The UAE introduced a federal corporate tax under Federal Decree-Law No. 47 of 2022. It applies to financial years starting on or after 1 June 2023, so most businesses with a calendar year end started on 1 January 2024. Here is how it works in practice.
Who pays
- UAE companies and other legal entities, including those in free zones
- Individuals running a business in the UAE, once their business turnover exceeds AED 1 million in a calendar year
- Foreign companies with a permanent establishment or certain UAE-source income
Salaries, personal investments and personal real estate held by individuals are generally not subject to corporate tax.
The rates
| Taxable income | Rate |
|---|---|
| Up to AED 375,000 | 0% |
| Above AED 375,000 | 9% |
Only the part above AED 375,000 is taxed at 9%. A company with taxable income of AED 1 million pays 9% × AED 625,000 = AED 56,250, an effective rate of 5.6%. Try your own figures in the corporate tax calculator.
Two groups are treated differently:
- Qualifying Free Zone Persons pay 0% on qualifying income. See free zone companies and the 0% rate.
- Large multinationals with consolidated revenue of EUR 750 million or more pay a minimum effective rate of 15% from 2025. See the 15% top-up tax.
Taxable income
Tax is charged on taxable income, which starts from your accounting profit under IFRS and is then adjusted. Common adjustments include adding back 50% of client entertainment, adding back fines, limiting interest deductions, and removing exempt dividends. See taxable income vs accounting profit.
Small Business Relief
Resident businesses with revenue of AED 3 million or less can elect Small Business Relief and be treated as having no taxable income. The relief now covers tax periods ending on or before 31 December 2029. See our Small Business Relief guide.
Key obligations and dates
| Obligation | Deadline |
|---|---|
| Register (new company) | Within 3 months of incorporation |
| Register (individual) | By 31 March after the year turnover exceeds AED 1 million |
| File return and pay | Within 9 months after the end of the tax period |
| Keep records | At least 7 years |
Every business that must register also has to file, even if no tax is due. See registration deadlines and return filing.
Penalties to avoid
- AED 10,000 for late registration
- AED 500 a month for a late return in the first 12 months, then AED 1,000 a month
Corporate tax and VAT are separate
Corporate tax is on profit; VAT is on sales. They have different registrations, thresholds and returns. A business can be registered for one and not the other.
Three quick examples
| Business | Taxable income | Tax at 0% / 9% | Notes |
|---|---|---|---|
| Design studio | AED 300,000 | AED 0 | Below the AED 375,000 band |
| Trading company | AED 1,200,000 | AED 74,250 | 9% × AED 825,000 |
| Consultancy, revenue AED 2.5m | AED 800,000 | AED 38,250, or AED 0 with Small Business Relief | Revenue is under AED 3 million |
Frequently asked questions
Is there corporate tax on dividends I receive as an individual?
Dividends received by an individual in a personal capacity are generally not subject to corporate tax. Dividends received by a UAE company are usually exempt.
Does a company with no activity still have to register?
Yes. Every juridical person within scope must register and file, even if it has no income.
Can a free zone company pay 9%?
Yes. A free zone company that does not meet the Qualifying Free Zone Person conditions is taxed at the standard 0% and 9% rates.
