UAE Corporate Tax: Rates, Thresholds, and Free Zone Rules
The UAE charges corporate tax at 9% on taxable income above AED 375,000 and 0% up to that threshold, under Federal Decree-Law No. 47 of 2022, effective for financial years starting on or after 1 June 2023. Registration with the Federal Tax Authority is mandatory for every taxable person, including companies that expect to pay 0%.
UAE Corporate Tax Rates in 2026
UAE corporate tax in 2026 has four practical bands: 0% on profit up to AED 375,000, 9% above that line, 0% for Qualifying Free Zone Persons on qualifying income, and a 15% effective minimum for multinational groups with EUR 750 million or more of global revenue; the table lists each case.
| Taxpayer / income | Rate |
|---|---|
| Taxable income up to AED 375,000 | 0% |
| Taxable income above AED 375,000 | 9% |
| Qualifying Free Zone Person, qualifying income | 0% |
| Qualifying Free Zone Person, non-qualifying income | 9% |
| Natural persons with UAE business turnover above AED 1 million per calendar year | standard 0%/9% bands |
| Multinational groups with global revenue of EUR 750 million+ (OECD Pillar Two top-up, DMTT, from 2025) | 15% effective minimum |
Corporate Tax Calculator (2026 Rules)
Enter annual revenue and taxable profit to see the tax under the standard bands and whether Small Business Relief applies. The output is arithmetic on published thresholds, not tax advice; QFZP status and adjustments change real computations.
Small Business Relief: 0% for Revenue up to AED 3 Million, Now Until 2029
Small Business Relief lets a UAE resident business elect to be treated as having no taxable income while revenue stays at or below AED 3 million in the current and all prior tax periods. The relief originally expired at the end of 2026; Ministerial Decision No. 131 of 2026 extended it to tax periods ending on or before 31 December 2029, as reported by The National on 7 August 2026. The election is made in the tax return for each period; a business that skips the election pays normal rates.
How Free Zone Companies Keep the 0% Rate
A free zone company pays 0% only as a Qualifying Free Zone Person (QFZP): it must maintain adequate substance in the zone, earn qualifying income (broadly, trade with other free zone persons and foreign markets, plus a list of qualifying activities), stay within the de minimis limit for non-qualifying revenue (5% of total revenue or AED 5 million, whichever is lower), and file audited accounts. Breaching the conditions removes QFZP status for the year and the following four years. Mainland-sourced trading income is taxed at 9% regardless of where the company is registered.
Deadlines and Penalties Every Company Should Know
Four corporate tax deadlines and penalties bind every UAE company: the AED 10,000 late-registration penalty, the 9-month return deadline, the 7-year record-keeping duty, and transfer-pricing documentation above FTA thresholds.
- Corporate tax registration is mandatory; late registration carries an AED 10,000 penalty.
- The return and payment are due within 9 months of the financial year end.
- Records supporting the return must be kept for 7 years under the corporate tax law.
- Transfer pricing documentation applies to related-party dealings above FTA thresholds.
Bookkeeping and VAT interact with corporate tax on every filing; the practical duties are listed on the VAT and accounting page.
UAE Corporate Tax FAQ
What is the UAE corporate tax rate in 2026?
The UAE corporate tax rate in 2026 is 0% on taxable income up to AED 375,000 and 9% on taxable income above AED 375,000, under Federal Decree-Law No. 47 of 2022, applying to financial years that started on or after 1 June 2023. Qualifying free zone persons pay 0% on qualifying income.
Who qualifies for UAE Small Business Relief?
A UAE resident business with revenue at or below AED 3 million in the relevant and all previous tax periods can elect Small Business Relief and be treated as having no taxable income. Ministerial Decision No. 131 of 2026 extended the relief to tax periods ending on or before 31 December 2029.
Do free zone companies have to register for UAE corporate tax?
Yes. Every UAE taxable person, including a free zone company expecting 0% as a Qualifying Free Zone Person, must register with the Federal Tax Authority and file a return; late registration carries a fixed AED 10,000 penalty.