SBR right, keep evidence, and check Pillar Two scope early.
SBR: where SMEs slip
- Electing SBR after exceeding AED 3m in any period within the window.
- No working for revenue calculation and related-party flows.
- Treating SBR as permanent; it’s time-limited to periods ending 31 Dec 2026.
What to keep in your CT file
- COA → tax mapping (book-to-tax adjustments).
- SBR election memo (threshold test + workings).
- Related-party list + short TP policy note.
- Fixed-asset schedule + depreciation method.
- Exempt/relief claims with support.
Pillar Two / DMTT: Who should care
- If consolidated revenue is below €750m, DMTT doesn’t apply.
- If ≥ €750m, request group timeline, ETR estimates, and local data fields for 2025.
Table: CT actions by company size
| Company type | Do now | Evidence to keep |
| Micro (≤ AED 3m) | Test SBR; elect if eligible | Revenue working, election memo |
| SME (growing) | Map COA→tax; prep TP note; model 9% | Mapping sheet, TP memo, FA schedule |
| Free-zone | Review the qualifying income and substance | QI analysis, substance evidence |
| Part of MNE (≥ €750m) | Request Pillar Two plan; data fields | GloBE inputs, DMTT assessment |
Common missteps
- Assuming 0% up to AED 375k solves everything without book-to-tax adjustments.
- No TP memo for related-party services.
- Missing the FY start date rule and filing calendars.
Corporate Tax UAE FAQs
When did Corporate Tax start in the UAE?
For FYs starting on/after 1 June 2023.
Who can use Small Business Relief?
Residents with ≤ AED 3,000,000 revenue through periods ending 31 Dec 2026.
Does DMTT 15% apply to my SME?
Only if your consolidated group is ≥ €750m revenue.
Do SMEs still need TP notes?
Yes, if related-party transactions exist.
Related reading
E-E-A-T
Reviewed by: LGA Registered Tax Agent and Advisory team.
Scope: Corporate Tax, SBR, TP, Pillar Two readiness.
Contact: LGA Auditing — Dubai