By Kompani Setup advisers · Updated 15 October 2026
- 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
| Taxable profit | Rate |
|---|---|
| Up to AED 375,000 | 0% |
| Above AED 375,000 | 9% |
| Qualifying income of a Qualifying Free Zone Person | 0% |
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?
All UAE companies, including free zone companies, must register for corporate tax, even if they expect to pay nothing. 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.
Non-qualifying income is taxed at 9%. Getting this right needs care, so review your income streams with an adviser.
Small Business Relief
Resident businesses with revenue of AED 3 million or less in a tax period 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. It’s charged at 5%, registration is mandatory when taxable supplies exceed AED 375,000 a year, and voluntary from AED 187,500.
Our accounting, VAT and corporate tax service keeps your books, registrations and returns on track.
