Corporate Tax in the UAE
How UAE corporate tax works: the 9% rate above AED 375,000, FTA registration deadlines, filing dates, Small Business Relief and free zone qualifying income rules.
Business Setup AE editorial review Last reviewed 2026-09-09
Quick answer
UAE corporate tax applies at 0% on taxable income up to AED 375,000 and 9% above that. Every taxable person — mainland or free zone, including most licence holders with no profit — must register with the Federal Tax Authority and file a return within nine months of the end of each financial year. Qualifying Free Zone Persons can keep 0% on qualifying income only if all conditions are met.
- Standard rate
- 9% above AED 375,000
- Small Business Relief
- Revenue up to AED 3m
- Registration
- Mandatory for taxable persons
- Filing deadline
- 9 months after year end
- Free zone
- 0% on qualifying income if conditions met
- Administered by
- Federal Tax Authority (FTA)
Corporate tax is a federal tax on business profit administered by the UAE Federal Tax Authority (FTA). It applies to juridical persons incorporated in the UAE, foreign entities with a UAE permanent establishment, and natural persons carrying on a licensed business above the turnover threshold. The headline structure is simple: 0% on the first AED 375,000 of taxable income, 9% on the balance.
Registration is a separate obligation from paying. A company with no profit, a dormant licence or a free zone entity expecting 0% still has to register, keep accounts and file. Missing registration or filing dates triggers administrative penalties even where the tax due is nil.
This page explains who is taxable, how taxable income differs from accounting profit, how the Qualifying Free Zone Person regime actually works, what Small Business Relief does, and the registration and filing sequence with its deadlines. Tax rules change — every figure here should be confirmed against current FTA guidance before you file.
| Obligation | Deadline | Notes |
|---|---|---|
| Corporate tax registration | Per FTA-published schedule for your licence date | Late registration carries a fixed penalty |
| Bookkeeping to IFRS | Continuous | Required regardless of profit |
| Tax return filing | 30 September of the following year | Nine months after year end |
| Tax payment | 30 September of the following year | Same deadline as filing |
| Record retention | Seven years | From the end of the tax period |
Who has to pay UAE corporate tax?
- UAE-incorporated companies, including free zone companies and branches
- Foreign companies with a permanent establishment or UAE-sourced income in scope
- Natural persons conducting business in the UAE with turnover above AED 1 million a year
- Partnerships and unincorporated structures treated as taxable persons under the law
- Exempt with conditions: government entities, qualifying public benefit entities, qualifying investment funds, extractive businesses
What is the UAE corporate tax rate?
0% applies to taxable income up to AED 375,000 and 9% to taxable income above that threshold. A separate rate under the OECD Pillar Two framework applies to very large multinational groups; ordinary SMEs and owner-managed companies are outside it.
Taxable income starts from accounting profit under IFRS and is then adjusted — non-deductible expenses added back, exempt income removed, interest limitation and related-party rules applied. Accounting profit and taxable income are rarely the same number.
| Taxable person | Rate | Condition |
|---|---|---|
| Any taxable person, first AED 375,000 | 0% | Applies once per taxable person, not per licence |
| Any taxable person, above AED 375,000 | 9% | Standard rate on the excess |
| Qualifying Free Zone Person — qualifying income | 0% | All QFZP conditions must be met and maintained |
| Qualifying Free Zone Person — non-qualifying income | 9% | De minimis breach removes QFZP status for the period |
| Small Business Relief electors | 0% treatment | Revenue up to AED 3m; election made in the return |
How does corporate tax work for free zone companies?
Free zone entities are inside the corporate tax regime, not outside it. A Qualifying Free Zone Person can apply 0% to qualifying income only if it maintains adequate substance in the zone, derives qualifying income as defined, does not elect to be taxed at 9%, complies with transfer pricing and documentation rules, and stays within the de minimis threshold for non-qualifying revenue.
Selling to UAE mainland customers is generally non-qualifying income. Breaching the de minimis threshold removes QFZP status for the current and following tax periods, so the whole profit is taxed at 9%. Free zone marketing that promises a flat '0% tax forever' is describing the best case, not the rule.
What is Small Business Relief?
Small Business Relief lets a resident taxable person with revenue at or below AED 3 million in the relevant and all previous tax periods elect to be treated as having no taxable income for that period. It is an election made in the tax return, not an automatic exemption, and it does not remove the duty to register or file.
Once revenue exceeds AED 3 million in any period, the relief is unavailable for that and later periods. Companies close to the threshold should model both outcomes before electing.
How to register for corporate tax
Registration is through the FTA's EmaraTax portal. You need the trade licence, the Memorandum or incorporation documents, shareholder and manager identification, the authorised signatory's proof of authority and the financial year end. The FTA issues a Corporate Tax Registration Number on approval.
- Register through EmaraTax, not through a free zone or licensing portal
- Set the financial year end deliberately — it fixes every future deadline
- Keep the authorised signatory documentation current; changes must be updated
- Corporate tax registration is separate from VAT registration and has its own number
Filing, payment and record-keeping
- One return per tax period, filed within nine months of the financial year end
- Tax payable is due by the same nine-month deadline
- Records must be kept for at least seven years after the end of the tax period
- Transfer pricing documentation applies to related-party and connected-person transactions above thresholds
- Audited financial statements are required for larger taxable persons and where the free zone or activity demands them
Corporate tax vs VAT — two separate regimes
| Factor | Corporate tax | VAT |
|---|---|---|
| Base | Taxable profit | Taxable supplies |
| Rate | 0% / 9% | 5% standard |
| Registration trigger | Being a taxable person | Taxable turnover above AED 375,000 |
| Filing frequency | Annual | Quarterly or monthly |
| Threshold effect | AED 375,000 profit at 0% | AED 187,500 voluntary registration |
Which businesses need advice, and which can self-file?
- Single-owner service company, revenue under AED 3m — self-filing with clean bookkeeping is realistic
- Free zone company selling into the mainland — get QFZP analysis before the year closes
- Group with related-party transactions — transfer pricing documentation is not optional
- Company with foreign shareholders or overseas branches — check permanent establishment and foreign tax credits
- Holding structures — check exempt participation and Economic Substance obligations together
Who this option suits best
- New UAE licence holders who need to register before their first deadline
- Free zone companies with any mainland-facing revenue
- Owner-managed companies near the AED 3 million relief threshold
- Groups with intra-group charges or foreign branches
- Holding companies also facing Economic Substance obligations
Step-by-step process
- 1
Confirm your taxable person status1 day
Company, branch, partnership or natural person above the turnover threshold — the answer sets everything else.
- 2
Fix the financial year end1 day
It determines your first tax period and all future filing deadlines.
- 3
Register on EmaraTax20 minutes – 20 business days
Submit licence, incorporation documents and signatory authority to obtain the Corporate Tax Registration Number.
- 4
Set up IFRS-compliant bookkeeping1 – 2 weeks
Chart of accounts, related-party ledger and document retention from day one of the tax period.
- 5
Assess reliefs and free zone position1 – 3 weeks
Small Business Relief election or QFZP condition testing, before year end, not after.
- 6
Prepare and file the return2 – 6 weeks
Adjust accounting profit to taxable income, file and pay within nine months of year end.
Documents required
- Trade licence and incorporation documents
- Memorandum of Association or equivalent constitutional document
- Passport and Emirates ID of shareholders, managers and authorised signatory
- Proof of authorisation for the signatory (power of attorney or board resolution)
- Financial statements and trial balance for the tax period
- Related-party and connected-person transaction schedules
Realistic timeline
| Stage | Duration |
|---|---|
| Registration on EmaraTax | Same day – 20 business days |
| Bookkeeping setup | 1 – 2 weeks |
| Year-end close | 2 – 6 weeks |
| Return filing window | Up to 9 months after year end |
Corporate tax registration itself carries no FTA fee. Costs come from bookkeeping, audit where required and tax advisory. Penalty amounts and deadlines must be confirmed against current FTA guidance.
Common mistakes and how to avoid them
Assuming a free zone licence means no corporate tax
Fix: Test every QFZP condition, including the de minimis limit on mainland revenue.
Skipping registration because the company made no profit
Fix: Registration and filing are required regardless of profit.
Treating the AED 375,000 threshold as per licence
Fix: It applies once per taxable person, across all their activities.
Electing Small Business Relief without modelling it
Fix: Compare the relief against carried-forward losses and interest deductions first.
No related-party documentation
Fix: Record intra-group charges and management fees at arm's length as they happen.
Myth vs reality
| Myth | Reality |
|---|---|
| Free zone companies are exempt from corporate tax | They are within the regime. 0% applies only to qualifying income of a Qualifying Free Zone Person that meets every condition. |
| No profit means nothing to do | Registration, bookkeeping and an annual return are still required. |
| Corporate tax replaces VAT | They are separate regimes with separate registrations, returns and deadlines. |
Compliance after licensing
- Corporate tax registration with the FTA — 9% applies on taxable profit above AED 375,000; 0% below it. Small Business Relief may apply to revenue under AED 3m.
- VAT registration is mandatory once taxable turnover passes AED 375,000 in 12 months, and voluntary from AED 187,500.
- Economic Substance Regulations (ESR) notifications for relevant activities such as holding, IP, headquarters and distribution.
- Ultimate Beneficial Owner (UBO) register kept with the licensing authority and updated within 15 days of any change.
- Anti-Money Laundering (AML) registration on the goAML portal for designated non-financial businesses and professions.
- Annual licence and establishment-card renewal, plus audited financials where the free zone or activity requires them.
Regulators referenced: Ministry of Economy (UAE) · Dubai Department of Economy and Tourism (DET) · Abu Dhabi Department of Economic Development (ADDED) · Federal Tax Authority (FTA) · General Directorate of Residency and Foreigners Affairs (GDRFA) · Ministry of Human Resources and Emiratisation (MOHRE)
Frequently asked questions
What is the corporate tax rate in the UAE?
Do free zone companies pay corporate tax in the UAE?
Is corporate tax registration mandatory with no profit?
When is the UAE corporate tax return due?
What is Small Business Relief?
How do I register for corporate tax?
Is corporate tax the same as VAT?
How long must records be kept?
Does an offshore company pay UAE corporate tax?
What happens if I register late?
People also ask
Can I keep 0% corporate tax by selling only outside the UAE?
For a free zone entity, income from outside the UAE is more likely to be qualifying — but every other QFZP condition, including substance and transfer pricing, still has to be met.
Does a personal salary get taxed?
Employment income of natural persons is outside the corporate tax scope. Business income of a natural person above AED 1 million a year is in scope.
Do I need an audit for corporate tax?
Audited financial statements are required for larger taxable persons and where a free zone or activity mandates them; smaller taxable persons still need IFRS-compliant records.
Founder checklist
- Confirm taxable person status and financial year end
- Register on EmaraTax and store the Corporate Tax Registration Number
- Set up IFRS bookkeeping and a related-party ledger
- Test QFZP conditions before year end if you hold a free zone licence
- Model Small Business Relief against losses and deductions
- Diarise the nine-month filing and payment deadline
- Keep records for seven years
Why you can trust this guide
- Independent marketplace — Business Setup AE does not form companies and takes no commission on provider pricing
- Every listed provider holds a valid UAE trade licence and publishes fixed prices
- Costs reviewed against 2026 published government schedules
- Written and reviewed by advisers who have processed UAE licences and residence visas
Editorial ownership: Business Setup AE Editorial Team. See our editorial and corrections policy and package verification method.
Related guides and services
Official government sources
Fees, thresholds and licensing rules on this page are checked against these official UAE government and regulator sources.
- Federal Tax Authority — corporate taxRates, registration, filing deadlines and free zone guidance
- Ministry of Finance — corporate taxLegislation, Cabinet decisions and Small Business Relief
- Ministry of Economy — UAEFederal commercial registration, trade names and company law
Topics covered
Get fixed quotes from verified providers
Tell us what you need once. Verified UAE formation firms reply with fixed, itemised pricing — usually within 15 minutes.