Corporate Tax Developments in the UAE and GCC
A practical look at how corporate tax is affecting UAE and GCC businesses in 2026 — the AED 375k threshold, small business relief, transfer pricing, and what the upcoming e-invoicing mandate means for corporate tax records.
Corporate tax in the UAE and wider GCC is no longer new. Businesses that filed for the first time in 2024 have a full year of compliance experience behind them, and the FTA is now seeing a broader base of taxpayers. Here is what the landscape looks like in 2026 and what it means for SMEs.
UAE Corporate Tax — the basics
The Federal Decree-Law No. 47 of 2022 introduced corporate tax at 9% on profits above AED 375,000. Small Business Relief (SBR) allows qualifying businesses to apply for a 0% rate up to the threshold. SBR must be claimed — it does not apply automatically.
The key filing requirement: businesses must file a corporate tax return within nine months of the end of the financial year. The return is separate from the VAT return. Proper bookkeeping — distinguishing accounting profit from taxable profit — is essential.
Transfer pricing — the new frontier for SMEs
Transfer pricing rules apply to related-party transactions. In the UAE, these rules require that transactions between related parties be conducted at arm's length. For most SMEs with straightforward transactions, this is not complex. But as businesses grow and have related-party loans, asset transfers, or service agreements, transfer pricing documentation becomes relevant.
The FTA has indicated that thin capitalisation rules (限制利息 deductibility on related-party loans) will apply, which can affect UAE holding structures.
GCC context
Saudi Arabia's CIT rate is 20% for joint stock companies. Bahrain has no corporate tax. Oman introduced a new corporate tax regime in 2024. Kuwait and Qatar are studying frameworks. For businesses operating across multiple GCC jurisdictions, the interaction of these regimes — and the withholding tax implications — requires dedicated advice.