Corporate Tax in the UAE: The Complete 2026 Guide

Corporate tax in the UAE is now a settled part of doing business here. Introduced by Federal Decree-Law No. 47 of 2022 and effective for financial years beginning on or after 1 June 2023, it applies a competitive 9% rate on business profits above AED 375,000, with a 0% band below that. Whether you run a mainland company, a free zone entity, or a business as an individual, the rules on who registers, how income is taxed, and when returns are due now affect you directly. This guide covers the whole picture end to end — and if you would rather hand it over, our team handles corporate tax filing and registration for businesses across every emirate. The core rates and thresholds below are stable, but always confirm figures and your own deadlines against the FTA before acting.

What is corporate tax in the UAE, and who has to pay it?

Corporate tax in the UAE is a federal tax on the net profit of businesses, charged at 0% up to AED 375,000 of taxable income and 9% above. It is governed by the Corporate Tax Law (Federal Decree-Law No. 47 of 2022) and administered by the Federal Tax Authority (FTA) through the EmaraTax portal.

You are a taxable person if you fall into one of these groups: a resident juridical person (a company or other entity incorporated in the UAE, including free zone companies); a foreign juridical person that is effectively managed and controlled in the UAE or has a permanent establishment or taxable nexus here; or a natural person conducting a business or business activity in the UAE with total turnover above AED 1 million in a calendar year. Employees are not taxed on their salaries, and individuals are not taxed on personal investment or real-estate income.

Your first tax period depends on your financial year. A company with a January–December year had its first corporate tax period in 2024; a business with a June–May year started from June 2023. Getting that start date right matters, because every deadline flows from it.

What are the corporate tax rates in the UAE?

The corporate tax rates in the UAE are simple on the surface: 0% on the first AED 375,000 of taxable income and 9% on everything above it. That threshold is designed to protect small businesses and start-ups, so only profits above AED 375,000 are actually taxed.

Two extra rates matter at the edges. A Qualifying Free Zone Person keeps 0% on qualifying income (more on that below), and a Domestic Minimum Top-up Tax (DMTT) of 15% applies to very large multinational groups — those with consolidated global revenue of at least EUR 750 million — for financial years starting on or after 1 January 2025. You can estimate your own liability with our UAE corporate tax calculator.

Who is exempt from corporate tax in the UAE?

Some persons are fully exempt from corporate tax in the UAE, while others simply fall outside its scope. Genuine exempt persons include government and government-controlled entities, extractive and non-extractive natural-resource businesses (taxed at emirate level instead), qualifying public benefit entities, qualifying investment funds, and certain pension and social security funds — each subject to conditions and, in most cases, notification or approval.

Outside the scope entirely are individuals earning only salary or personal investment income, because there is no personal income tax. A resident individual only enters the corporate tax net if their business turnover exceeds AED 1 million a year. It is worth being precise here: “exempt” and “0% rate” are not the same thing — a small company under AED 375,000 is taxable at 0%, not exempt, and it still has to register and file.

How do free zone companies pay corporate tax in the UAE?

Free zone companies are taxable persons under UAE corporate tax and must register — the old idea that a free zone licence means “no tax” is wrong. What a free zone can offer is the 0% rate on qualifying income, but only for a Qualifying Free Zone Person (QFZP) that meets every condition.

To be a QFZP, an entity must maintain adequate substance in the UAE, earn qualifying income, prepare audited financial statements under IFRS, comply with transfer pricing rules, and keep its non-qualifying revenue within the de minimis limit — the lower of AED 5 million or 5% of total revenue. Breach any condition, or elect out, and the entity is taxed at 9% like a mainland company. Income from UAE immovable property and certain other activities generally falls outside the 0% benefit.

What is Small Business Relief, and who qualifies?

Small Business Relief lets a resident person with revenue at or below AED 3 million in the relevant (and previous) tax periods elect to be treated as having no taxable income, so no corporate tax is payable. It is a genuine cash-flow and compliance easing aimed at smaller businesses.

The relief is elective — you claim it in your return, and you still have to register and file even though the tax is nil. It is currently available for tax periods ending on or before 31 December 2026. [VERIFY the current end date, as it may be extended by a further decision.] Note the threshold is based on revenue, not profit, and it is not available to Qualifying Free Zone Persons or to members of large multinational groups. If your revenue is close to the line, our Small Business Relief team can confirm whether electing is the right call.

How do you register for corporate tax in the UAE?

You register for corporate tax in the UAE through the FTA's EmaraTax portal, submitting your trade licence and ownership details to obtain a Corporate Tax Registration Number. The FTA set staggered registration deadlines based on licence-issuance month, and most of those deadlines have now passed — so if you are not yet registered, do it immediately to limit exposure to the AED 10,000 penalty.

1. Create an EmaraTax account — register or log in with your business credentials on the FTA portal.
2. Complete the registration form — enter trade licence, ownership and activity details and upload the required documents.
3. Get your Corporate Tax Registration Number — submit and receive your corporate tax TRN once approved.
4. Confirm your first tax period — identify your financial year so you know when your first return and payment are due.
5. Keep records and file — maintain IFRS-based records, compute taxable income, and file and pay within nine months of the period end.

When is the corporate tax return due in the UAE, and what are the penalties?

The corporate tax return in the UAE is due — and any tax must be paid — within nine months of the end of your tax period. A company with a December year-end (first period 2024) therefore had to file and pay by 30 September 2025; a June year-end business by the end of the following February. There is a single return per period; no provisional filing.

Corporate tax penalties are set by Cabinet Decision No. 75 of 2023 (as amended by Cabinet Decision No. 10 of 2024). Keep them separate in your mind from the VAT and Excise penalty regime under Cabinet Decision 129/2025 — different law, different amounts, different deadlines. Confirm the specific late-filing and late-payment figures against the current decision for your situation.

How is taxable income calculated for UAE corporate tax?

Taxable income starts from your accounting net profit — the profit in IFRS-based financial statements — which is then adjusted for specific corporate tax rules. You do not simply pay 9% of your bank balance; you pay it on adjusted taxable profit.

The main adjustments include: exempting qualifying dividends and participation income (so profits are not taxed twice); adding back non-deductible expenses such as administrative fines, and only 50% of entertainment costs; applying the interest deduction limitation, which caps net interest broadly at 30% of tax-EBITDA above a de minimis threshold of around AED 12 million [VERIFY the de minimis figure]; and respecting transfer pricing adjustments on related-party dealings. Reliefs such as Small Business Relief, tax-loss carry-forward and tax grouping then apply on top.

This is where clean bookkeeping pays off: the quality of your accounts drives the accuracy of your return. For the finer mechanics of relieving losses across a group, see our guide on group loss transfer and the 75% rule.

What about transfer pricing, tax groups, and large multinationals?

Three advanced areas complete the picture. Transfer pricing requires that transactions with related parties and connected persons are priced at arm's length; businesses above the relevant thresholds must keep a master file and local file and submit a disclosure with the return. Our transfer pricing team handles this documentation.

Tax groups let a UAE parent and its 95%-owned resident subsidiaries be treated as a single taxable person and file one consolidated return — useful for offsetting profits and losses within the group. Finally, the Domestic Minimum Top-up Tax (DMTT) implements the OECD Pillar Two rules: multinational groups with consolidated revenue of at least EUR 750 million face an effective 15% minimum, for financial years starting on or after 1 January 2025. Most UAE SMEs are unaffected, but large groups should model the impact — see our UAE DMTT and Pillar Two guide.

How much corporate tax will a UAE company actually pay?

Numbers make it concrete. Take a mainland LLC with AED 800,000 of taxable income for the year. The first AED 375,000 is taxed at 0%, and the remaining AED 425,000 at 9% — a total of AED 38,250.

Now change one fact: if that same company's revenue is AED 3 million or less, it could elect Small Business Relief and pay AED 0 for the period (while still filing). That single election is worth AED 38,250 here — which is exactly why checking your eligibility matters. Run your own figures in the corporate tax calculator, then have them reviewed before you file.

What do the key corporate tax terms mean?

A quick glossary of the terms used above, so nothing here is a black box: