Corporate tax in the UAE is a 0% / 9% federal tax on business profit under Federal Decree-Law No. 47 of 2022 — 0% up to AED 375,000, 9% above. Every taxable person registers on EmaraTax and files within nine months of year-end. Eligible businesses under AED 3,000,000 revenue can elect Small Business Relief for tax periods ending on or before 31 December 2029, but only if they elect it every eligible year.
Key Takeaways
4 insights · 14 min readSmall Business Relief now runs to tax periods ending 31 December 2029 — eligible resident businesses with revenue up to AED 3,000,000 can be treated as having no taxable income.
The relief is an election on the return, not automatic. Skip it in an eligible year and you cannot claim it in future tax periods either — it is use-it-or-lose-it.
Rate is 0% up to AED 375,000, then 9%. Every taxable person registers and files within 9 months of year-end — even at zero tax.
Late registration is a fixed AED 10,000 penalty; late payment runs at 14% per annum, charged monthly, under the corporate tax penalty regime.
In this guide
Who pays corporate tax How to register Deadlines for 2026 Penalties in AED Small Business Relief to 2029 A worked AED example Free zone 0% rate Key terms Mistakes to avoidCorporate tax in the UAE is a federal tax on business profits introduced under Federal Decree-Law No. 47 of 2022, effective for financial years starting on or after 1 June 2023. The rate is 0% on taxable income up to AED 375,000 and 9% above it. Every taxable person — mainland, free zone or a qualifying individual — must register on EmaraTax and file a return within nine months of their financial year-end, even at zero tax. This 2026 guide covers who pays, the deadlines, the penalties in AED, and how to file cleanly — and it flags the change most small businesses need to act on this year: Small Business Relief now runs to tax periods ending 31 December 2029, but only if you elect it every eligible year. For done-for-you compliance, see our corporate tax filing service.
What is corporate tax in the UAE and who pays it?
Corporate tax in the UAE is a direct federal tax on the net profit of businesses, charged at 0% on taxable income up to AED 375,000 and 9% above it. It was introduced under Federal Decree-Law No. 47 of 2022 and applies to financial years starting on or after 1 June 2023, administered by the Federal Tax Authority (FTA) through the EmaraTax portal. The AED 375,000 is not a separate allowance sitting outside your return — it is a 0% band inside the same calculation, so you still file and declare all income.
Every resident juridical person — LLCs, free zone companies and branches — must register regardless of revenue. Free zone companies remain firmly in scope: the 0% rate is available only to a Qualifying Free Zone Person on qualifying income, and it is claimed on the annual return, not by skipping registration. Non-residents with a UAE permanent establishment and qualifying individuals are also taxable persons. For the return itself, our corporate tax filing service handles computation and on-time EmaraTax submission end to end.
Expert Tip — individuals
A natural person — freelancer, sole proprietor or individual partner — enters corporate tax only when UAE business turnover exceeds AED 1,000,000 in a calendar year (Cabinet Decision No. 49 of 2023). The test is gross turnover, not profit. Salary and personal investment income are excluded, and there is no personal income tax in the UAE.
How do you register for corporate tax step by step?
Registration is done on EmaraTax and typically takes 30–60 minutes with documents ready; the Corporate Tax Registration Number usually follows in 5–20 business days. The single most common and costly mistake is confusing the registration deadline with the filing deadline — they are separate obligations with separate penalties.
- Log in to EmaraTax — create or access your account on the FTA portal.
- Open the taxable-person profile — select corporate tax registration.
- Upload documents — trade licence, plus the Emirates ID and passport of the authorised signatory and the MOA.
- Enter entity details — business, ownership and contact details, listing all licences and branches under the one legal entity.
- Submit and await your TRN — your Corporate Tax Registration Number is issued once the application is approved.
- Diarise your filing deadline — nine months after your financial year-end.
⚠️ Registration deadlines are separate from filing
Companies incorporated from 2025 onward must register within 3 months of incorporation. Natural persons over the AED 1,000,000 turnover mark must register by 31 March of the following year. Missing the deadline is a fixed AED 10,000 penalty — even if no tax is owed. Register from AED 199 →
What are the corporate tax deadlines for 2026?
There is no single UAE-wide filing date — your deadline is nine months after your own financial year-end, and both the return and the payment fall due on that same date. A 31 December 2025 year-end means the return and the tax are both due by 30 September 2026.
| Obligation | Deadline | Example (31 Dec 2025 year-end) |
|---|---|---|
| Register (new company) | Within 3 months of incorporation | — |
| Register (natural person > AED 1M) | By 31 March of following year | 31 March 2026 (for 2025 turnover) |
| File the return | 9 months after year-end | 30 September 2026 |
| Pay any tax due | Same as the filing deadline | 30 September 2026 |
The FTA does not grant routine extensions and there is no grace period — penalties begin the day after the deadline. Because filing and payment are a single obligation, you cannot file without paying or pay without filing. File early: last-minute bank transfers may not clear in time and can themselves trigger a late-payment penalty. You can size the tax before you file with the UAE corporate tax calculator.
What are the corporate tax penalties in the UAE?
Corporate tax penalties run in parallel — a business that registered, filed and paid late accumulates all three at once, and they are not capped at a single maximum. The corporate tax penalty framework sits under Cabinet Decision No. 75 of 2023, as amended by Cabinet Decision No. 10 of 2024. This is a separate authority from VAT and excise penalties, which sit under Cabinet Decision No. 129 of 2025 — the two regimes should not be conflated.
| Breach | Penalty |
|---|---|
| Late registration | AED 10,000 (fixed) |
| Late filing of the return | AED 500/month for the first 12 months, then AED 1,000/month [VERIFY] |
| Late payment of tax due | 14% per annum on unpaid tax, charged monthly, no cap [VERIFY] |
| Voluntary disclosure of errors | Proportional — materially cheaper than an audit-triggered penalty |
There is a route back from the fixed penalty. A Cabinet-approved waiver can remove or refund the AED 10,000 late-registration penalty where the first return (or annual declaration) is filed within seven months of the end of the first tax period — earlier than the usual nine months. If already paid, the FTA credits it back. The window is time-limited, so confirm current eligibility before relying on it. [VERIFY current window]
Registered late and hit with the AED 10,000 penalty?
Send us your registration date and first tax period and we will tell you whether you qualify to recover it.
How does Small Business Relief work — and why must you elect it every eligible year?
Small Business Relief lets an eligible resident business be treated as having no taxable income for a tax period, so no corporate tax is payable and a simplified return is filed. The scheme is available for tax periods ending on or before 31 December 2029, and the revenue ceiling is AED 3,000,000. It is set out in Ministerial Decision No. 73 of 2023, and for most small UAE businesses it is the single most valuable relief in the corporate tax system.
Here is the part that catches people out. Small Business Relief is not automatic. It is an election made in the corporate tax return for that specific tax period. And the election is not something you can turn off and on again at will: if you do not elect Small Business Relief for a tax year in which you were eligible, you cannot claim it for future tax periods either. One skipped return — because a founder assumed a zero-profit year did not matter, or because nobody filed at all — closes the door on the relief for the remaining years of the scheme.
| Condition | Requirement in 2026 |
|---|---|
| Scheme availability | Tax periods ending on or before 31 December 2029 |
| Revenue ceiling | AED 3,000,000 or less in the relevant tax period and in every previous tax period |
| Who qualifies | Resident Persons — juridical persons and resident natural persons carrying on business in the UAE |
| Who is excluded | Qualifying Free Zone Persons and members of a Multinational Enterprise Group |
| How it is claimed | By election in the corporate tax return for that tax period — never automatic |
| If you skip an eligible year | Relief is lost for that year and cannot be claimed in future years |
| Effect on losses | Tax losses and disallowed net interest from an SBR period cannot be carried forward |
| Still required | Corporate tax registration and an annual return — relief does not remove the filing duty |
✓ You elect Small Business Relief every eligible year
- Taxable income treated as nil — AED 0 corporate tax payable for the period
- Simplified return; no full taxable-income computation required
- Election preserved, so the relief stays open through to periods ending 31 Dec 2029
- Cash stays in the business during the years growth actually needs it
✗ You skip the election in one eligible year
- Full 9% corporate tax applies above AED 375,000 for that period
- The relief cannot be claimed in future tax periods — the loss is permanent
- Every remaining year to 2029 is now taxed under the standard regime
- No retrospective fix: a missed election is not something an amended return reliably rescues
⚠️ Treat every eligible tax year as use-it-or-lose-it
A company with AED 2,400,000 revenue and AED 600,000 profit pays AED 20,250 in corporate tax without the election and AED 0 with it. Skip the election once and you do not just lose that AED 20,250 — you lose the relief for every remaining year to 2029 as well. Check your Small Business Relief eligibility →
How much corporate tax will you pay? A worked AED example
Take a Dubai mainland trading LLC with AED 1,000,000 in taxable profit. The two-tier calculation works like this.
| Band | Amount | Rate | Tax |
|---|---|---|---|
| First slice | AED 375,000 | 0% | AED 0 |
| Remainder | AED 625,000 | 9% | AED 56,250 |
| Total | AED 1,000,000 | — | AED 56,250 |
If that same business had revenue under AED 3,000,000 and elected Small Business Relief, its taxable income would be treated as zero for the period — AED 0 tax — though it must still register and file. Because the relief is an annual election that is lost for good if skipped, the practical rule for any business under the ceiling is simple: file, and elect, every single eligible year through to 2029. Keep the reconciled books that make the return defensible with monthly accounting and bookkeeping.
Do free zone companies still get 0% corporate tax?
Yes — but it is conditional, not automatic. A free zone company must qualify as a Qualifying Free Zone Person every year to keep the 0% rate on qualifying income; otherwise it pays 9% on all income. Qualifying income includes transactions with other free zone persons and a defined list of qualifying activities under the relevant Ministerial and Cabinet Decisions.
- Adequate substance in the free zone — real office, staff and genuine activity.
- Qualifying income only — mainland-customer income is generally non-qualifying.
- De minimis test — non-qualifying revenue must stay under the lower of AED 5,000,000 or 5% of total revenue. Breach it once and QFZP status is lost for that year and the next four.
- Audited financial statements are mandatory for a QFZP claim.
⚠️ A QFZP cannot also elect Small Business Relief
A Qualifying Free Zone Person is excluded from Small Business Relief, and so is a member of a Multinational Enterprise Group. If your free zone company is not claiming the 0% qualifying regime and is simply a resident taxable person under the 9% rules, SBR may be open to it — but you cannot hold both positions at once. Audited financials are also required where revenue is at or above AED 50,000,000 and for every QFZP claim. Book your free zone audit →
If you are weighing a free zone position against a clean mainland setup, compare the licensing options with the free zone comparison tool and read the wider corporate tax guide for UAE businesses. Related-party dealings also bring transfer pricing obligations into play once your disclosure or documentation thresholds are met.
What key corporate tax terms should you know?
| Term | What it means |
|---|---|
| Taxable person | Any person within the scope of UAE corporate tax — resident juridical persons, non-residents with a permanent establishment, and qualifying resident natural persons. |
| SBR | Small Business Relief — an election treating taxable income as nil where revenue is AED 3,000,000 or less, for tax periods ending on or before 31 December 2029. |
| QFZP | Qualifying Free Zone Person — a free zone company meeting all conditions for the 0% rate on qualifying income. |
| De minimis | The cap on non-qualifying revenue for a QFZP: the lower of AED 5,000,000 or 5% of total revenue. |
| TRN | Tax Registration Number — issued by the FTA on corporate tax or VAT registration. |
| EmaraTax | The FTA’s online portal for registration, returns, payments, refunds and voluntary disclosures. |
| Tax period | The financial year (or part year) for which a corporate tax return is filed. |
| Voluntary disclosure | A correction of an error in a filed return; under the current framework the penalty is proportional and cheaper than an audit finding. |
What corporate tax mistakes do businesses make?
Most expensive corporate tax errors are procedural, not commercial. These are the five we see repeatedly.
The five costliest corporate tax mistakes
• Confusing registration with filing — two separate deadlines, two separate penalty regimes, and an AED 10,000 penalty for getting the first one wrong.
• Assuming free zone means exempt — every free zone entity must register and file, even a QFZP taxed at 0%.
• Skipping the Small Business Relief election — not electing it on the return in an eligible year, and permanently losing the relief for every remaining year to 2029.
• Filing without paying on the same date — both are due together, and a late transfer triggers the 14%-per-annum charge.
• Filing off a shoebox of invoices — clean, reconciled books are the foundation of an accurate, defensible return.
All five are cheap to avoid and expensive to unwind. If you are unsure where you stand — whether you registered on time, whether last year’s SBR election was actually made, or whether your free zone claim holds — a short review of your filings will settle it. Keep VAT and corporate tax aligned too, because the FTA cross-checks your VAT returns against your corporate tax declarations, and if you need to prove UAE tax residence abroad that runs through a tax residency certificate, not your trade licence.
Fastlane Tax Team
FTA-registered tax agents and MoE-approved auditors filing corporate tax and VAT returns across the UAE mainland and 40+ free zones. Every guide is checked against current FTA and Ministry of Finance rules before publishing.
Ask the team a question