UAE corporate tax is a federal tax on business profits. Taxable income up to AED 375,000 is taxed at 0% and income above that at 9%. Almost every UAE company, mainland or free zone, must register with the Federal Tax Authority (FTA), file a return within nine months of its financial year end and keep its records for at least seven years. Businesses with revenue of AED 3 million or less can elect Small Business Relief for tax periods ending on or before 31 December 2029.
Corporate tax was introduced by Federal Decree-Law No. 47 of 2022 and applies to financial years starting on or after 1 June 2023. Most businesses have now filed at least one return. This guide covers the whole regime in one place: who pays, how much, how taxable income is worked out, the free zone rules, deadlines, penalties and the records you need to keep.
Corporate tax in the UAE at a glance
| Item | Rule |
|---|---|
| Standard rate | 0% up to AED 375,000 of taxable income, 9% above |
| Qualifying Free Zone Persons | 0% on qualifying income, 9% on other income |
| Large multinational groups | Top-up tax to the 15% global minimum (revenue of €750 million or more) |
| Small Business Relief | Revenue of AED 3 million or less, tax periods ending by 31 December 2029 |
| Registration | Within three months of incorporation for companies formed on or after 1 March 2024 |
| Late registration penalty | AED 10,000 |
| Return and payment | Within nine months of the end of the tax period |
| Record keeping | At least seven years |
| Withholding tax | 0% |
Who is subject to corporate tax?
The Ministry of Finance lists these taxable persons:
- UAE companies and other juridical persons incorporated in the UAE, or effectively managed and controlled here. This includes mainland LLCs and free zone companies.
- Individuals running a business in the UAE, but only once their business turnover exceeds AED 1 million in a calendar year. Below that, a sole trader or freelancer is outside corporate tax.
- Foreign companies with a permanent establishment in the UAE, such as a branch.
Free zone companies are in scope. A free zone company that meets the conditions to be a Qualifying Free Zone Person can pay 0% on its qualifying income, but it still has to register and file.
Some entities are exempt, such as government entities, qualifying public benefit entities and certain investment and pension funds. A typical trading or services business will not fall into any of these categories.
The 9% rate and the AED 375,000 threshold
Corporate tax is charged on taxable income, not revenue. The rates are:
| Taxable income | Rate |
|---|---|
| Up to AED 375,000 | 0% |
| Above AED 375,000 | 9% |
The AED 375,000 is a band, not an exemption limit. Every business gets the 0% rate on its first AED 375,000, and only the amount above it is taxed at 9%.
Example: a Dubai consultancy has taxable income of AED 600,000. The first AED 375,000 is taxed at 0%. The remaining AED 225,000 is taxed at 9%, so the tax due is AED 20,250.
A business with taxable income below AED 375,000 pays no tax, but it still has to register and file a return. You can estimate your own figure with our corporate tax calculator.
Large multinational groups with global revenue of €750 million or more in at least two of the four previous financial years are also subject to the UAE's Domestic Minimum Top-up Tax for financial years starting on or after 1 January 2025. It tops up their effective rate to the 15% global minimum. It does not affect SMEs.
How taxable income is calculated
The Ministry of Finance says the starting point is your accounting income, the net profit in your financial statements. That figure is then adjusted under the Corporate Tax Law. The adjustments that come up most often for SMEs are:
- Exempt income. Dividends from UAE companies are exempt. Dividends and gains from a "participating interest" are also exempt where you hold at least 5% of the company for at least 12 months and the other conditions in Article 23 are met.
- Entertainment. Only 50% of client entertainment, amusement and recreation costs is deductible.
- Interest. Net interest expense is deductible up to 30% of EBITDA. A de minimis amount set by Cabinet Decision means most SMEs are not affected.
- Expenses not for the business. Costs not incurred wholly and exclusively for the business, fines and penalties, and bribes are not deductible.
- Tax losses. A tax loss can be carried forward and set against future taxable income, but it can only reduce taxable income in a later period by up to 75%.
- Related parties. Transactions with related parties and connected persons, such as owners and their family businesses, must be priced at arm's length.
Because the return starts from your financial statements, clean monthly books matter more than the return itself. Errors in categorisation flow straight into your tax figure.
Small Business Relief, extended to 2029
Small Business Relief lets a resident business with revenue of AED 3 million or less elect to be treated as having no taxable income for a tax period. In August 2026 the Ministry of Finance extended it from tax periods ending on or before 31 December 2026 to tax periods ending on or before 31 December 2029.
- The test is revenue, not profit. Revenue must be AED 3 million or less in the current tax period and in every previous tax period.
- Qualifying Free Zone Persons cannot elect it, and neither can members of large multinational groups.
- You elect it in your return. There is no separate application, and you still have to register and file.
- There is a cost. In a period where you elect the relief, tax losses cannot be carried forward.
Our article on Small Business Relief extended to 2029 works through an example of that trade-off.
Free zone companies
A free zone company can be a Qualifying Free Zone Person and pay 0% on qualifying income if it, among other conditions:
- keeps adequate substance in the free zone
- earns qualifying income from qualifying activities
- does not elect to be taxed at the standard rates
- complies with the transfer pricing rules
- prepares audited financial statements
Non-qualifying revenue must stay within the de minimis limit of 5% of total revenue or AED 5 million, whichever is lower. Breaking a condition means losing the 0% rate for the current period and the following four periods. Our guide to Qualifying Free Zone Person status covers the conditions in detail.
Registration deadlines and the AED 10,000 penalty
Every taxable person must register for corporate tax and get a Corporate Tax Registration Number, even if no tax will be due. The deadlines come from FTA Decision No. 3 of 2024:
- Companies incorporated on or after 1 March 2024: apply within three months of incorporation.
- Companies that existed before 1 March 2024: the deadlines ran through 2024 and have all passed, so an unregistered company should apply now.
- Individuals in business: apply by 31 March of the year after the year in which turnover first exceeded AED 1 million.
Missing the deadline triggers a fixed administrative penalty of AED 10,000, set by Cabinet Decision No. 10 of 2024. The FTA runs a waiver initiative: if you file your first return within seven months of the end of your first tax period, the penalty is waived or refunded. Check the current status on the FTA website. Our guide to the corporate tax penalty waiver explains how it works.
Registration is done on the FTA's EmaraTax portal. Our step-by-step registration guide walks through it, or our corporate tax registration service can handle it for you.
The filing deadline: nine months after your year end
You must file a corporate tax return, and pay any tax due, within nine months of the end of each tax period. Your tax period is normally your financial year.
| Financial year ends | Return and payment due |
|---|---|
| 31 December 2025 | 30 September 2026 |
| 31 March 2026 | 31 December 2026 |
| 30 June 2026 | 31 March 2027 |
| 31 December 2026 | 30 September 2027 |
Filing late and paying late each carry their own penalties, which build up month by month. If you have already missed a deadline, read what to do after a missed corporate tax deadline. For the filing process itself, see our complete corporate tax filing guide.
Who needs audited financial statements?
Under Ministerial Decision No. 84 of 2025, which applies to tax periods starting on or after 1 January 2025, two groups must prepare and keep audited financial statements:
- a taxable person, other than a Tax Group, with revenue above AED 50 million in the tax period
- every Qualifying Free Zone Person, whatever its revenue
Tax Groups whose consolidated revenue exceeds AED 50 million must also have their financial statements audited. Everyone else must still keep financial statements that support their return, and businesses with revenue up to AED 50 million may prepare them under IFRS for SMEs.
Tax Groups
Two or more UAE resident companies can form a Tax Group and file one return if the parent owns at least 95% of the share capital, voting rights and profit entitlement of each member, and all members share the same financial year. A Tax Group pays tax on combined profits, so intra-group transactions are generally eliminated. It also means all members are jointly liable for the group's tax.
What records you must keep
The FTA requires taxable persons to keep their records for at least seven years after the end of the tax period they relate to. That includes:
- financial statements for each tax period
- records of all transactions, such as sales and purchase invoices, receipts, contracts and bank statements
- records of assets, liabilities and shares held
- the workings behind your return, including any relief you elected
If you are VAT registered, make sure the figures in your VAT returns and your corporate tax return agree.
Need help with corporate tax?
TaxBox registers businesses for corporate tax, keeps their books current every month and prepares and files the annual return on EmaraTax, all for one fixed monthly fee. See our corporate tax filing service or compare our plans.
Frequently asked questions
What is the corporate tax rate in the UAE? 0% on taxable income up to AED 375,000 and 9% on taxable income above that. Qualifying Free Zone Persons pay 0% on qualifying income, and large multinational groups are topped up to a 15% minimum.
Who has to pay corporate tax in the UAE? UAE companies, mainland and free zone, foreign companies with a permanent establishment in the UAE, and individuals whose business turnover exceeds AED 1 million in a calendar year.
Do I need to register for corporate tax if my business makes no profit? Yes. Registration and filing are required whether or not any tax is due.
When is the UAE corporate tax filing deadline? Within nine months of the end of your tax period. For a financial year ending 31 December 2026, the deadline is 30 September 2027.
What is the penalty for late corporate tax registration? A fixed administrative penalty of AED 10,000. The FTA's waiver initiative cancels or refunds it if you file your first return within seven months of the end of your first tax period.
Do free zone companies pay corporate tax? They must register and file. A Qualifying Free Zone Person pays 0% on qualifying income and 9% on other income, and must keep audited financial statements.
Who needs audited financial statements for corporate tax? Businesses with revenue above AED 50 million in a tax period and every Qualifying Free Zone Person, under Ministerial Decision No. 84 of 2025.
Sources
- Ministry of Finance: Corporate Tax
- Ministry of Finance: Federal Decree-Law No. 47 of 2022 and its amendments
- Ministry of Finance: Top-up Tax
- Ministry of Finance: Small Business Relief extended until 31 December 2029
- Ministry of Finance: Ministerial Decision No. 84 of 2025 on Audited Financial Statements
- Ministry of Finance: Cabinet Decision No. 100 of 2023 on Qualifying Income
- Federal Tax Authority: Decision No. 3 of 2024 on the registration timeline
- Federal Tax Authority: Interest Deduction Limitation Rules guide
- Federal Tax Authority: Tax Groups guide
- Ministry of Finance: AED 10,000 penalty for late corporate tax registration
- Federal Tax Authority: Waiver of penalties
- Federal Tax Authority: Record retention requirements for corporate tax
This article is general information, not tax advice. Rules, dates and penalty amounts change, so check the Ministry of Finance and Federal Tax Authority before you act.