UAE corporate tax is a federal tax on the profits of businesses, introduced by Federal Decree-Law No. 47 of 2022 and effective for financial years beginning on or after 1 June 2023. The rate is 0% on taxable income up to AED 375,000 and 9% above that. A separate 15% Domestic Minimum Top-up Tax applies to very large multinational groups. Nearly every UAE business must register and file a return, including companies that owe nothing.
The rates
| Who | Rate | On what |
|---|---|---|
| Any taxable person | 0% | Taxable income up to and including AED 375,000 |
| Any taxable person | 9% | Taxable income above AED 375,000 |
| Qualifying Free Zone Person | 0% / 9% | 0% on qualifying income; 9% on income that is not qualifying |
| Large multinational groups | 15% | Domestic Minimum Top-up Tax, where consolidated group revenue reaches EUR 750 million in at least two of the four preceding years |
The AED 375,000 threshold is a rate band, not an exemption. A company earning AED 500,000 pays 9% on AED 125,000, not on the whole amount. And it applies to taxable income, not revenue — a distinction that matters more than any other single point in this guide.
Who pays UAE corporate tax?
The law casts a wide net and then carves out. The starting assumption should be that you are in scope.
- UAE-incorporated companies — mainland LLCs, free zone companies, holding companies. All of them, including dormant ones.
- Foreign companies effectively managed and controlled in the UAE, or with a permanent establishment here.
- Natural persons carrying on business in the UAE where turnover from that business exceeds AED 1 million in a calendar year. This catches freelancers, consultants and sole establishments — not employment income, and not personal investment or real estate income held in a personal capacity.
- Branches of foreign companies operating here.
Employment salary is outside the scope entirely. There is still no UAE personal income tax on wages.
Who is genuinely outside it
A short list, and narrower than most people assume: government entities, certain government-controlled entities, businesses engaged in the extraction of natural resources, qualifying public benefit entities, qualifying investment funds and some pension and social security funds. Conditions apply to each, and several require an application or ongoing tests. See exempt persons under UAE corporate tax.
A free zone company is not an exempt person. It is a taxable person that may qualify for a 0% rate on qualifying income. The difference is that an exempt person is outside the system, while a free zone company is inside it and must register, file, and meet conditions to keep the 0%. Confusing the two is how businesses that owed no tax end up with a penalty.
What is actually taxed
Taxable income starts from the accounting profit in your financial statements, prepared under IFRS or IFRS for SMEs, and is then adjusted. It is not your revenue, and it is not the money in your bank.
| Common adjustment | Effect |
|---|---|
| Entertainment expenditure | Only partly deductible |
| Fines and penalties | Not deductible |
| Owner drawings recorded as expenses | Added back |
| Related party charges above arm’s length | Restricted — see transfer pricing |
| Interest expense | Subject to limitation rules |
| Exempt income, such as qualifying dividends | Deducted — see the participation exemption |
| Brought-forward tax losses | Offset, subject to carry-forward conditions |
The gap between accounting profit and taxable income is usually wider than expected, and almost always in the direction of more tax rather than less. The corporate tax calculator will give you the shape of it in a few minutes.
The reliefs worth knowing about
Small Business Relief. A business with revenue at or below AED 3 million in the current and all previous relevant tax periods can elect to be treated as having no taxable income. It is an election made in a return, not an automatic status — you still file. It is also time-limited — now running to tax periods ending on or before 31 December 2029 after Ministerial Decision No. 131 of 2026 extended it. The thing most likely to catch companies out is not the end date but the revenue test, because breaching AED 3 million loses the relief permanently.
The free zone 0% rate. Available to a Qualifying Free Zone Person on qualifying income, subject to conditions including adequate substance, qualifying activities, a de minimis test on non-qualifying revenue, and audited financial statements. It is claimed and substantiated, not assumed.
Tax groups. Related UAE companies meeting the ownership and other tests can form a single taxable person and file one return, offsetting profits and losses within the group.
Restructuring and transfer reliefs can defer tax on qualifying reorganisations and intra-group transfers.
What being in scope actually requires
- Register and obtain a corporate tax TRN through EmaraTax. Separate from any VAT registration you already hold.
- Keep accounting records capable of supporting the return, retained for the statutory period. See record retention.
- File a return within nine months of the end of each tax period — even a nil one.
- Pay by the same date. Filing and payment are not sequential; see how to pay.
- Disclose related party transactions where thresholds are met, via the related party disclosure form.
When it is due
Nine months after the end of your tax period. For a company with a 31 December year end, that means 30 September of the following year. Because the date follows your own financial year rather than a national date, two UAE companies can have deadlines months apart. Our corporate tax deadline guide maps the common year ends and explains what happens if you are late, and the first tax period guide covers how a new company’s first date is set.
Four things people get wrong
“We are in a free zone, so it does not apply.” It applies. The 0% rate might too, but only if you register, file, and meet every condition — including an audit.
“We made a loss, so there is nothing to file.” There is. Filing a loss is also how you preserve it for future offset.
“Our revenue is under AED 375,000, so we are exempt.” The threshold is on taxable income, and it sets a rate rather than an exemption from the system.
“We are VAT-registered, so we are covered.” Different tax, different registration, different number, different deadline.
Frequently asked questions
0% on taxable income up to and including AED 375,000 and 9% above that. A separate Domestic Minimum Top-up Tax of 15% applies to multinational groups with consolidated revenue of EUR 750 million or more in at least two of the four preceding financial years.
UAE-incorporated companies including free zone entities, foreign companies managed from the UAE or with a permanent establishment here, branches of foreign companies, and individuals carrying on business in the UAE with turnover above AED 1 million in a calendar year. Employment salary is outside the scope.
They are within the corporate tax system and must register and file. A Qualifying Free Zone Person can access a 0% rate on qualifying income, but that is conditional — it requires adequate substance, qualifying activities, staying within the de minimis test and audited financial statements.
On taxable income, which starts from accounting profit in the financial statements and is then adjusted — adding back non-deductible items such as fines and part of entertainment expenditure, and deducting exempt income and allowable losses. It is never charged on revenue.
Yes. Every taxable person files, including loss-making companies, dormant companies, companies electing Small Business Relief and free zone companies claiming 0%. Filing a loss is also how you preserve it for offset against future profits.
It applies to financial years beginning on or after 1 June 2023, under Federal Decree-Law No. 47 of 2022. For a company with a calendar year end, the first tax period was the year ended 31 December 2024.
Not on employment salary. Individuals are only brought into corporate tax where they carry on a business or business activity in the UAE and turnover from it exceeds AED 1 million in a calendar year. Personal investment and personal real estate income are generally outside it.
An election allowing a business with revenue at or below AED 3 million to be treated as having no taxable income for that period. It is claimed in a return rather than granted automatically, it comes with conditions, and it is time-limited — Ministerial Decision No. 131 of 2026 extended it to tax periods ending on or before 31 December 2029. Exceeding the AED 3 million revenue threshold loses it permanently, so the threshold matters more than the end date.
Not sure where your company sits?
A short call will establish whether you are registered correctly, what your first deadline is, and roughly what you are looking at.
Related reading: Deductible Expenses Under UAE Corporate Tax.
