UAE Corporate Tax uses legal and accounting language that can confuse founders, SMEs, and even experienced managers. Misunderstanding terms often leads to wrong assumptions, late actions, or compliance errors.
The Federal Tax Authority applies Corporate Tax rules based on definitions, not intent.
This glossary explains 100 essential Corporate Tax terms in simple, practical language—no jargon.
| # | Term | Plain English Meaning |
|---|---|---|
| 1 | Corporate Tax | Tax on business profits |
| 2 | Taxable Person | Anyone required to follow Corporate Tax rules |
| 3 | Tax Period | The financial year used for tax |
| 4 | Taxable Income | Profit after tax adjustments |
| 5 | Accounting Profit | Profit shown in accounts |
| 6 | Adjusted Profit | Accounting profit after tax rules |
| 7 | Tax Registration | Signing up with the FTA |
| 8 | Corporate Tax Return | Official tax filing |
| 9 | Tax Liability | Amount of tax payable |
| 10 | Nil Return | Return filed with zero tax |
| 11 | Tax Assessment | FTA’s review of your tax |
| 12 | Penalty | Fine for non-compliance |
| 13 | Interest | Charge on late tax payments |
| 14 | Filing Deadline | Last date to submit return |
| 15 | Late Filing | Missing the deadline |
| 16 | Tax Computation | How tax is calculated |
| 17 | Tax Adjustment | Change from accounting profit |
| 18 | Exempt Income | Income not taxed |
| 19 | Deductible Expense | Cost allowed to reduce tax |
| 20 | Non-Deductible Expense | Cost not allowed for tax |
| 21 | Tax Base | Income subject to tax |
| 22 | Tax Relief | Legal reduction of tax |
| 23 | Tax Incentive | Benefit to encourage behavior |
| 24 | Compliance | Following tax rules |
| 25 | Enforcement | FTA action against non-compliance |
| # | Term | Plain English Meaning |
|---|---|---|
| 26 | Legal Entity | Registered business body |
| 27 | Sole Establishment | One-owner business |
| 28 | Partnership | Business with multiple owners |
| 29 | Branch | Extension of a company |
| 30 | Holding Company | Company owning others |
| 31 | Group | Related companies |
| 32 | Tax Group | Group filing one return |
| 33 | Free Zone Entity | Company in Free Zone |
| 34 | Mainland Entity | Company outside Free Zone |
| 35 | Qualifying Free Zone Person | Free Zone company with tax benefits |
| 36 | Non-Qualifying Income | Income that breaks exemption |
| 37 | De-Minimis Rule | Small allowed limit |
| 38 | UAE Tax Resident | Based in UAE for tax |
| 39 | Permanent Establishment | Fixed business presence |
| 40 | Business Activity | Income-generating activity |
| 41 | Economic Substance | Real business operations |
| 42 | License | Permission to operate |
| 43 | Trade Name | Business name |
| 44 | Ownership Structure | Who owns the business |
| 45 | Control | Power to direct decisions |
| # | Term | Plain English Meaning |
|---|---|---|
| 46 | Revenue | Total income |
| 47 | Gross Income | Income before expenses |
| 48 | Net Profit | Income after expenses |
| 49 | Operating Expense | Day-to-day cost |
| 50 | Capital Expense | Long-term asset cost |
| 51 | Depreciation | Asset value reduction |
| 52 | Amortization | Spreading cost over time |
| 53 | Provision | Expected future cost |
| 54 | Accrual | Expense recorded before payment |
| 55 | Prepayment | Expense paid in advance |
| 56 | Bad Debt | Unpaid customer amount |
| 57 | Write-off | Removing uncollectible income |
| 58 | Entertainment Expense | Client hospitality cost |
| 59 | Motor Expense | Vehicle-related cost |
| 60 | Home Office Expense | Work-from-home cost |
| 61 | Salary | Employee pay |
| 62 | Director Remuneration | Pay to directors |
| 63 | Dividend | Profit paid to owners |
| 64 | Interest Expense | Cost of borrowing |
| 65 | Royalty | Payment for IP use |
| # | Term | Plain English Meaning |
|---|---|---|
| 66 | Related Party | Connected person/company |
| 67 | Arm’s Length | Market-based pricing |
| 68 | Transfer Pricing | Pricing between related parties |
| 69 | Management Fee | HQ or admin charge |
| 70 | Cost Allocation | Sharing group costs |
| 71 | Intercompany Agreement | Contract between group companies |
| 72 | Benchmarking | Market comparison |
| 73 | Comparable Transaction | Similar independent deal |
| 74 | TP Documentation | Proof of fair pricing |
| 75 | Master File | Group-level TP document |
| 76 | Local File | Entity-level TP document |
| 77 | Controlled Transaction | Related party transaction |
| 78 | Profit Shifting | Moving profit to lower tax |
| 79 | Substance Over Form | Reality over paperwork |
| 80 | Anti-Abuse Rule | Stops artificial tax planning |
| # | Term | Plain English Meaning |
|---|---|---|
| 81 | Audit | Detailed tax review |
| 82 | Risk Assessment | Likelihood of audit |
| 83 | Red Flag | Audit trigger |
| 84 | Disclosure | Required information |
| 85 | Voluntary Disclosure | Self-reporting an error |
| 86 | Reassessment | Revised tax calculation |
| 87 | Objection | Formal disagreement |
| 88 | Appeal | Escalated challenge |
| 89 | Compliance Risk | Chance of penalties |
| 90 | Record Keeping | Storing tax documents |
| 91 | Retention Period | How long records kept |
| 92 | Supporting Evidence | Proof for tax claims |
| 93 | Internal Controls | Processes to reduce error |
| 94 | Governance | Oversight structure |
| 95 | Tax Calendar | Compliance schedule |
| 96 | Tax Readiness | Preparedness level |
| 97 | Filing Platform | Online tax system |
| 98 | Tax Authority Notice | Official communication |
| 99 | Enforcement Action | Penalty or audit step |
| 100 | Tax Exposure | Potential tax risk |
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Understanding terms prevents wrong decisions before they happen.
For official definitions and legal wording, refer to UAE Corporate Tax resources published by the Federal Tax Authority:
https://tax.gov.ae/
