UAE Corporate Tax, practically
The rate is the easy part. Registration you owe regardless of profit, a nine-month deadline with no instalments, connected-person rules that reach owner salaries, and three elections that are worth real money if modelled and expensive if assumed.
UAE Corporate Tax was introduced by Federal Decree-Law No. 47 of 2022 and applies to financial years beginning on or after 1 June 2023. This guide sets out the regime as it affects an ordinary UAE business — the rates, who is in scope, the elections that matter, the deadlines, and the adjustments that most often catch owner-managed companies.
Rates and scope
| Taxable income | Rate |
|---|---|
| Up to AED 375,000 | 0% |
| Above AED 375,000 | 9% |
| Qualifying income of a Qualifying Free Zone Person | 0% |
| In-scope multinational groups with consolidated global revenue of at least EUR 750 million | Domestic Minimum Top-up Tax of 15%, for financial years beginning on or after 1 January 2025 |
Corporate Tax applies to juridical persons incorporated in the UAE, foreign juridical persons effectively managed and controlled in the UAE, and natural persons conducting business in the UAE above the prescribed turnover threshold. Employment income, personal investment income and personal real estate income of an individual, held in a genuinely personal capacity, are outside the scope.
Registration and deadlines
- Registration is mandatory for taxable persons whether or not tax is payable — including businesses claiming Small Business Relief and free zone entities applying the 0% rate.
- The return and payment are due within nine months of the end of the tax period. A calendar year ending 31 December means a 30 September deadline.
- There are no instalments. The liability falls due with the return, so cash planning through the year is the business's own responsibility.
- Records must be kept for seven years after the end of the tax period.
From accounting profit to taxable income
The computation starts with accounting profit prepared under an acceptable framework and then adjusts. The adjustments that most commonly matter:
| Item | Treatment |
|---|---|
| Entertainment expenditure | Partially non-deductible |
| Fines and penalties | Non-deductible |
| Payments to connected persons | Deductible only up to market value for services actually provided — this catches owner salaries |
| Related-party transactions | Must be at arm's length, with disclosure and documentation |
| Net interest expenditure | Capped by reference to EBITDA above a de minimis threshold |
| Dividends and qualifying participations | Generally exempt |
| Tax losses | Carried forward subject to an offset cap and continuity-of-ownership conditions |
The three elections worth modelling
Small Business Relief
Available to a resident taxable person whose revenue does not exceed AED 3 million in the current and all previous relevant tax periods, for tax periods ending on or before 31 December 2026. The business is treated as having no taxable income — but still registers and still files. The catch: tax losses arising in a period where the relief is claimed cannot be carried forward, and interest limitation carry-forwards are affected. For a business heading past AED 3 million, electing in an early loss-making year can be actively unhelpful.
Qualifying Free Zone Person status
A free zone entity can apply 0% to qualifying income if it satisfies every condition: adequate substance in the zone, qualifying income as defined, non-qualifying revenue within the de minimis limits, transfer pricing compliance, audited financial statements, and no election to be taxed at standard rates. Failing a condition generally costs the status for that period and the following four. See free zone accounting.
Tax Group
Available where a parent holds at least 95% of share capital, voting rights and profit entitlement of each subsidiary, subject to conditions including a common financial year and accounting standards, and no member being an exempt person or a QFZP. The group files a single return as one taxable person. Whether it helps depends on whether losses in one entity can usefully shelter profits in another.
"We don't pay tax, so there's nothing to do." Registration, filing and record-keeping are obligations independent of whether any tax is due. A business owing nothing that files nothing is exposed to administrative penalties on a return that would have shown zero.
Accounting standards
Taxable income is computed from financial statements prepared under IFRS, or under IFRS for SMEs where revenue is within the prescribed threshold. A cash basis is available for smaller businesses within the prescribed limits. The framework you use is therefore a tax decision as well as a reporting one — see financial statements.
Reviewed 18 August 2026 by Ahmed Nabil Selim. UAE tax rates, thresholds and deadlines change — confirm the position for your period before relying on it.
UAE Corporate Tax Guide — frequently asked questions
It applies to financial years beginning on or after 1 June 2023, under Federal Decree-Law No. 47 of 2022. For a business with a calendar financial year, the first tax period was the year beginning 1 January 2024, with the return and payment due by 30 September 2025. Businesses with a June or other non-calendar year end started earlier.
0% on taxable income up to AED 375,000 and 9% above that. A Qualifying Free Zone Person applies 0% to qualifying income. Separately, in-scope multinational groups with consolidated global revenue of at least EUR 750 million are subject to a Domestic Minimum Top-up Tax of 15% for financial years beginning on or after 1 January 2025.
Yes. Filing is required for every registered taxable person regardless of the result. Filing a loss is also how you preserve it: tax losses are carried forward subject to conditions and an offset cap, and a loss that was never reported in a filed return is considerably harder to rely on later.
Only to the extent it reflects the market value of services actually performed for the business. Payments to connected persons — owners, directors, and related parties of either — are deductible only on that basis, and the business bears the burden of supporting the figure. Document the reasoning before filing, not after a query.
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