UAE Corporate Tax Explained: Rates, Registration and Deadlines

Introduction

The rates, registration rules, filing deadlines, Small Business Relief extension and free zone conditions every UAE business owner should know.

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Last reviewed 24 September 2026 · Updated · 5 min read

In short

UAE Corporate Tax is charged at 0% on taxable income up to AED 375,000 and 9% on income above that, for financial years starting on or after 1 June 2023. Every taxable person, including free zone companies, must register with the Federal Tax Authority, then file a return and pay any tax within nine months of the end of each tax period. Businesses with revenue of AED 3 million or less can elect Small Business Relief, which the Ministry of Finance extended in August 2026 to tax periods ending on or before 31 December 2029.

What are the UAE Corporate Tax rates?

Corporate Tax is set out in Federal Decree-Law No. 47 of 2022 and applies to financial years starting on or after 1 June 2023. It covers businesses and individuals carrying on business under a commercial licence, including free zone businesses and foreign entities that conduct business in the UAE on a regular basis.

Large multinational groups are treated differently. For financial years starting on or after 1 January 2025, the UAE applies a Domestic Minimum Top-up Tax to members of groups with global revenue of EUR 750 million or more in at least two of the four preceding financial years, so that their effective rate reaches 15%.

The threshold for the 0% band was set by Cabinet Decision No. 116 of 2022. The rates are:

  • 0% on taxable income up to AED 375,000
  • 9% on taxable income above AED 375,000
  • 0% on the qualifying income of a Qualifying Free Zone Person, and 9% on its other taxable income
  • A top-up to a 15% effective rate for in-scope multinational groups

Who must register for Corporate Tax, and by when?

All taxable persons must register with the Federal Tax Authority (FTA), including free zone companies. Registration is required even where no tax is expected to be payable.

Individuals are only within scope if they carry on a business with annual turnover above AED 1 million. Salary, personal investment income and real estate investment income are excluded from that test.

Deadlines are set by FTA Decision No. 3 of 2024. A UAE company incorporated on or after 1 March 2024 must apply within three months of incorporation. A resident individual whose business turnover exceeds the threshold in a calendar year must register by 31 March of the following year.

Late registration carries a penalty of AED 10,000. Under the FTA's waiver initiative, the penalty is removed if the first tax return is filed within seven months of the end of the first tax period, and a penalty already paid is credited back.

When are returns and payments due?

A Corporate Tax return must be filed no later than nine months after the end of the tax period, and any tax due must be paid within the same nine months. For example, a company with a 31 December year end must file and pay within nine months, by 30 September of the following year.

Late filing is penalised at AED 500 for each month, or part of a month, for the first 12 months, and AED 1,000 per month after that. Unpaid tax attracts a penalty of 14% per annum, charged monthly.

Records supporting the return must be kept for seven years after the end of the tax period. For tax periods starting on or after 1 January 2025, audited financial statements are required where revenue exceeds AED 50 million and for every Qualifying Free Zone Person and Tax Group.

What is Small Business Relief and when does it end?

Small Business Relief allows a resident person with revenue of AED 3 million or less to be treated as having no taxable income for the period. Revenue must stay within the threshold in the current tax period and in every previous one.

The relief was originally limited to tax periods ending on or before 31 December 2026. On 7 August 2026 the Ministry of Finance announced Ministerial Decision No. 131, which extends it to tax periods ending on or before 31 December 2029. The AED 3 million threshold is unchanged.

The relief is not automatic. It must be elected for each tax period, and the business must still register and file a return. While it applies, tax loss relief and certain other reliefs and deductions are not available. Qualifying Free Zone Persons and members of multinational groups with consolidated revenue above AED 3.15 billion cannot use it.

How are free zone companies taxed?

A Qualifying Free Zone Person (QFZP) pays 0% on qualifying income and 9% on its other taxable income. It does not benefit from the 0% band on the first AED 375,000.

A company that fails a condition loses QFZP status for that tax period and the following four. The list of qualifying activities is now set by Ministerial Decision No. 229 of 2025, which replaced Ministerial Decision No. 265 of 2023.

To keep QFZP status, a free zone company must:

  • maintain adequate substance in a free zone
  • derive qualifying income, for example from qualifying activities or from transactions with other free zone persons
  • follow the arm's length principle and keep transfer pricing documentation
  • maintain audited financial statements
  • keep non-qualifying revenue within the lower of 5% of total revenue or AED 5 million
  • not elect to be taxed under the standard rules

Frequently asked questions

Do I need to register if my profit is below AED 375,000?

Yes. Registration depends on being a taxable person, not on the amount of tax payable. A company with taxable income below AED 375,000 must still register and file a return, even though the tax due is nil.

Can I still claim Small Business Relief after 2026?

Yes. Following Ministerial Decision No. 131, announced on 7 August 2026, eligible businesses can elect the relief for tax periods ending on or before 31 December 2029. Revenue must remain at or below AED 3 million in the current and all previous tax periods.

Are free zone companies exempt from Corporate Tax?

No. Free zone companies must register and file returns. A Qualifying Free Zone Person pays 0% on qualifying income, but other taxable income is taxed at 9%, and failing a condition removes the status for five tax periods in total.

Is my salary subject to Corporate Tax?

No. For individuals, Corporate Tax applies only to business activity with annual turnover above AED 1 million. Salary, personal investment income and real estate investment income are excluded from that test.

How Indigo Group can help

Indigo Group can help with bookkeeping and audit support through our Accounting and Audit team, and with Corporate Tax filing, free zone company formation, holding companies and SPVs through our Corporate Services team. Indigo Group's regulated entity, Indigo Financial Analysis and Consultancy LLC, is licensed by the UAE Capital Market Authority (CMA), licence no. 706042.

Read more about our accounting, Corporate Tax and VAT support in Dubai and our company formation and corporate services in the UAE.

To talk this through, book a consultation or message us on WhatsApp.

Written by

Alexander Hutton

CEO

Alex Hutton is the CEO of Indigo Group, where he oversees the company's strategic direction and global operations.

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Last reviewed 24 September 2026. This article is for general information only and does not constitute financial, legal or tax advice. Rules change, so please speak to a qualified adviser about your circumstances.

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