The UAE introduced federal Corporate Tax in 2023 — a major shift from its long-standing reputation as a zero-corporate-tax jurisdiction. Here's how it actually works today.
The two-tier structure
| Taxable Income | Rate |
|---|---|
| Up to AED 375,000 | 0% |
| Above AED 375,000 | 9% |
Only the portion of profit above AED 375,000 is taxed at 9% — the first AED 375,000 is always tax-free, similar in spirit to a personal allowance but for business profit.
Small Business Relief
Businesses with revenue below a set threshold (AED 3,000,000) can elect for Small Business Relief, treating their taxable income as effectively nil for Corporate Tax purposes — a significant simplification for smaller businesses, available through 31 December 2026 under current rules.
Who has to register
Most UAE businesses — including those in Free Zones — need to register for Corporate Tax, even if they ultimately owe nothing due to being under the threshold or qualifying for relief. Registration and filing are separate obligations from actually owing tax.
Free Zone businesses have special rules
"Qualifying Free Zone Persons" can continue to benefit from a 0% rate on qualifying income, provided they meet specific substance and activity requirements — but non-qualifying income is still taxed at the standard rate. This is one of the more nuanced areas of the regime and worth professional review if you operate in a Free Zone.
Estimate your Corporate Tax liability.
Use the Corporate Tax Calculator →Filing deadlines
Corporate Tax returns are generally due within 9 months of the end of the relevant tax period. See our Corporate Tax Deadlines guide for specifics.
UAE Corporate Tax is still a relatively new regime with rules that continue to be clarified through Federal Tax Authority guidance. Verify current thresholds, relief eligibility, and Free Zone qualification criteria with the FTA or a UAE tax advisor before filing.