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Businesses operating in a Free Zone should therefore assess their specific activities and circumstances instead of assuming that all Free Zone income receives identical tax treatment.

Transfer Pricing Considerations

Transfer pricing is another important area for businesses that conduct transactions with related parties or connected persons.

The FTA confirms that UAE transfer pricing rules can apply to transactions involving Related Parties and Connected Persons, including transactions between entities in the UAE and parties located in other jurisdictions.

Businesses may therefore need to review related-party arrangements and ensure that applicable documentation and compliance requirements are addressed.

Professional tax advisory can help companies understand how their intercompany transactions may interact with UAE Corporate Tax rules.

Small Business Relief

Eligible businesses may also need to consider whether Small Business Relief is available.

The FTA states that qualifying Resident Persons may elect for Small Business Relief where the applicable revenue conditions are satisfied. The FTA currently identifies a revenue threshold of AED 3 million for the relevant Tax Period and all previous Tax Periods ending on or before 31 December 2026, subject to the applicable conditions.

Eligibility includes additional conditions and exclusions, so businesses should assess the current rules before making an election.

Maintaining Proper Tax Records

Good tax planning depends on reliable documentation. Businesses should maintain financial and supporting records that allow their tax position to be properly determined and supported.