Navigating UAE’s New Corporate Tax: Businesses Face Compliance Hurdles

UAE, 19 September, 2025: The rollout of Corporate Tax (CT) in the UAE has introduced fresh compliance challenges for companies, with experts noting recurring issues during return preparation and filing.

Key hurdles include misclassification of tax status, with confusion over whether entities qualify as Resident Persons, Non-Residents, or Qualifying Free Zone Persons — classifications that directly impact tax rates and exemptions. Businesses are also grappling with regulatory updates, accounting inconsistencies, and the complexities of transfer pricing compliance.

Incorrect applications of reliefs, such as Small Business Relief, Group Relief, and Participation Exemption, are another pain point, as strict conditions and deadlines apply.

Advisors stress that avoiding penalties requires more than timely filing. Strong tax governance, accurate financial records aligned with IFRS, and expert guidance are essential for ensuring compliance and optimising tax positions under the UAE’s new regime.