Guide ยท updated August 2026
UAE corporate tax, explained without the jargon
The UAE introduced federal corporate tax for financial years starting on or after 1 June 2023 under Federal Decree-Law No. 47 of 2022. If you run a business in the UAE โ mainland or free zone, company or licensed freelancer โ this guide covers what you'll actually pay and what you must do, in plain language.
The rates
| Taxable income | Rate |
|---|---|
| Up to AED 375,000 | 0% |
| Above AED 375,000 | 9% |
| Qualifying Free Zone Person โ qualifying income | 0% |
| Qualifying Free Zone Person โ non-qualifying income | 9% |
Taxable income starts from your accounting net profit, adjusted for items like exempt dividends, unrealised gains and non-deductible expenses. For most small businesses the accounting profit is a close proxy โ run yours through our corporate tax calculator for an instant estimate.
Who pays โ and who doesn't
- UAE companies (LLC, PJSC, free zone entities): in scope from their first financial year starting after 1 June 2023.
- Freelancers and sole establishments: in scope only if annual business turnover exceeds AED 1,000,000.
- Individuals: salaries, personal bank interest, personal investments and personal real estate income are all outside corporate tax.
- Exempt entities: government bodies, qualifying investment funds, public benefit entities and pension funds, subject to conditions.
Small Business Relief
If your revenue is AED 3,000,000 or less in the current and all previous tax periods, you can elect Small Business Relief on your return for periods ending on or before 31 December 2026. Once elected, you're treated as having no taxable income for that period โ you still register and file, but pay nothing. Full details in our Small Business Relief guide.
Free zone companies
Free zone entities can keep a 0% rate on qualifying income if they meet the Qualifying Free Zone Person conditions: adequate substance in the zone, audited financials, transfer pricing compliance, and staying within qualifying activities. Get it wrong and the whole income becomes taxable at 9% โ see the free zone guide.
Registration, filing and deadlines
- Register with the Federal Tax Authority on EmaraTax and obtain a Corporate Tax Registration Number. Late registration costs AED 10,000.
- Keep records: financial statements and supporting documents for 7 years.
- File and pay within 9 months of your financial year end. A December year-end means a 30 September deadline the following year.
Missing deadlines triggers monthly penalties โ the penalty calculator shows exactly what a delay costs.
Five practical tips for SMEs
- Register early even if you expect zero tax โ the AED 10,000 late-registration fine applies regardless.
- Separate business and personal spending; only business expenses are deductible.
- If revenue is near AED 3M, time invoices carefully โ crossing the line ends Small Business Relief eligibility.
- Free zone entities should confirm qualifying-activity status in writing with an advisor, not assume it.
- Interest deduction and loss-carry-forward rules can materially reduce future bills โ worth a one-off professional review.
This guide is general information, not tax advice. Rules summarised as at August 2026 โ confirm your position with a licensed UAE tax agent.