Key points
- Corporate tax (also called business tax or company tax) is 0% up to AED 375,000 of taxable income and 9% above it
- Every UAE company must register and file a return, including free zone and loss-making companies
- The return and payment are due nine months after your financial year ends
- Salaries and personal investment income are not taxed
What is corporate tax in the UAE?
Corporate tax is a federal tax on the net profit of businesses. It was introduced by Federal Decree-Law No. 47 of 2022 and applies to financial years starting on or after 1 June 2023. You will also see it called business tax, company tax or corporate income tax. They are the same thing.
It is administered by the Federal Tax Authority (FTA), and everything from registration to payment is done online through the EmaraTax portal. It sits alongside VAT, which taxes sales, and excise tax, which applies to specific goods.
The UAE corporate tax rate
The rate depends on your taxable income for the year.
| Taxable income | Rate |
|---|---|
| Up to AED 375,000 | 0% |
| Above AED 375,000 | 9% on the amount above the threshold |
| Qualifying income of a Qualifying Free Zone Person | 0% |
| Large multinational groups (global revenue of EUR 750 million or more) | 15% minimum, through a domestic top-up tax |
An example. A trading company makes a taxable profit of AED 1,000,000. The first AED 375,000 is taxed at 0%. The remaining AED 625,000 is taxed at 9%, giving tax of AED 56,250. The effective rate is about 5.6%.
Who has to pay?
Corporate tax applies to:
- UAE companies of every type: LLCs, private and public joint stock companies, free zone companies and civil companies
- Foreign companies that are managed and controlled from the UAE, or that have a permanent establishment here such as a branch
- Individuals who run a business in the UAE with turnover above AED 1 million in a calendar year
An individual's salary, personal investment income and income from personally held real estate are outside the tax and do not count towards the AED 1 million test. Our guide to income tax in Dubai covers individuals in more detail.
Exemptions and reliefs
Some persons are exempt, including government entities, qualifying public benefit entities, qualifying investment funds and businesses extracting natural resources that are taxed at emirate level.
Certain income is exempt for everyone, most importantly dividends from UAE companies and, subject to conditions, dividends and capital gains from qualifying shareholdings.
Two reliefs matter to most small and mid-sized businesses:
- Small business relief. A resident business with revenue of AED 3 million or less can elect to be treated as having no taxable income. It is available for tax periods ending on or before 31 December 2026 and has to be claimed in the return.
- Tax losses. A loss can be carried forward and set against up to 75% of taxable income in future years.
Free zone companies
Free zone companies are inside the corporate tax system. They register, keep books and file returns like everyone else. The difference is the rate: a Qualifying Free Zone Person pays 0% on qualifying income and 9% on other income.
Qualifying is conditional and tested every year. Our guide to free zone corporate tax covers the conditions in detail.
How taxable income is calculated
You start with the net profit in your financial statements, prepared under IFRS, and adjust it. Common adjustments are:
- Removing exempt income such as qualifying dividends
- Adding back expenses that are not deductible, such as fines and half of client entertainment costs
- Limiting net interest expense above AED 12 million to 30% of EBITDA
- Adjusting related-party transactions to arm's length prices
- Deducting losses brought forward
Payments to owners and their relatives need care. Salaries and fees paid to connected persons are deductible only up to market value.
Registration
Every taxable person must register with the FTA and obtain a corporate tax registration number. New companies must apply within three months of incorporation. The penalty for late registration is AED 10,000.
See corporate tax registration for the documents and steps.
Filing and payment deadlines
There is one return a year. It is due, together with the payment, within nine months of the end of your tax period.
| Financial year ends | Return and payment due |
|---|---|
| 31 December 2025 | 30 September 2026 |
| 31 March 2026 | 31 December 2026 |
| 30 June 2026 | 31 March 2027 |
| 31 December 2026 | 30 September 2027 |
Records supporting the return must be kept for seven years. Audited financial statements are required if revenue exceeds AED 50 million, and for Qualifying Free Zone Persons.
Penalties
| Failure | Penalty |
|---|---|
| Late registration | AED 10,000 |
| Late filing of a return | AED 500 a month for the first 12 months, then AED 1,000 a month |
| Late payment | 14% a year on the unpaid tax, charged monthly |
| Not keeping required records | AED 10,000, rising to AED 20,000 for a repeat within 24 months |
Penalties are set by cabinet decision and are revised from time to time. Check the current schedule before relying on a figure.
What to do now
- Confirm that every entity you own is registered
- Make sure your books are complete and follow IFRS
- Review payments to owners and related companies
- Decide whether small business relief or a tax group helps you
- Put your filing date in the calendar and start three months early
This guide is general information based on UAE rules as understood in October 2026. Tax rules change and depend on your facts. Speak to us before acting on it.