UAE Corporate Tax Rate: 0%, 9% and 15% Explained

UAE corporate tax is 0% up to AED 375,000 of taxable income and 9% above it. See the free zone rate, the 15% top-up tax and Small Business Relief.

25 October 2026Qawi7 min read

Key takeaways

The UAE corporate tax rate is 9% on taxable income above AED 375,000, and 0% on taxable income up to that amount (Cabinet Decision No. 116 of 2022).
A Qualifying Free Zone Person pays 0% on Qualifying Income and 9% on its other taxable income, and it doesn't get the 0% band on its first AED 375,000 of taxable income.
Multinational groups with global revenue of EUR 750 million or more fall under the UAE Domestic Minimum Top-up Tax, which applies to financial years starting on or after 1 January 2025 and tops the UAE effective rate up towards the 15% global minimum.
Small Business Relief, which treats a resident business with revenue of AED 3,000,000 or less as having no taxable income, now covers tax periods ending on or before 31 December 2029 (Ministerial Decision No. 131 of 2026).
A UAE corporate tax return and the payment are due within 9 months of the end of the tax period, so a 31 December year end means 30 September of the following year.

What is the UAE corporate tax rate?

The standard UAE corporate tax rate is 9%, charged on taxable income above AED 375,000; the first AED 375,000 is taxed at 0%. The law is Federal Decree-Law No. 47 of 2022, which applies to financial years starting on or after 1 June 2023, and the threshold comes from Cabinet Decision No. 116 of 2022.

Taxable income in a tax period	Rate	Source
Up to AED 375,000	0%	Cabinet Decision No. 116 of 2022
Above AED 375,000	9%	Cabinet Decision No. 116 of 2022
Qualifying Income of a Qualifying Free Zone Person	0%	Federal Decree-Law No. 47 of 2022
Other taxable income of a Qualifying Free Zone Person	9%	Federal Decree-Law No. 47 of 2022
Top-up tax for in-scope multinational groups	Up to the 15% global minimum	Cabinet Decision No. 142 of 2024

The 9% applies only to the slice above the threshold. Say a mainland trading company has AED 1,375,000 of taxable income (a hypothetical figure). The first AED 375,000 is taxed at 0% and the remaining AED 1,000,000 at 9%, so the corporate tax is AED 90,000. Note that taxable income is accounting profit adjusted under the tax rules, so it is not the same number as the profit in your management accounts.

AED 375,000: taxable income threshold above which UAE corporate tax applies at 9%. Source: Federal Decree-Law No. 47 of 2022 and Cabinet Decision No. 116 of 2022, checked 25 October 2026.

Who pays UAE corporate tax at these rates?

UAE corporate tax applies to businesses and individuals conducting business under a UAE commercial licence, to free zone businesses, and to foreign entities that trade in the UAE on an ongoing or regular basis, according to the UAE government portal (u.ae). Government entities, certain pension and investment funds, qualifying public benefit entities and some natural resource businesses can be exempt, subject to conditions.

If you run a business as an individual, the rules turn on your licence and turnover, not on your salary or investment income. For the rate question, what matters is that a licensed business is within scope and its profit above AED 375,000 is taxed at 9%.

What corporate tax rate do free zone companies pay?

A free zone company that is a Qualifying Free Zone Person pays 0% on Qualifying Income and 9% on its taxable income that isn't Qualifying Income. A free zone company that doesn't meet the conditions is taxed at the standard rates.

The FTA's Free Zone Persons guide sets out the conditions: the company must be a juridical person registered in a free zone, keep adequate substance there, earn Qualifying Income, not elect to be taxed at standard rates, follow transfer pricing rules and keep audited financial statements. Cabinet Decision No. 100 of 2023 defines Qualifying Income, and Ministerial Decision No. 265 of 2023 sets the de minimis test.

Test or rule	What it says	Source
De minimis limit on non-qualifying revenue	The lower of AED 5,000,000 or 5% of total revenue	Ministerial Decision No. 265 of 2023
Rate on Qualifying Income	0%	Federal Decree-Law No. 47 of 2022
Rate on other taxable income	9%	Federal Decree-Law No. 47 of 2022
Effect of failing a condition	Loss of qualifying status from the start of that tax period and for the four tax periods after it	FTA Free Zone Persons Corporate Tax Guide

Free zones differ in what they allow, so check the activities on your licence and who you invoice, because revenue from mainland clients can count towards non-qualifying revenue.

Does the 15% minimum rate apply to my company?

The 15% rate applies only to members of multinational groups with annual consolidated revenue of EUR 750 million or more in at least two of the four preceding financial years. For most UAE SMEs it is irrelevant.

The Ministry of Finance states that the UAE Domestic Minimum Top-up Tax is closely aligned with the OECD GloBE Model Rules and applies to financial years starting on or after 1 January 2025. The GloBE rules set a 15% minimum effective tax rate for each jurisdiction, so a UAE entity of an in-scope group whose UAE effective rate is below 15% is charged a top-up. If your company is a standalone business or part of a smaller group, the 0% and 9% rates above are the ones that matter.

Is Small Business Relief still available, and who gets it?

Small Business Relief is available to resident businesses whose revenue is AED 3,000,000 or less in the current and all previous tax periods, for tax periods ending on or before 31 December 2029. The Ministry of Finance announced the extension from 2026 to 2029 on 7 August 2026 under Ministerial Decision No. 131 of 2026.

You make the election for each tax period. If you elect, you are treated as having no taxable income for that period, but you can't use other reliefs, exemptions or deductions, such as carrying losses forward. Qualifying Free Zone Persons and members of multinational groups with consolidated revenue above AED 3.15 billion can't use it, according to the FTA.

If you'd rather not track these dates by hand, the free UAE compliance calendar lists your company's tax and compliance deadlines.

What most guides don't tell you

The 0% band doesn't apply to Qualifying Free Zone Persons. Some guides say every UAE business gets the first AED 375,000 tax free. The FTA's free zone guide says a Qualifying Free Zone Person doesn't get it on its taxable income; that income is taxed at 9% unless it's Qualifying Income.

One bad year can cost you five. If a free zone company fails a qualifying condition, it loses qualifying status from the start of that tax period and for the four tax periods after it, per the FTA guide. A de minimis breach, for example too much revenue from mainland clients, can trigger this, so watch the ratio during the year, not at year end.

Small Business Relief is a trade-off, not a free pass. Because the relief removes your taxable income, it also removes the ability to use tax losses and other deductions. A business that expects to grow past AED 3,000,000 revenue should model the next year before electing, because eligibility depends on revenue in all previous tax periods too.

The rate is only half the cost. Your return and payment fall due 9 months after the tax period ends, and the FTA published 30 September 2026 as the deadline for financial years ended 31 December 2025. Late filing carries penalties under FTA rules, so plan the cash for the tax before the deadline arrives.

Which deadlines apply to your company?

Your tax rate matters less than knowing when your registration, return and payment fall due. The free UAE compliance calendar is a free calendar of your company's UAE tax and compliance deadlines, personalised from a few questions, as a PDF and calendar file.

Frequently asked questions

Is there a tax-free threshold for UAE corporate tax? Yes: taxable income up to AED 375,000 is taxed at 0%, and only the portion above that is taxed at 9% (Cabinet Decision No. 116 of 2022, checked 25 October 2026). Qualifying Free Zone Persons don't get this band on their taxable income, and Small Business Relief is a separate election for businesses with revenue up to AED 3,000,000.

Do free zone companies pay corporate tax in the UAE? Free zone companies are within the scope of UAE corporate tax. A Qualifying Free Zone Person pays 0% on Qualifying Income and 9% on its other taxable income; a free zone company that doesn't qualify pays the standard rates.

What is UAE corporate tax and who has to pay it? UAE corporate tax is a federal tax on business profits under Federal Decree-Law No. 47 of 2022, applying to financial years starting on or after 1 June 2023. It covers UAE companies, free zone companies, individuals running a business under a UAE commercial licence, and foreign entities that trade in the UAE on an ongoing basis.

What is a Qualifying Free Zone Person? A Qualifying Free Zone Person is a free zone juridical person that meets every condition in the Corporate Tax Law, including adequate substance in the free zone, Qualifying Income, audited financial statements and compliance with transfer pricing rules. It earns the 0% rate on Qualifying Income only while it keeps meeting those conditions.

About Qawi · Qawi is a corporate services firm licensed in the Sharjah Media City (SHAMS) free zone, handling company formation, visas and PRO, bookkeeping, VAT and corporate tax for UAE businesses. Guides are researched from FTA, Ministry of Finance and free zone sources. Qawi on LinkedIn

Sources

Last checked: 25 October 2026

This is general information, not tax or legal advice for your specific situation.