Do ADGM companies pay corporate tax?

Yes. ADGM companies are UAE tax residents and fall under Federal Decree-Law 47 of 2022. Standard rates are 0% on taxable income up to AED 375,000 and 9% above that. An ADGM company that meets the Qualifying Free Zone Person conditions can apply 0% to its qualifying income, but non-qualifying income is still taxed at 9%.

Is ADGM a Designated Zone for VAT?

No. ADGM is not on the list of VAT Designated Zones under Cabinet Decision 59 of 2017 and its amendments. Supplies of goods and services from ADGM follow the standard UAE VAT rules at 5%, with mandatory registration once taxable supplies exceed AED 375,000 in any 12 month period.

When does e-invoicing start for ADGM businesses?

ADGM businesses with revenue of AED 50 million or more must appoint an accredited service provider by October 30, 2026 and go live on January 1, 2027. Smaller businesses must comply from July 1, 2027. A voluntary pilot opens in Q2 2026. Government entities join on October 1, 2027.

How does QFZP status work in ADGM?

A Qualifying Free Zone Person pays 0% corporate tax on qualifying income such as certain financial services, fund management for regulated funds, holding activities and treasury services to related parties. The company needs UAE substance, audited accounts and transfer pricing documentation. Non-qualifying revenue must stay under 5% of total revenue or AED 5 million.

What records must an ADGM company keep?

Accounting records, invoices, contracts and supporting schedules must be kept for at least 7 years. Once e-invoicing starts, PINT AE invoices and ASP transmission logs are part of that record. Audited financial statements are required for QFZP status and for any ADGM company whose licence conditions or revenue triggers an audit obligation.

What are the penalties for missing e-invoicing rules?

Cabinet Decision 106 of 2025 sets penalties of AED 2,500 to AED 50,000 per violation. Issuing a non-compliant invoice, missing mandatory PINT AE fields, late transmission and weak record keeping all trigger fines. Corporate tax and VAT penalties apply on top under Federal Decree-Law 28 of 2022 on tax procedures.

Can ADGM SPVs claim small business relief?

An ADGM Special Purpose Vehicle with revenue up to AED 3 million can elect small business relief for tax periods ending on or before December 31, 2026. The SPV files a corporate tax return but is treated as having no taxable income. The election cannot be combined with QFZP status in the same period.

ADGM Tax Compliance: Rules, VAT and E-Invoicing

What is ADGM tax compliance?

ADGM tax compliance is the set of UAE tax rules a company licensed in Abu Dhabi Global Market (ADGM) must follow. It covers corporate tax under Federal Decree-Law 47 of 2022, value added tax (VAT) under Federal Decree-Law 8 of 2017, economic substance rules, and the new e-invoicing mandate from the Ministry of Finance (MoF).

ADGM is a financial free zone on Al Maryah Island in Abu Dhabi. It has its own commercial and civil laws based on English common law, but its companies are still UAE tax residents. That means the Federal Tax Authority (FTA) collects corporate tax and VAT from ADGM entities the same way it does from mainland firms, with one important exception: a Qualifying Free Zone Person (QFZP) can pay 0% corporate tax on qualifying income.

This guide explains what ADGM tax compliance means in practice in 2025 and 2026. For a wider view across the country, see the UAE Free Zones: Tax, Compliance and E-Invoicing hub.

Who must comply in ADGM?

Every company holding an ADGM commercial licence is a taxable person under UAE corporate tax law. That includes Special Purpose Vehicles (SPVs), foundations, holding companies, fund managers, fintech firms and professional services practices. Branches of foreign companies registered in ADGM are also in scope.

Compliance covers four areas:

Corporate tax registration and annual returns with the FTA.
VAT registration, returns and record keeping if turnover thresholds are met.
Economic substance and accounting record obligations under ADGM Registration Authority rules.
E-invoicing through an accredited service provider once the MoF mandate goes live.

ADGM versus other Abu Dhabi free zones

ADGM is the financial free zone for banking, asset management and fintech. Other Abu Dhabi zones such as KIZAD and Masdar City focus on industry and clean tech. The federal tax rules are the same for all of them, but ADGM's QFZP qualifying activities skew toward financial services. Read the parallel guides for DAFZA Tax Compliance and JAFZA Tax Compliance if you operate across emirates.

Corporate tax in ADGM

The UAE introduced federal corporate tax on June 1, 2023. The rates are:

0% on taxable income up to AED 375,000.
9% on taxable income above AED 375,000.
15% Domestic Minimum Top-up Tax (DMTT) for large multinationals with EUR 750 million or more in global revenue, from January 2025.

ADGM companies must register with the FTA, file an annual corporate tax return, and pay any tax due within 9 months of their financial year end. A company with a December year end must file and pay by September 30 of the following year.

Qualifying Free Zone Person status

An ADGM company that meets the QFZP conditions can apply 0% corporate tax to its qualifying income. The main conditions are:

Maintain adequate substance in the UAE, including staff, assets and expenditure.
Earn qualifying income, as defined in Ministerial Decision 265 of 2023, which includes certain financial services, fund management for regulated funds, holding of shares, and treasury services to related parties.
Meet de minimis rules: non-qualifying revenue must stay under 5% of total revenue or AED 5 million, whichever is lower.
Prepare audited financial statements.
Comply with transfer pricing rules.

Income that does not qualify is taxed at the standard 9% rate. Losing QFZP status in one year forfeits the 0% rate for that year and the following four years, so the test is taken seriously.

Small business relief

ADGM companies with annual revenue up to AED 3 million can elect small business relief through tax periods ending on or before December 31, 2026. The company is then treated as having no taxable income for that period, but it still files a return.

VAT in ADGM

VAT has been 5% across the UAE since January 1, 2018. ADGM is not a Designated Zone for VAT, so supplies of goods and services from ADGM follow normal VAT rules.

Registration thresholds for taxable supplies of goods and services:

Threshold	Amount	Action
Mandatory registration	AED 375,000	Register with the FTA within 30 days of exceeding the threshold
Voluntary registration	AED 187,500	Optional registration available
Deregistration	Below AED 187,500 for 12 months	Apply to deregister

VAT returns are filed quarterly or monthly, depending on the size of the business. The return and payment are due within 28 days of the end of the tax period. Many ADGM financial services are VAT exempt, while others such as fund management to regulated funds can be zero rated. Mixed supplies make input VAT recovery complex, so apportionment is common.

E-invoicing rules for ADGM companies

The UAE is rolling out a national e-invoicing mandate based on the Peppol 5-corner DCTCE (Decentralized Continuous Transaction Control and Exchange) model. Invoices are exchanged in PINT AE format through accredited service providers (ASPs) appointed by the Ministry of Finance. The FTA receives a copy of each invoice in near real time.

The legal basis sits in Federal Decree-Law 16 of 2024 (the VAT amendment) and Federal Decree-Law 17 of 2024 (tax procedures), with Ministerial Decisions 243 and 244 of 2025 setting the technical detail.

ADGM e-invoicing timeline

Milestone	Date	Who
Pilot phase	Q2 2026	Voluntary participants
ASP appointment deadline, Phase 1	October 30, 2026	Businesses with AED 50 million+ revenue
Phase 1 mandatory go-live	January 1, 2027	Businesses with AED 50 million+ revenue
SME go-live	July 1, 2027	Businesses under AED 50 million
Government entities	October 1, 2027	UAE government bodies

ADGM businesses must appoint an ASP from the Ministry of Finance's published ASP list and connect their accounting or ERP system to that ASP. Both business to business (B2B) and business to government (B2G) invoices are in scope.

Penalties for non-compliance

Cabinet Decision 106 of 2025 sets administrative penalties between AED 2,500 and AED 50,000 per violation for e-invoicing breaches. Examples include failing to issue a compliant e-invoice, missing data fields, and not retaining records. VAT and corporate tax penalties also apply separately under existing tax procedures law.

Economic substance and records

ADGM companies must keep accounting records for at least 7 years. Companies carrying out relevant activities, such as fund management, finance and leasing, holding company business, headquarters and intellectual property, were subject to economic substance reporting under Cabinet Decision 57 of 2020. The reporting requirement was repealed for financial years starting on or after January 1, 2023, because corporate tax now embeds a substance test through QFZP rules. The substance itself, real staff and activity in the UAE, still matters for QFZP status.

Transfer pricing

UAE transfer pricing rules apply to ADGM companies. Transactions with related parties must follow the arm's length principle. Companies above set thresholds must file a disclosure form with the corporate tax return and keep a Master File and Local File if their revenue or group revenue crosses the thresholds in Ministerial Decision 97 of 2023.

ADGM tax compliance checklist

Register with the FTA for corporate tax and obtain a Tax Registration Number (TRN).
Decide whether to claim QFZP status, and document qualifying activities and substance.
Register for VAT if taxable supplies exceed AED 375,000, or voluntarily above AED 187,500.
Set the financial year and book audited statements with an ADGM approved auditor.
Prepare transfer pricing documentation for related party transactions.
Choose an accredited ASP before October 30, 2026 if revenue is AED 50 million or above.
Map your invoice data to PINT AE fields, including supplier and buyer TRN.
File VAT returns within 28 days of period end, and the corporate tax return within 9 months of year end.
Retain accounting and invoice records for 7 years.

Connecting your systems

Most ADGM finance teams already use cloud accounting or ERP software. E-invoicing under DCTCE adds a sending and receiving layer on top. Common stacks include Zoho Books, QuickBooks, Xero, Tally, Sage, Odoo, Microsoft Dynamics 365, Microsoft Business Central, SAP and Oracle NetSuite. Each needs to connect to an accredited ASP that can sign, validate and transmit invoices in PINT AE format through the Peppol network.

For comparisons with other zones, see DMCC Tax Compliance, DIFC Tax Compliance and IFZA Tax Compliance. The wider UAE Free Zones hub brings them together.

Official sources

Always confirm the latest rules with the regulators:

EInvoice Direct is UAE e-invoicing software built for ADGM and other free zone companies, with an accredited service provider included at no extra charge. To plan your Phase 1 readiness, get UAE e-invoicing pricing.

This content is informational and does not constitute tax, legal, or financial advice. Consult an FTA-registered tax agent or a licensed UAE audit firm before acting on this information.

ADGM tax compliance: a plain English guide for UAE businesses