Project the tax and set aside a monthly provision.
Projected tax due
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Monthly provision
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Set aside for remaining months
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There are no quarterly instalments, so plan your own
Unlike many countries, the UAE does not ask businesses to pay corporate tax in quarterly chunks. You file one return and settle the whole bill within nine months of your financial year-end, a deadline set by the Federal Tax Authority. That sounds generous, and it is, but it hides a cash-flow trap: a company that spends as it earns can reach the filing date facing a tax bill it has not set aside for. This tool is a discipline device. It takes your projected annual tax, spreads it evenly across twelve months, and tells you how much to reserve for the months still left in the period so the eventual payment is money you already ringfenced.
How the tax itself is built
The federal corporate tax structure is a two-tier flat system. The first slice of taxable income is charged at zero, and everything above the threshold is taxed at a single rate. As modelled here, the zero-rate band is the first AED 375,000 and the rate above it is 9 percent. Those are the figures this calculator applies; the FTA is the authority to confirm the current threshold and rate against, since the regime is young and details still move. The structure, a generous zero band protecting smaller profits and a flat rate above, is the stable part worth understanding.
Note what this tool does not do. It ignores Small Business Relief, which can let a business under a revenue cap elect to be treated as having no taxable income, and it ignores free-zone treatment. If either applies to you, your actual tax could be far lower, so use a dedicated calculator for those elections.
Provisioning for a 600,000 dirham profit
Take a company projecting AED 600,000 of taxable income, halfway through its year with six months left. The rates this calculator applies give an annual tax of AED 20,250, a monthly provision of AED 1,688, and AED 10,125 still to set aside for the remaining half-year.
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The chart shows the provision building one month at a time toward the full AED 20,250 by year-end.
Treat the figure as a floor, not a forecast
A monthly provision works only if your profit projection is honest. The common mistake is to base the reserve on early-year profit and then under-provision after a strong second half. If your income is lumpy, recalculate the projection each quarter and top the reserve up. It also helps to hold the provision in a separate account so it is not accidentally spent. One more judgement call: this tool spreads the tax evenly for simplicity, but the FTA does not require any in-year payment at all, so the schedule is for your cash management, not a compliance obligation. The tool suits owner-managers, freelancers operating through a company, and finance leads who want to smooth a once-a-year liability.
When exactly is the corporate tax due?
The return and payment are due within nine months after the end of your tax period. A company with a financial year ending 31 December, for example, would file and pay by the end of the following September. There are no interim payment dates, but registering for corporate tax on time is a separate obligation with its own deadline, so confirm both with the FTA.
Does setting aside a provision reduce my tax?
No. Provisioning is purely a cash-flow exercise; it changes nothing about how much you owe. The tax is what it is on your taxable income. What lowers the bill is legitimate deductible expenditure, the zero-rate band, and reliefs like Small Business Relief if you qualify, not the act of reserving cash.