Guide · updated August 2026

Corporate tax across the GCC: where the UAE actually stands

By Hamza Maghrabi · Last updated 21 August 2026

Choosing where to base a Gulf business? Headline rates only tell half the story — who the tax applies to matters more. Here's the 2026 picture.

Country	Headline rate	Who it applies to
UAE	0% / 9%	All businesses; 0% band to AED 375K, free zone 0% on qualifying income
Saudi Arabia	20% + zakat	20% income tax on foreign ownership share; 2.5% zakat on Saudi/GCC share
Qatar	10%	Foreign-owned share of profits; GCC-owned businesses largely exempt
Kuwait	15%	Foreign companies only (domestic reform in progress)
Bahrain	0% (15% DMTT)	No general corporate tax; 15% minimum tax on large multinationals from 2025
Oman	15%	All companies; 3% for qualifying small businesses; personal income tax arriving 2028

Three takeaways

The UAE remains the lowest broad-based regime in the GCC for a locally-owned SME: nothing until AED 375K profit, then 9% — and possibly 0% in a free zone. Run your number in the calculator.
Saudi Arabia's 20% is really a dual system — income tax on foreign shareholding, zakat on Saudi shareholding — so effective cost depends entirely on your cap table.
The 15% floor is coming everywhere for giants: UAE, Bahrain, Qatar, Kuwait and Oman have all enacted or announced Pillar Two top-up taxes for €750M+ multinational groups. For SMEs, nothing changes.

Relocating a business between GCC states involves far more than tax rates — substance rules, ownership restrictions and VAT registration all shift. Treat this table as the starting point, not the decision.

Rates summarised from national tax authority publications as at August 2026. General information, not advice.

Regional context

How the UAE compares across the GCC

The Gulf states have moved from almost no business taxation to six quite different regimes in under a decade. Headline rates alone are misleading, because what is taxed, and who is taxed, varies more than the percentages do.

UAE	9% corporate tax with 0% on the first AED 375,000. VAT at 5%. A 15% domestic minimum top-up tax applies to very large multinational groups.
Saudi Arabia	20% corporate income tax on the foreign-owned share of a business, with zakat at 2.5% on the Saudi and GCC-owned share. VAT at 15%, the highest in the region.
Qatar	10% corporate income tax, generally on foreign-owned profit. VAT has been planned rather than implemented.
Oman	15% corporate income tax, with a reduced rate for qualifying small enterprises. VAT at 5%.
Bahrain	No general corporate income tax, with a 15% domestic minimum top-up tax on large multinational groups from 2025. VAT at 10%.
Kuwait	15% on foreign-owned business profit, with a domestic minimum top-up tax regime for large multinational groups.

Rates move. Treat this as orientation and confirm against the relevant national authority before making a decision that depends on a specific figure.

Where the UAE genuinely stands out

Not on the headline rate. Oman at 15% and Saudi Arabia at 20% are higher, but Qatar at 10% is close and Bahrain has no general corporate income tax at all. The UAE's distinguishing features are the AED 375,000 zero band, Small Business Relief for revenue up to AED 3,000,000 which now runs to 2029, and the free zone regime that preserves 0% on qualifying income for businesses that meet the conditions.

Taken together those mean a genuinely small UAE business often pays nothing, while a comparable business elsewhere in the region pays from the first unit of profit. The advantage sits at the small end rather than at the top.

VAT tells a similar story. At 5% the UAE sits at the bottom of the range alongside Oman, against 10% in Bahrain and 15% in Saudi Arabia.

What the comparison leaves out

Effective cost is not just the rate. Licence fees, visa costs, mandatory insurance, office requirements and the practical burden of compliance differ substantially, and for a small business those can exceed the tax. Withholding taxes on cross-border payments, treaty networks and substance requirements matter more as soon as you operate in more than one country.

For the UAE detail see the corporate tax guide, the Small Business Relief guide and the free zone cost comparison.

Common questions

Which GCC country has the lowest corporate tax?

Bahrain has no general corporate income tax, though a 15% domestic minimum top-up tax applies to large multinational groups from 2025. Among states with a general regime, Qatar at 10% and the UAE at 9% are the lowest headline rates.

Is UAE corporate tax low compared with the rest of the GCC?

The 9% headline rate is competitive but not unique. The bigger differences are the 0% band on the first AED 375,000, Small Business Relief up to AED 3,000,000 of revenue, and the free zone regime.

Which GCC country has the highest VAT?

Saudi Arabia at 15%. Bahrain is at 10%, while the UAE and Oman are at 5%. Qatar has planned VAT without implementing it.

Does Saudi Arabia charge zakat instead of corporate tax?

Both apply, split by ownership. Corporate income tax at 20% applies to the foreign-owned share and zakat at 2.5% to the Saudi and GCC-owned share.

General information about UAE rules, not tax or legal advice. Verify anything that affects a decision with the relevant authority or a licensed adviser. About · Contact · Terms · Privacy