Key takeaways
- UAE Corporate Tax is 9% on taxable income above AED 375,000; up to AED 375,000 the rate is zero.
- Businesses with revenue (not profit) up to AED 3 million can use Small Business Relief, now extended to tax periods ending on or before 31 December 2029.
- Registration on the Federal Tax Authority's EmaraTax system is mandatory for everyone in scope; the late registration penalty is AED 10,000.
- Returns must be filed and tax paid within 9 months of the end of each tax period.
Who is subject to UAE Corporate Tax?
- Companies registered in the UAE, both mainland and free zone
- Individuals carrying on a business whose annual turnover exceeds AED 1 million
- Foreign companies with a permanent establishment in the UAE
Personal income such as employment salary, personal rental income and personal investment income (without a trade licence) is not subject to Corporate Tax.
Corporate Tax rates
For example, a company with AED 500,000 of taxable income pays 9% only on the AED 125,000 above the threshold, which is AED 11,250.
| Taxable income | Rate |
|---|---|
| Up to AED 375,000 | 0% |
| Above AED 375,000 | 9% (on the excess only) |
| Qualifying income of a Qualifying Free Zone Person (QFZP) | 0% |
| Non-qualifying income of free zone companies | 9% |
Small Business Relief
Resident persons whose revenue has not exceeded AED 3 million in the current and previous tax periods can elect to be treated as having no taxable income. They pay no tax but must still register and file a simplified return.
The relief originally ran to the end of 2026 and has been extended by Ministerial Decision No. 131 of 2026 to tax periods ending on or before 31 December 2029. The test is revenue, not profit, and once you exceed AED 3 million in one period you cannot use it in later periods.
Qualifying free zone persons and members of large multinational groups cannot use this relief.
Registration and filing steps
- 1Create an account on the Federal Tax Authority's EmaraTax portal.
- 2Register for Corporate Tax with your trade licence, owners' and managers' ID documents and contact details, and receive your Tax Registration Number (TRN).
- 3Keep books and financial statements in line with accounting standards; audited financial statements are required above AED 50 million revenue.
- 4Calculate taxable income with the required adjustments (non-deductible expenses, exempt income).
- 5File the return and pay the tax within 9 months of the end of the tax period.
Common penalties
| Violation | Penalty |
|---|---|
| Late registration | AED 10,000 (waived if the first return is filed within 7 months of the end of the first tax period) |
| Late filing of the return | A monthly penalty that increases the longer the delay |
| Late payment of tax | A monthly penalty based on the unpaid tax |
| Failure to keep records | A separate fine |
Frequently asked questions
What is the Corporate Tax rate in the UAE?
9% on taxable income above AED 375,000; up to AED 375,000 the rate is zero.
Do Dubai free zone companies pay Corporate Tax?
Qualifying income of free zone companies is taxed at 0% if the QFZP conditions are met; other income is taxed at 9%.
If my company makes no profit, do I still need to register?
Yes. Registration and filing are mandatory for everyone in scope, even if no tax is due.
How long does Small Business Relief last?
Until tax periods ending on or before 31 December 2029, for businesses with revenue up to AED 3 million.
What is the penalty for not registering for Corporate Tax?
AED 10,000; it is waived if the first return is filed within 7 months of the end of the first tax period.
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