UAE corporate tax: rates, registration, and what every business needs to know

The UAE Corporate Tax rate is 9% on taxable income exceeding AED 375,000 per financial year. Income up to AED 375,000 is taxed at 0%. This rate applies to all UAE businesses, including free zone companies, unless a specific exemption applies.

UAE Corporate Tax applies to financial years starting on or after 1 June 2023. For a business with a financial year running January to December, the first year subject to corporate tax is the 2024 financial year (starting 1 January 2024).

Yes. Free zone companies are subject to UAE Corporate Tax under the same law as mainland companies. A free-zone licence does not automatically exempt a company. However, a company that qualifies as a Qualifying Free Zone Person (QFZP) may pay 0% on Qualifying Income, subject to FTA conditions including adequate substance, qualifying activities, transfer-pricing compliance, audited financials, and the applicable de minimis limit on non-qualifying revenue. Income from mainland customers must be tested against the QFZP rules; a mainland customer does not automatically determine the tax result. The activity, transaction structure, and QFZP conditions must be examined together.

UAE-resident juridical persons generally must register for Corporate Tax even if their taxable income is below the AED 375,000 threshold. Registration is required regardless of whether a tax liability arises. Natural persons conducting business activity generally register only when annual turnover exceeds AED 1 million. Late registration can result in an AED 10,000 administrative penalty.

Small Business Relief allows eligible UAE-resident businesses with revenue of AED 3 million or less per tax period to elect to be treated as having zero taxable income for that period. The AED 3 million test is based on revenue, not taxable profit. The relief is available for tax periods ending on or before 31 December 2026, must be actively elected in the tax return, and does not remove the obligation to file. Qualifying Free Zone Persons cannot generally use Small Business Relief.

For juridical persons incorporated or established on or after 1 March 2024, registration must generally be completed within three months of incorporation, establishment, or recognition. For older entities, the deadline depends on the month in which the licence was issued and the FTA's applicable timetable. Late registration can result in an AED 10,000 administrative penalty. Businesses should verify their specific deadline on the FTA portal or through a registered tax agent.