Key takeaways
- UAE corporate tax applies to companies, free zone companies and individuals running a business in the UAE, for financial years starting on or after 1 June 2023 (Federal Decree-Law No. 47 of 2022).
- The UAE corporate tax rate is 9% on taxable income above AED 375,000, with 0% on the first AED 375,000 (as of October 2026).
- A UAE free zone company is still a taxable person and must register; it gets 0% only on qualifying income, and only while it meets the Qualifying Free Zone Person conditions.
- An individual is subject to UAE corporate tax only when business turnover exceeds AED 1,000,000 in a calendar year; salary, personal investment income and real estate investment income don't count.
- A UAE corporate tax return and payment are due within nine months of the end of the tax period, so 30 September 2026 was the deadline for a 31 December 2025 year end.
- Missing UAE corporate tax registration carries an administrative penalty of AED 10,000; late filing costs AED 500 per month for the first 12 months, then AED 1,000 per month.
What is UAE corporate tax and when did it start?
UAE corporate tax is a federal tax on the taxable income of companies and certain individuals, introduced by Federal Decree-Law No. 47 of 2022 and applying to financial years beginning on or after 1 June 2023. For a company with a calendar year, that means the first taxed period was the year starting 1 January 2024. For a company with a 1 June to 31 May year, it was the year starting 1 June 2023.
The tax falls on taxable income, not on revenue, and a business files a return even where the bill is zero. Some bodies are exempt, including government entities, qualifying public benefit entities and qualifying investment funds, though the FTA may still ask an exempt person to register.
Who has to pay corporate tax in the UAE?
Any company incorporated or recognised in the UAE, any company managed and controlled from the UAE, and any individual running a business in the UAE above a set turnover must pay, unless an exemption applies. The Decree-Law splits taxable persons into residents and non-residents.
| Who | Taxable? | Condition | Source |
|---|---|---|---|
| UAE company (mainland or free zone) | Yes | Incorporated, established or recognised under UAE law | Federal Decree-Law No. 47 of 2022 |
| Foreign company managed and controlled in the UAE | Yes | Treated as resident | FTA corporate tax FAQs |
| Foreign company with a UAE permanent establishment | Yes | Taxed on income of that establishment | Ministry of Finance corporate tax page |
| Individual or sole establishment owner | Only above the threshold | Business turnover over AED 1,000,000 in a calendar year | Cabinet Decision No. 49 of 2023 |
| Government entities, qualifying public benefit entities, qualifying investment funds | Exempt | Must meet the exemption conditions | Federal Decree-Law No. 47 of 2022 |
Individuals are taxed only on business turnover; wages, personal investment income and real estate investment income are excluded however large they are (Cabinet Decision No. 49 of 2023, in force from 1 June 2023). The FTA applies the AED 1,000,000 test from the 2024 calendar year.
What is the UAE corporate tax rate and the tax-free threshold?
The rate is 0% on taxable income up to AED 375,000 and 9% on the portion above it, under Cabinet Decision No. 116 of 2022. Say a mainland services company has AED 1,000,000 of taxable income: the first AED 375,000 is taxed at 0% and the remaining AED 625,000 at 9%, a bill of AED 56,250. That figure is an illustration, not a quote.
| Situation | Rate | Note |
|---|---|---|
| Taxable income up to AED 375,000 | 0% | Standard band |
| Taxable income above AED 375,000 | 9% | Standard band |
| Qualifying Free Zone Person, qualifying income | 0% | Cabinet Decision No. 100 of 2023 |
| Qualifying Free Zone Person, other taxable income | 9% | No 0% band on this income |
| Free zone company that is not a Qualifying Free Zone Person | 0% and 9% | Standard bands |
AED 375,000: taxable income threshold above which UAE corporate tax applies at 9%. Source: Cabinet Decision No. 116 of 2022, checked 25 October 2026.
Do free zone companies pay corporate tax?
Yes, a free zone company is a taxable person, but it can pay 0% on qualifying income if it meets the Qualifying Free Zone Person conditions. Qualifying income covers certain transactions with other free zone persons, qualifying activities with non-free zone persons, qualifying intellectual property and income within the de minimis limit (Cabinet Decision No. 100 of 2023).
The FTA's free zone guide sets the de minimis test at the lower of AED 5,000,000 or 5% of total revenue for non-qualifying revenue. A company that fails it loses Qualifying Free Zone Person status for that tax period and the four after. Check which of your activities count as qualifying before assuming the 0% rate; the answer depends on the activity and on who the customer is, and free zones themselves don't decide it.
How do you register for corporate tax and what are the deadlines?
Registration is done through EmaraTax, and the deadline depends on when the company was incorporated. Companies that existed before 1 March 2024 had set deadlines between 31 May and 31 December 2024 based on licence issue month, so they have all passed.
| Taxpayer | Registration deadline | Source |
|---|---|---|
| Company incorporated, established or recognised on or after 1 March 2024 | 3 months from that date | FTA Decision No. 3 of 2024 |
| Foreign company managed and controlled from the UAE | 3 months from the end of its financial year | FTA Decision No. 3 of 2024 |
| Non-resident with a permanent establishment arising on or after 1 March 2024 | 6 months from the date it arose | FTA Decision No. 3 of 2024 |
| Individual with business turnover above AED 1,000,000 | 31 March of the following calendar year | FTA announcement, March 2025 |
| Company incorporated before 1 March 2024 | 31 May to 31 December 2024 (passed) | FTA Decision No. 3 of 2024 |
To register a company:
- Create and activate an EmaraTax account (the FTA requires UAE Pass).
- Open the EmaraTax dashboard and select "Create a New Taxable Person Profile".
- Open the Taxable Person Account and, under Corporate Tax, choose the Action menu and click "Register".
- Upload the documents the FTA lists: trade licence, certificate of incorporation or Memorandum of Association, Emirates ID and passport for owners holding more than 25% and authorised signatories, and proof of signatory authority. Files must be PDF, up to 15 MB each.
- Submit the application. The FTA page estimates about 20 business days to process it.
If you'd rather not track these dates by hand, the free UAE compliance calendar lists them for your company.
What are the penalties and when is the return due?
A corporate tax return and the tax payable are due within nine months of the end of each tax period, so a 31 December 2025 year end had a 30 September 2026 deadline (FTA, September 2026). The administrative penalties come from Cabinet Decision No. 75 of 2023 as amended.
| Violation | Penalty | Source |
|---|---|---|
| Failure to register on time | AED 10,000 | Cabinet Decision No. 75 of 2023 |
| Late filing of a tax return | AED 500 per month (or part) for the first 12 months, AED 1,000 per month from the 13th | Cabinet Decision No. 75 of 2023 |
| Unsettled payable tax | 14% per annum, charged monthly | Cabinet Decision No. 75 of 2023 |
| Record keeping failure | AED 10,000; AED 20,000 for a repeat within 24 months | Cabinet Decision No. 75 of 2023 |
The FTA runs a late registration penalty waiver: the AED 10,000 is waived if the first return is filed within 7 months of the end of the first tax period. Confirm the current conditions on the FTA's registration page before relying on it.
Does Small Business Relief still apply?
Yes. Small Business Relief now covers tax periods ending on or before 31 December 2029, after Ministerial Decision No. 131 of 2026 (issued 29 July 2026) extended the earlier 31 December 2026 end date. A resident person can elect it for a tax period if revenue was AED 3,000,000 or less in that period and in every previous one.
Electing the relief means the business is treated as having no taxable income for that period, and transfer pricing documentation isn't required, though the arm's length principle still applies. Qualifying Free Zone Persons and members of multinational groups with consolidated revenue above AED 3,150,000,000 can't use it. A business using the relief still has to register and file within the same nine months.
What most guides don't tell you
- A zero tax bill doesn't mean zero obligations. Free zone companies, businesses under Small Business Relief and companies with losses still register and file. The penalty schedule for late filing doesn't depend on whether tax is due, so a nil return filed late still costs AED 500 a month.
- VAT registration doesn't cover corporate tax. The FTA's FAQ says a business already registered for VAT must still register for corporate tax; the two are separate registrations on EmaraTax.
- The Small Business Relief revenue test looks backwards. Revenue must be AED 3,000,000 or less in the current period and all previous periods, so one year above the limit ends eligibility for later years. The FTA's own example shows a company with AED 4,300,000 prior-year revenue ineligible the next year even though current revenue was AED 1,900,000. Many guides still show the old 2026 end date.
- The free zone 0% rate can be lost for five periods. A de minimis breach in one year removes Qualifying Free Zone Person status for that period and the four that follow, so mixed free zone and mainland billing needs checking before year end, not after.
Frequently asked questions
What is the UAE corporate tax rate? The rate is 0% on taxable income up to AED 375,000 and 9% on the portion above it (Cabinet Decision No. 116 of 2022). A Qualifying Free Zone Person pays 0% on qualifying income and 9% on its other taxable income, with no 0% band on that other income.
Is there a tax-free threshold for UAE corporate tax? Yes: the first AED 375,000 of taxable income is taxed at 0%. Two other tests are easy to confuse with it: AED 1,000,000 of turnover decides whether an individual is taxable, and AED 3,000,000 of revenue is the limit for Small Business Relief.
Do free zone companies pay corporate tax in the UAE? A free zone company is a taxable person and has to register. It pays 0% only on qualifying income, and only while it meets the Qualifying Free Zone Person conditions; otherwise the standard 0% and 9% bands apply.
When do I need to register for corporate tax? A company incorporated, established or recognised in the UAE on or after 1 March 2024 must apply within 3 months of that date (FTA Decision No. 3 of 2024). Companies that existed before then had deadlines between 31 May and 31 December 2024, all now passed, and an individual must register by 31 March of the year after turnover exceeds AED 1,000,000.
Do sole establishments need to register for corporate tax? A sole establishment is run by a natural person, so the owner becomes taxable only when business turnover exceeds AED 1,000,000 in a calendar year (Cabinet Decision No. 49 of 2023). Below that level no registration is required, and wages, personal investment income and real estate investment income never count toward the turnover.
Which deadlines apply to your company?
Your registration date, financial year end and free zone status decide which corporate tax dates apply, and they differ from one company to the next. The free UAE compliance calendar turns a few answers about your company into a personalised list of UAE tax and compliance deadlines, as a PDF and calendar file.
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
- Federal Decree-Law No. 47 of 2022 and its amendments, Ministry of Finance
- Corporate tax page, Ministry of Finance
- Cabinet Decision No. 116 of 2022 on the annual taxable income subject to corporate tax
- Cabinet Decision No. 49 of 2023 on business activities of natural persons
- Cabinet Decision No. 100 of 2023 on qualifying income for Qualifying Free Zone Persons
- Cabinet Decision No. 75 of 2023 and its amendments on administrative penalties
- Ministerial Decision No. 131 of 2026 amending the Small Business Relief decision
- Small Business Relief, FTA
- Corporate tax registration service, FTA
- Free Zone Persons Corporate Tax Guide, FTA
- Corporate tax FAQs, FTA
- FTA announcement: 30 September 2026 filing and payment deadline
- FTA announcement: natural persons to register by 31 March 2025
- FTA Decision No. 3 of 2024 registration timeline (PwC summary)
Last checked: 25 October 2026
General information, not tax or legal advice for your specific situation.