What is the UAE corporate tax rate?

UAE corporate tax is 0% on the first AED 375,000 of taxable profit and 9% on profits above that threshold. Qualifying free zone companies can get 0% on qualifying income. Small businesses with revenue under AED 3 million can elect for zero taxable income through 2026.

Who pays UAE corporate tax?

All UAE businesses (mainland and free zone), individuals earning business income above AED 1 million/year, and foreign companies with a UAE permanent establishment. Employees earning salaries do not pay corporate tax.

What is Small Business Relief?

Small Business Relief allows businesses with annual revenue of AED 3 million or less to elect to have zero taxable income — meaning no corporate tax is payable. Available for tax periods ending on or before 31 December 2026. Not available to free zone persons or multinational groups.

UAE Corporate Tax Calculator 2025 — Estimate Your 9% CT Liability

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UAE Corporate Tax — Key Facts

Federal Decree-Law No. 47 of 2022 · Effective from financial years beginning on or after 1 June 2023

The structure: The UAE corporate tax applies at 0% on the first AED 375,000 of taxable income per year, and 9% on any profit above that threshold. This means businesses with profits under AED 375,000 pay zero corporate tax.

Who pays: All UAE businesses — mainland and free zone — must register with the FTA. Individuals conducting business with revenue above AED 1 million/year are also subject to CT. Employment income (salaries, bonuses, end-of-service gratuity) is completely exempt.

Small Business Relief: If your annual revenue is AED 3 million or less, you can elect for zero taxable income — paying no CT. This relief is available for tax periods ending on or before 31 December 2026 and is a major benefit for UAE small businesses and freelancers.

Free Zone companies: Free zone companies can qualify for a 0% rate on qualifying income — but only if they meet substance requirements (real operations in the free zone), comply with de minimis non-qualifying income limits (less than 5% of revenue), and maintain audited financials. Non-qualifying income is taxed at 9% above the threshold.

Registration is mandatory: All businesses (even those owing zero tax) must register with the FTA via the EmaraTax portal and file annual returns within 9 months of the financial year-end. Penalties for late registration: AED 10,000 (first failure), AED 20,000 (repeated).

Common Questions

Is corporate tax different from VAT?+

Yes — completely separate obligations. Corporate tax (CT) is a tax on business profit at 9%. VAT is a consumption tax at 5% charged on the sale of goods and services. A business can be registered for both VAT and CT independently. VAT registration is mandatory once taxable supplies exceed AED 375,000. CT registration is mandatory for all businesses regardless of profit.

What expenses reduce my taxable profit?+

Deductible expenses include: staff salaries and gratuity, rent and utilities, depreciation, interest on business loans (subject to EBITDA cap), marketing costs, professional fees, and bad debts. Non-deductible: personal expenses, fines and penalties, entertainment expenses above a threshold, and expenses relating to exempt income.

When is my first CT filing due?+

Filing is due 9 months after the end of your tax period. For a company with a December 2024 year-end, the return must be filed by 30 September 2025. For a June 2024 year-end, by 31 March 2025. Check your specific year-end and calculate accordingly.

Do I need an accountant for UAE corporate tax?+

For simple businesses with straightforward income and expenses, a small business owner can prepare and file their own return via EmaraTax. Free zone companies with multiple income streams, businesses with cross-border transactions or related-party dealings, or any company subject to transfer pricing rules should engage a qualified tax advisor. Penalties for errors can be significant.