UAE Corporate Tax Revenue Soars to Dh46.5 Billion in 2025, Marking Significant Growth

The United Arab Emirates has witnessed a substantial increase in corporate tax revenues, which rose by nearly 34 per cent in 2025. This growth is attributed to improved timely compliance among taxpayers, according to the Federal Tax Authority (FTA). The authority successfully collected approximately Dh46.5 billion ($12.7 billion) in corporate tax for tax periods concluding in the 2025 financial year. This figure represents a significant jump from the Dh34.75 billion collected in the preceding year. Cumulatively, total revenues collected since the introduction of the corporate tax until the end of 2025 have reached Dh81.27 billion, as stated by the FTA in a release on Wednesday.

The federal corporate tax was implemented on June 1, 2023, becoming the most substantial tax levied after the UAE introduced a 5 per cent value added tax (VAT) in 2018. For the tax periods spanning January to August 2026, VAT revenue distributed to the UAE federal government and the respective governments of the seven emirates amounted to approximately Dh28.27 billion. Additionally, excise tax collected over the same period totaled Dh1.4 billion.

Abdulaziz Al Mulla, director general of the FTA, commented on the revenue growth, stating, "The growth in collected tax revenues, including the significant increase in corporate tax revenues, reflects the efficiency of the FTA’s operations and its ongoing efforts to develop its procedures and services." He further highlighted that the filing rate for corporate tax reached 91 per cent this year, an increase from 87 per cent in 2025, with an impressive on-time payment rate of 97 per cent. This indicates enhanced participation from taxpayers.

The FTA also reported positive trends in VAT and excise tax compliance. The timely filing rate for VAT returns stood at 83 per cent in 2026, up from 81 per cent the previous year, and its on-time payment rate improved to 98 per cent. For excise tax, the return filing rate reached 92 per cent in 2026, compared to 91 per cent in 2025, with an on-time payment rate of 98 per cent.

Mr. Al Mulla emphasized the FTA's commitment to raising tax awareness and strengthening engagement with taxable persons. "The authority continues to raise tax awareness, strengthen its engagement with taxable persons, and provide the information and guidance needed to fulfill their obligations," he said. "These efforts contribute significantly to enhancing their compliance with tax legislation and procedures and facilitate the timely filing of tax returns and payment of tax due.”

The introduction of corporate income tax in the UAE is viewed as a strategic move to broaden the revenue base of the Arab world's second-largest economy. Analysts suggest this initiative will support the country's long and short-term economic growth objectives. The move diversifies the UAE's taxation scope beyond VAT and customs duties, complementing government efforts to reduce reliance on oil revenues. Mr. Al Mulla added, "Tax compliance and taxable persons’ engagement with tax legislation and procedures have also improved significantly, supported by greater awareness and a stronger tax culture." He concluded by stating, "The FTA remains committed to maintaining regular communication with stakeholders in the tax sector to understand their views and suggestions, and to strengthen their contribution to the sustainable development of the tax system.”