UAE Corporate Tax: the complete guide
Everything UAE businesses need to understand Corporate Tax — who it applies to, the 0% and 9% rates, how taxable income is calculated, registration and deadlines, Small Business Relief, and how free zones are treated.
What is UAE Corporate Tax?
Corporate Tax is a direct tax on the net profit of businesses. The UAE introduced Corporate Tax for financial years beginning on or after 1 June 2023. It applies broadly to UAE companies and to other juridical persons and business activities, alongside certain individuals carrying on business in the UAE, subject to the rules and thresholds set by the Federal Tax Authority (FTA).
The design is deliberately competitive: a 0% rate on taxable income up to AED 375,000 and 9% above that. This structure protects smaller UAE businesses while keeping the headline rate low by international standards.
This guide walks through the scope, the rates, how taxable income is built up, registration and filing deadlines, the transitional Small Business Relief, and how free zones fit in.
The rates: 0% and 9%
UAE Corporate Tax uses two bands based on taxable income. The AED 375,000 threshold is applied to taxable income, not to revenue.
Taxable income up to AED 375,000 is taxed at 0%, supporting smaller UAE businesses. You still have to register and, in most cases, file a return.
Taxable income above AED 375,000 is taxed at the standard 9% rate — one of the lowest headline corporate tax rates among comparable jurisdictions.
Registration is mandatory for all taxable persons
A common misconception is that only businesses expecting to pay 9% need to register. In fact, all taxable persons must register with the FTA and obtain a Corporate Tax registration number — even if their taxable income falls entirely within the 0% band, and even if they intend to claim Small Business Relief.
Registration is completed through the FTA’s EmaraTax portal. For a full walkthrough of who must register and the steps involved, see our Corporate Tax registration services.
How taxable income is calculated
Taxable income starts from your accounting profit — the net profit in your financial statements, prepared under IFRS. That figure is then adjusted for items the Corporate Tax law treats differently: certain income may be exempt, and certain expenses are disallowed and added back. The result is your taxable income, to which the 0% and 9% rates apply.
Expenses that are commonly disallowed or restricted include:
- Fines and penalties (other than amounts for breach of contract).
- Bribes and other illegitimate payments.
- Dividends and profit distributions to owners.
- Corporate Tax paid under the UAE law itself.
- A portion of entertainment expenditure, and certain non-business expenses.
Because taxable income is driven by your books, keeping clean, IFRS-based accounts throughout the year makes the year-end computation far simpler and more defensible.
The 9-month filing deadline
The Corporate Tax return and any payment are due within 9 months of the end of the tax period. If your financial year ends on 31 December, the return and payment are due by the following 30 September; if it ends on 31 May, they are due by the following 28 February.
There is a single return per tax period, filed through EmaraTax. Because the window is generous but firm, it is worth finalising your accounts and computation well ahead of the deadline.
Small Business Relief
Small Business Relief lets a business with revenue of AED 3,000,000 or less in a period elect to be treated as having no taxable income for that period — removing the Corporate Tax liability and simplifying compliance. The election is made when filing.
This is a transitional relief: under current guidance it is available for tax periods ending on or before 31 December 2026. Businesses should therefore treat it as a defined-window measure rather than a permanent feature, and plan for the periods that follow.
There are trade-offs — for example, how tax losses and certain reliefs interact with the election — so it is worth understanding the full picture before you elect. Read the detail in our Small Business Relief guide.
Free zones and the QFZP regime
Free-zone businesses are not automatically outside Corporate Tax. A Qualifying Free Zone Person (QFZP) can benefit from 0% on qualifying income and 9% on non-qualifying income — but only if it meets all of the qualifying conditions:
- Be a free-zone person incorporated or registered in a UAE free zone.
- Maintain adequate substance — core activities, assets, employees, and operating expenditure in the free zone.
- Derive qualifying income and not elect to be taxed under the standard regime.
- Meet the de-minimis rule: non-qualifying revenue must not exceed the lower of 5% of total revenue or AED 5,000,000.
- Maintain audited financial statements.
If a business loses QFZP status, it is taxed at 9% for that period and is disqualified from the regime for the following four tax periods. For a full breakdown, see our free zone Corporate Tax guide.
Corporate Tax that flows from your books
AIMuhaseb keeps IFRS-based double-entry accounts and computes UAE Corporate Tax straight from them — applying the AED 375,000 threshold and 9% rate, tracking disallowed expenses, and producing a corporate tax estimate aligned with current FTA guidance. Because your Trial Balance, P&L, and Balance Sheet stay current, the year-end computation is built on numbers you can trust.
UAE Corporate Tax questions, answered
What is the UAE Corporate Tax rate?
UAE Corporate Tax is charged at 0% on taxable income up to AED 375,000 and 9% on taxable income above AED 375,000. It applies to financial years beginning on or after 1 June 2023.
Who has to register for UAE Corporate Tax?
All taxable persons must register with the Federal Tax Authority — including businesses whose income falls entirely within the 0% band. Registration is mandatory even if no tax is ultimately payable.
When is the Corporate Tax return due?
The Corporate Tax return and any payment are due within 9 months of the end of the tax period. For a financial year ending 31 December, for example, the return and payment would be due by the following 30 September.
What is Small Business Relief?
Small Business Relief lets a business with revenue of AED 3,000,000 or less in a period elect to be treated as having no taxable income for that period. It is a transitional relief available for tax periods ending on or before 31 December 2026. See our dedicated Small Business Relief guide for the detail.
How does Corporate Tax work for free zone companies?
A Qualifying Free Zone Person (QFZP) can benefit from 0% on qualifying income and 9% on non-qualifying income, provided it meets conditions such as maintaining adequate substance, meeting the de-minimis rule, and keeping audited financial statements. Free-zone status does not automatically mean 0% on all income.
What income is subject to Corporate Tax?
Corporate Tax is charged on taxable income, which starts from accounting profit prepared under IFRS and is then adjusted for items the law disallows or exempts — for example fines, dividends, and a portion of entertainment expenditure. The result is the taxable income to which the 0% and 9% rates apply.
Keep exploring UAE Corporate Tax
Small Business Relief
≤ AED 3M revenue, to 31 Dec 2026.
Free zone Corporate Tax
The QFZP regime and 0% qualifying income.
Corporate Tax calculator
Estimate CT with the 0% and 9% bands.
Registration services
Register with the FTA the right way.
Tax glossary
Plain-English definitions of key terms.
Do CT in AIMuhaseb
Get started and compute CT from your books.
Get started with UAE Corporate Tax
Tell us about your business — mainland or free zone, revenue, and financial year — and a UAE specialist will help with registration, computation, and filing.