By 
- 0% on taxable profit up to AED 375,000, and 9% above it.
- Qualifying free zone companies can pay 0% on qualifying income if they meet the conditions.
- Small Business Relief can apply to revenue up to AED 3 million for tax periods ending by 31 December 2026.
- Register and file on time even if you expect to pay nothing, to avoid penalties.
This guide is general information, not tax advice. Rules can change, so check your position with a tax adviser.
What is UAE corporate tax?
Corporate tax is a federal tax on business profits. It applies to financial years starting on or after 1 June 2023 and is administered by the Federal Tax Authority (FTA).
The rates
| Tax treatment | Rate |
|---|---|
| Ordinary regime: taxable income up to AED 375,000 | 0% |
| Ordinary regime: taxable income above AED 375,000 | 9% |
| Qualifying Free Zone Person: qualifying income | 0% |
| Qualifying Free Zone Person: non-qualifying taxable income | 9%, without the AED 375,000 zero-rate band |
Very large multinational groups can be subject to a separate minimum top-up tax, but that doesn’t affect most small and medium businesses.
Who must register?
UAE resident companies, including free zone companies, generally must register for corporate tax even when no tax is payable. Exempt-person exceptions and other special rules need to be checked separately. Individuals running a business can also fall within scope once their business turnover passes AED 1 million a year. The FTA sets registration deadlines, which can depend on when your license was issued.
Free zone companies and the 0% rate
A free zone company can be a Qualifying Free Zone Person and pay 0% on qualifying income if it meets conditions, including:
- having adequate substance in the free zone,
- earning qualifying income from qualifying activities,
- keeping audited financial statements, and
- following transfer pricing rules.
A Qualifying Free Zone Person pays 9% on non-qualifying taxable income without the AED 375,000 zero-rate band. Failing the qualifying conditions can also change the company’s treatment. Review each income stream and the de minimis rules with a tax adviser.
Small Business Relief
Eligible resident businesses whose revenue does not exceed AED 3 million in the relevant and all previous tax periods can elect for Small Business Relief, which treats them as having no taxable income for that period. It currently applies to tax periods ending on or before 31 December 2026. It isn’t available to Qualifying Free Zone Persons or members of large multinational groups.
Filing and paying
Corporate tax returns, and any tax due, are generally due within nine months of the end of your tax period. Keep proper accounting records, usually for at least seven years.
Corporate tax and VAT
VAT is separate from corporate tax. The standard rate is 5%. For UAE-resident businesses, mandatory registration generally applies when taxable supplies and imports exceed AED 375,000 in the previous 12 months or are expected to exceed it in the next 30 days. Voluntary registration starts at AED 187,500, subject to conditions; non-resident rules differ.
Our accounting, VAT and corporate tax service keeps your books, registrations and returns on track.
