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Co-Founder & CEO movingo
Editor
Author
Iakov Kukushkin
Copywriter, Journalist
𖡡 Dubai
⏱ 14 min read
Updated: Sept 23, 2026
Since its introduction, Corporate Tax (CT) in the UAE has been a hot topic among entrepreneurs. Despite the number of articles on the subject, many entrepreneurs remain uncertain about the details. This uncertainty has led to unfortunate situations in which businesses have faced serious penalties — a AED 10,000 fine is no small matter.
This guide covers the current rate and rules, what changed in 2025 and 2026, and every deadline, exemption, and calculation you need, in plain English in simple terms. Our goal is to provide you with all the necessary information in one easy-to-understand article, helping you confidently navigate this topic.
This guide covers the current rate and rules, what changed in 2025 and 2026, and every deadline, exemption, and calculation you need, in plain English in simple terms. Our goal is to provide you with all the necessary information in one easy-to-understand article, helping you confidently navigate this topic.
Key takeaways
- The standard Corporate Tax rate is 9 % on taxable income above AED 375,000; income up to that amount is taxed at 0 %.
- Almost everyone doing business in the UAE must register — companies, freelancers, and Free Zone entities — even with zero revenue.
- Registration deadlines for existing businesses passed in 2024; new businesses get 3 months from the date their license is issued.
- Returns are filed and paid through EmaraTax, within 9 months of the end of your tax period.
- What is Corporate Tax in the UAE?
- Why was Corporate Tax introduced in the UAE?
- What is the Corporate Tax rate in the UAE in 2026?
- What is UAE Pillar Two?
- Who needs to pay Corporate Tax in the UAE?
- Who is exempt from UAE Corporate Tax?
- UAE Corporate Tax for Free Zone companies
- Mainland vs Free Zone Corporate Tax: what's the difference?
- How do you calculate Corporate Tax in the UAE?
- Corporate Tax calculation example
- What deductions can you claim under UAE Corporate Tax?
- Transfer pricing rules in the UAE
- Withholding tax in the UAE
- Tax grouping and group relief in the UAE
- Corporate Tax registration deadlines
- How to register for Corporate Tax on EmaraTax
- Corporate Tax compliance requirements in the UAE
- UAE Corporate Tax filing and deadlines
- How to file a UAE Corporate Tax return on EmaraTax
- What is the late payment penalty for UAE Corporate Tax in 2026?
- Common Corporate Tax mistakes and penalties to avoid
- How movingo can help with your Corporate Tax in the UAE
- FAQ
What is Corporate Tax in the UAE?
Corporate Tax is a direct tax on a company's net profit: 9 % on taxable income above AED 375,000, and 0 % below that amount. The Federal Tax Authority (FTA) introduced the tax through Federal Decree-Law No. 47 of 2022, issued on 9 December 2022, and it took effect for tax periods starting on or after 1 June 2023.
The five Corporate Tax changes every UAE business should know about in 2026.
Why was Corporate Tax introduced in the UAE?
This new tax regulation likely contributed to the UAE's successful removal from the "grey list" of countries under increased monitoring for money laundering. The UAE had been on this list since March 2022, with the Financial Action Task Force (FATF) expressing concerns about potential money laundering and terrorism financing through banks, precious metals and stones, and real estate sectors. This listing had negatively impacted the country's reputation, reduced investment, and created challenges for entrepreneurs conducting international business from the UAE. With the new tax regulations in place, businesses must maintain accurate financial records. Partnering with quality accounting services can help ensure full compliance and smooth operations.
Here are the actions taken by the UAE authorities:
These efforts paid off on 23 February 2024, when the FATF removed the UAE from the grey list after an on-the-ground review. Bhavin Shah, an anti-financial crime expert and managing director at Secretariat Advisors, said the delisting "reinstates trust within the global business community in the UAE's ability to combat financial crimes effectively."
Here are the actions taken by the UAE authorities:
- Enhanced legislation, including the Corporate Tax law, to improve transparency and tighten financial controls.
- Established a specialized court to expedite money laundering cases.
- Strengthened audits by requiring banks and financial institutions to conduct more thorough customer screenings and report suspicious transactions.
These efforts paid off on 23 February 2024, when the FATF removed the UAE from the grey list after an on-the-ground review. Bhavin Shah, an anti-financial crime expert and managing director at Secretariat Advisors, said the delisting "reinstates trust within the global business community in the UAE's ability to combat financial crimes effectively."
UAE Corporate Tax at a glance: rates, who pays, and the key deadlines.
What is the Corporate Tax rate in the UAE in 2026?
The rate is 0 % on taxable income up to AED 375,000 and 9 % on the amount above it, for every taxable person, Mainland or Free Zone. Large multinational groups may owe an extra layer of tax under Pillar Two — covered below.
Even at 9 %, the UAE keeps one of the lowest corporate tax rates among developed economies, well below the OECD average.
What is UAE Pillar Two?
Pillar Two is the OECD's global minimum tax initiative, and the UAE adopted it as the Domestic Minimum Top-up Tax (DMTT) under Cabinet Decision No. 142 of 2024, effective for fiscal years starting on or after 1 January 2025. It tops up a large multinational group's effective tax rate in the UAE to 15 % if the group's UAE entities were taxed below that rate.
Who is subject to Pillar Two?
DMTT applies only to multinational enterprise (MNE) groups with consolidated global revenue of €750 million or more in at least two of the last four financial years. It does not touch UAE-only businesses, small and medium enterprises (SMEs), or freelancers, so if your group doesn't cross that revenue line, the standard 9 % / 0 % regime is all you need to think about.
In-scope groups must file a DMTT return within 15 months of their financial year-end (18 months for the first year) and pay on submission.
In-scope groups must file a DMTT return within 15 months of their financial year-end (18 months for the first year) and pay on submission.
Who needs to pay Corporate Tax in the UAE?
Corporate Tax applies to almost every business activity carried out in the UAE, including Mainland companies, Free Zone companies, and freelancers. Only government and public benefit entities named in the law sit fully outside the system — everyone else registers, whatever their actual tax bill turns out to be.
-
Individuals and freelancers
If you run a business or freelance activity under a license and your turnover exceeds AED 1 million a year, you must register for Corporate Tax. Below that, you're outside its scope entirely — no registration, no filing. -
Mainland companies
Every Mainland company must register and file, regardless of turnover. Tax only becomes payable once taxable income exceeds AED 375,000. The registration and filing obligations are separate from the actual tax bill. For the full registration criteria, see who must register for UAE Corporate Tax. -
Free Zone companies
Free Zone entities must register too, and can keep a 0 % rate on Qualifying Income if they meet the Qualifying Free Zone Person conditions (see below). -
Government and public benefit entities
These are exempt by law, provided they're listed in the relevant Cabinet Decisions — see the exemptions section next.
Zero profit, a loss or a dormant company — none of these remove the obligation to file.
Read more: Who must register for UAE CT?
Two questions come up constantly here:
- Dividends are not taxed, provided the standard conditions for participation are met — so distributing profits to shareholders does not create a second layer of Corporate Tax on top of what the company has already paid.
- Owners' salaries depend on how they're paid: an owner with a real job and an employment contract at a company pays no Corporate Tax on their salary. Still, an owner who only owns shares without an employment contract or income from unincorporated partnerships is taxed at 9% on it instead.
Who is exempt from UAE Corporate Tax?
Two groups sit outside the standard 9 % regime:
- Small businesses that elect Small Business Relief because their revenue stays under AED 3 million.
- Government or public benefit entities specifically named in the law or a Cabinet Decision.
Everyone else pays the standard rate, though Free Zone companies can still reach 0 % on Qualifying Income through the separate Qualifying Free Zone Person (QFZP) regime covered further down.
Reliefs and 0% rates are claimed through the return — not instead of it.
Small Business Relief, extended until 31 December 2029
Small Business Relief lets UAE-resident taxable persons with revenue under AED 3 million elect to be treated as having no taxable income for that period, so no Corporate Tax is due. The Ministry of Finance extended the relief through Ministerial Decision No. 131 of 2026, which amends Ministerial Decision No. 73 of 2023 so the AED 3 million threshold now applies to every tax period from 1 June 2023 through 31 December 2029 — three years longer than originally planned. The threshold and eligibility conditions themselves are unchanged.
You still need to register and elect the relief on your return each period — it isn't automatic. Read more in our dedicated article: Small Business Relief under UAE Corporate Tax.
Small Business Relief, extended until 31 December 2029
Exempt by default, or exempt if listed in a Cabinet Decision:
- Government entities and government-controlled entities.
- Extractive and non-extractive natural resource businesses (they remain subject to Emirate-level taxation instead).
- Qualifying public benefit entities.
- Qualifying investment funds.
- Public and private pension or social security funds.
UAE Corporate Tax for Free Zone companies
A Free Zone company can keep a 0 % rate on its Qualifying Income if it registers as a Qualifying Free Zone Person (QFZP): maintaining adequate substance in the Free Zone, earning only Qualifying Income from Qualifying Activities, meeting the de minimis limit on non-qualifying income, complying with transfer pricing rules, and preparing audited financial statements.
Qualifying and excluded activities
Ministerial Decision No. 229 of 2025 sets out the current list of Qualifying Activities, replacing the 2023 version:
- Manufacturing or processing goods or materials.
- Trading Qualifying Commodities (metals, minerals, energy, agricultural commodities, and — new in the 2025 update — industrial chemicals and environmental commodities such as carbon credits).
- Holding shares and securities for investment purposes.
- Ownership, management, and operation of ships.
- Reinsurance, fund management, and wealth and investment management services.
- Headquarter services and treasury and financing services to related parties (now also covering activities a company carries out for its own account).
- Financing and leasing of aircraft.
- Distribution of goods from a Designated Zone.
- Logistics services.
Excluded Activities — income from these is always taxed at 9 %, regardless of Qualifying Activity status:
- Transactions with natural persons (with limited exceptions).
- Banking, insurance (other than reinsurance), and most finance and leasing activities.
- Owning or exploiting immovable property, other than commercial property located in a Free Zone and leased to non-Free-Zone-Person businesses.
What is Qualifying Free Zone Income?
Qualifying Free Zone Income is income a QFZP earns from its Qualifying Activities, taxed at 0 % with no upper limit. Income from Excluded Activities, or from non-qualifying activities beyond the de minimis limit, is taxed at 9 % instead.
The de minimis limit lets a QFZP earn a small amount from non-qualifying activities — the lower of 5 % of total revenue or AED 5 million — without losing QFZP status altogether. Cross that line and the whole entity loses the 0 % rate for the current period and the following four.
The de minimis limit lets a QFZP earn a small amount from non-qualifying activities — the lower of 5 % of total revenue or AED 5 million — without losing QFZP status altogether. Cross that line and the whole entity loses the 0 % rate for the current period and the following four.
For the full breakdown, see what is Qualifying Income in UAE Corporate Tax.
Does the Free Zone 0 % Corporate Tax rate still apply after the 2025 QFZP rule changes?
Yes, the 0 % rate on Qualifying Income is unchanged. What changed with Ministerial Decisions No. 229 and 230 of 2025 is the detail:
- Broader definition of Qualifying Commodities
- Treasury and financing services now also counting when done for a company's own account
- Clearer rules for distribution through Designated Zones.
Mainland vs Free Zone Corporate Tax: what's the difference?
Both are subject to the same 9 % rate and the same registration and filing duties. The difference is that a Qualifying Free Zone Person can apply 0 % to its Qualifying Income with no upper limit, while a Mainland company's 0 % band stops at AED 375,000.
How do you calculate Corporate Tax in the UAE?
The simplified formula is:
Revenue − Deductible Costs = Taxable Income,
then 0 % on the first AED 375,000 and 9 % on the rest.
then 0 % on the first AED 375,000 and 9 % on the rest.
Start from your accounting profit or loss, apply the adjustments the Corporate Tax Law requires — disallowed expenses, exempt income, reliefs you've elected — and whatever is left is what gets taxed.
Read more: How to file Corporate Tax UAE?
Corporate Tax calculation example
Start with your company's accounting profit or loss, then adjust it for tax rules to get your taxable income.
Even if your taxable income is below AED 375,000 and you owe nothing, you still need to register and file a return confirming your zero-tax status.
Corporate Tax calculation example for a Free Zone company
Here, non-qualifying income of AED 40,000 is below the de minimis limit (5 % of AED 1,240,000 total revenue ≈ AED 62,000), so QFZP status is preserved and only that AED 40,000 is taxed at 9 %.
Corporate Tax calculation example near the Small Business Relief threshold
Crossing the AED 3 million revenue threshold by even a small amount will disqualify you from Small Business Relief entirely. You will then be taxed at the standard 9% or 0% rate on your actual taxable income rather than just the amount over AED 3 million.
What deductions can you claim under UAE Corporate Tax?
Most business-related expenses are tax-deductible, though there are limits on certain items, such as entertainment expenses (50% deductible) and interest expenses. Two rules are most important for reducing what you owe over time.
Tax loss carry forward rules in the UAE
Under Articles 37 to 39 of Federal Decree-Law No. 47 of 2022, tax loss can be carried forward without expiration, but it can only offset up to 75% of taxable income in any given period. So a company with large accumulated losses still pays tax on at least 25 % of its taxable income each year.
Carrying a loss forward also requires at least 50 % continuity of ownership from the loss period to the period the loss is used, unless the business continues the same or a similar activity despite the ownership change.
Carrying a loss forward also requires at least 50 % continuity of ownership from the loss period to the period the loss is used, unless the business continues the same or a similar activity despite the ownership change.
How can businesses reduce their Corporate Tax liability?
There are a few common ways to do that:
- Electing Small Business Relief if you qualify
- Forming a Tax Group to offset profits and losses across related companies
- Structuring Free Zone activity to maximize Qualifying Income, timing deductible expenses and capital allowances correctly
- Keeping transfer pricing documentation in order so related-party deductions aren't disallowed on audit.
We cover more angles in strategies for optimizing Corporate Tax in the UAE.
If you have any questions or would like to entrust this procces to professionals who have saved companies more than AED 5 million, we are here to help.
Transfer pricing rules in the UAE
If your business conducts transactions with related parties or connected persons, those transactions must be priced at arm's length, meaning the price that unrelated parties would agree upon — under Articles 34 and 55 of Federal Decree-Law No. 47 of 2022.
Ministerial Decision No. 97 of 2023 sets the documentation thresholds:
Ministerial Decision No. 97 of 2023 sets the documentation thresholds:
- You must maintain master file and local file documentation once your UAE revenue for the tax period reaches AED 200 million,
- Once you belong to a multinational company with AED 3.15 billion or more in consolidated revenue, meeting either condition will be enough.
Documentation must be in place at the time prices are set, and not written up after the FTA has asked — you have 30 days to provide it upon request, and records must be kept for 7 years. This can be difficult to do on your own, so we can help you prepare all the documentation accurately and on time.
Withholding tax in the UAE
The UAE levies withholding tax on certain income from the UAE paid to non-residents without a permanent establishment here under Article 45 of Federal Decree-Law No. 47 of 2022. However, the current rate is 0%.
In practice, this means that no tax is withheld at this time, although the mechanism exists, and the rate could change by Cabinet decision in the future.
Tax grouping and group relief in the UAE
Two or more UAE-resident companies can form a Tax Group and file one consolidated Corporate Tax return, if a parent company holds at least 95 % of the shares, voting rights, and profit entitlement of each subsidiary, directly or indirectly. There are some condition you must follow:
- Every member must be a UAE tax resident with the same financial year-end and consistent accounting standards.
- Qualifying Free Zone Persons taxed at 0 % generally can't join a Tax Group, and the 95 % ownership condition has to hold throughout the period — a structural change can break the group and needs reporting to the FTA.
- Grouping allows profits and losses net off across the entire group, rather than being calculated individually for each entity. This is often the most significant lever for reducing the overall tax bill.
Have you been thinking about starting your own group? We can help you with the setup process and take care of all the paperwork.
Corporate Tax registration deadlines
Anyone engaged in "entrepreneurial activity" must register for corporate tax. The fine for late registration is 10,000 AED. This applies even to "natural persons," such as freelancers. Yes, even if your revenue is zero. Yes, even if all your sales are outside the UAE.
Read more: How to register for Corporate Tax UAE?
Key Corporate Tax registration deadlines
For the paperwork you'll need before you start, see documents required for Corporate Tax registration in the UAE. For a deeper look at how the deadlines are set, see Corporate Tax registration deadline in the UAE.
A real movingo client case (name changed): "Free Zone and no profit" is not an exemption.
How to register for Corporate Tax on EmaraTax
Registration happens entirely on the EmaraTax portal:
- Log in with an existing EmaraTax account or UAE Pass, or create a new account.
- Open the Taxable Person dashboard and select Register under the Corporate Tax tile.
- Enter your entity type and business details.
- Add your trade license details, and disclose any owner holding 25 % or more of the business.
- Add your business activities — separately for each branch, if you have more than one.
- Add owner information for every shareholder at or above the 25 % threshold.
- Add your registered business address and contact details.
- Add authorized signatories and upload the supporting authorization documents.
- Review everything, confirm the declaration, and submit.
You'll get an application reference number immediately, and the FTA typically confirms your TRN by email within about 20 business days.
Late registration penalty: AED 10,000
If you miss the deadline for registering, you will be subject to a fine of AED 10,000 under Cabinet Decision No. 10 of 2024. This is a one-time fine, in addition to any other fees that you may owe. It's important to get registered, even if you don't think you'll owe any taxes.
Corporate Tax compliance requirements in the UAE
Every taxable person — company, freelancer, or Free Zone entity—must keep accounting records that accurately reflect their financial position and support the figures on their Corporate Tax return. These records must follow FTA rules and, in most cases, International Financial Reporting Standards (IFRS) or IFRS for SMEs.
This applies even to businesses that owe zero tax under the Small Business Relief or the AED 375,000 threshold. Filing a nil return without proper records behind it still exposes you to a fine.
The rule that trips people up most: revenue and expenses are recorded on an accrual basis. Income is counted when it's earned, and expenses are counted when they're incurred, not when cash actually changes hands. A business that still tracks everything by bank balance usually needs to rebuild its books before filing correctly.
What every taxable person needs:
-
Accounting records that support every figure on the return, kept for 7 years and produced within the FTA's requested timeframe if asked. - Bookkeeping on an accrual basis, not a cash basis.
- A filed return every period — even at zero tax.
Who additionally needs audited financial statements, under Ministerial Decision No. 84 of 2025, for tax periods starting on or after 1 January 2025:
- Any standalone taxable person with revenue of AED 50 million or more.
- Every Tax Group, regardless of size.
- Every Qualifying Free Zone Person — audited accounts are needed to keep QFZP status in the first place, whatever the revenue.
Our 2026 UAE tax and compliance calendar tracks these obligations alongside your VAT, audit, and AML deadlines in one place. We can customize this calendar specifically for your company to help you meet deadlines and avoid penalties.
UAE Corporate Tax filing and deadlines
Your filing and payment deadline is 9 months after the end of your tax period, regardless of your financial year-end. For example, a company with a calendar year must file and pay by September 30 of the following year.
The table below shows the most common UAE financial year-ends and their exact filing and payment dates, so you can easily check your own date without having to do the math yourself.
The table below shows the most common UAE financial year-ends and their exact filing and payment dates, so you can easily check your own date without having to do the math yourself.
Financial year-end + 9 months = your filing and payment deadline.
Not sure which row applies to you, or how much prep time you actually have left?
For the full mechanics of putting a return together, see how to file Corporate Tax in the UAE.
For the full mechanics of putting a return together, see how to file Corporate Tax in the UAE.
How to file a UAE Corporate Tax return on EmaraTax
- Sign in to EmaraTax and select the correct taxable-person profile.
- Open the Corporate Tax section and choose the return for the relevant tax period.
- Confirm your taxpayer details, tax period, and accounting basis.
- Complete the financial information sections using your final accounts.
- Enter tax adjustments — exemptions, reliefs, deductions, losses, and credits.
- Complete related-party and connected-person disclosures.
- Complete the Free Zone section or make elections such as Small Business Relief, if applicable.
- Upload your financial statements and any other requested documents.
- Review the tax calculation and declarations.
- Submit, save your acknowledgement, and arrange payment by the deadline.
What is the late payment penalty for UAE Corporate Tax in 2026?
Unpaid taxes accrue a penalty of 14% per year, which is applied monthly to the outstanding amount starting from the day after the payment deadline, under Cabinet Decision No. 75 of 2023. This penalty stacks with any separate late filing penalty, so a late and unpaid return costs more than the sum of the two penalties individually.
Fictional company, real maths: how late filing, late registration and late payment penalties add up.
Common Corporate Tax mistakes and penalties to avoid
Most of the fines we see at movingo trace back to one of these seven mistakes:
-
Registering late, or not at all.
A flat AED 10,000 fine, whether you owe tax or not. -
Assuming zero sales means no registration or filing needed
Even a business with no sales or tax liability must register and file a zero return. Failing to do so triggers the same AED 10,000 registration fine, plus late-filing penalties of AED 500 per month for the first 12 months and AED 1,000 per month thereafter. -
Missing the Small Business Relief election
Relief isn't automatic. If you forget to claim it on your tax return, you'll be taxed under the standard rules, even if you qualify. -
Misclassifying Free Zone income
Treating non-qualifying or excluded-activity income as Qualifying Income can cost a company its entire QFZP status for five tax periods, not just the current one. -
Weak or missing accounting records
FTA- and IFRS-compliant bookkeeping is not optional. Gaps in this area can cost AED 10,000 for a first offense and AED 20,000 if repeated within 24 months. -
Skipping transfer pricing documentation
Once you're above the Local File threshold, related-party transactions without arm's-length support are a common audit trigger. -
Paying late
A 14 % annual penalty, charged monthly, adds up fast on a large tax bill — it's usually cheaper to arrange financing than to let it run.
For the complete list of fines with current amounts, see Corporate Tax fines and penalties in the UAE.
A real movingo client case (name changed): filing late costs more than asking early.
How movingo can help with your Corporate Tax in the UAE
Doing it yourself means tracking every decision and deadline on dozens of pages, like this one. Getting the classification of a single transaction wrong could cost you your Free Zone status or trigger a five-figure fine.
Working with movingo means that one team handles registration, elections, filing, and all the paperwork involved, while you focus on running your business.
Working with movingo means that one team handles registration, elections, filing, and all the paperwork involved, while you focus on running your business.
Doing it yourself
Working with movingo
Registration and elections
You track every deadline and form
We handle it end to end
Free Zone / QFZP classification
Risk of misclassifying income
Reviewed against current rules
Filing
Manual, once a year, high stakes
Managed, with a dedicated accountant
Penalty risk
On you
We flag issues before the FTA does
Whew, that's a lot of information! Don't worry, we've got your back. Just send us a message, and we'll guide you through the Corporate Tax rules and regulations. 🤝
Need a hand running your business in the UAE? movingo'll take care of it:
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Business Address
Visas for founders
Payment Account
Corporate Tax registration & 3 months of accounting for free
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Company Formation
Company's Books Checkup
Corporate Tax & VAT registration
Accounting Software & Automations Setup
Dedicated Account Manager & Accountant
Laws & Regulations Updates weekly
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FAQ
A direct tax on a company's net profit, introduced under Federal Decree-Law No. 47 of 2022, effective from 1 June 2023.
Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses, issued 9 December 2022.
0 % on taxable income up to AED 375,000, and 9 % above it. Large multinational groups may owe an additional top-up under Pillar Two.
Yes, they must register like any other business, though Qualifying Free Zone Persons keep a 0 % rate on Qualifying Income.
Income a Qualifying Free Zone Person earns from its approved Qualifying Activities, taxed at 0 % with no upper limit.
Revenue minus deductible costs gives taxable income; that amount is taxed at 0 % up to AED 375,000 and 9 % above it.
By electing Small Business Relief where eligible, forming a Tax Group, structuring Free Zone activity correctly, and using loss carry-forward and deductions properly.
Usually your 12-month financial year; your filing deadline falls 9 months after it ends.
Accurate financial statements, correct tax adjustments, and — for larger or Free Zone entities — audited accounts, all submitted through EmaraTax.
No, it isn't mandatory, though many businesses choose one to reduce the risk of errors and penalties.
14 % per year on the unpaid amount, applied monthly from the day after your payment deadline.
They range from AED 500 a month for late filing to AED 10,000 for late registration and AED 20,000 for repeated record-keeping failures, plus the 14 % annual late-payment charge.
The UAE's version of the OECD's global minimum tax, topping up large multinational groups' effective UAE tax rate to 15 %.
Multinational groups with consolidated global revenue of €750 million or more in at least two of the last four financial years.
VAT is a 5 % consumption tax charged on most goods and services; Corporate Tax is charged on a company's net profit. They're calculated, filed, and paid separately.
No, not for businesses above the AED 375,000 threshold — Corporate Tax has applied since 1 June 2023. There's still no personal income tax on salaries.
Every UAE company, every freelancer with turnover above AED 1 million, and every Free Zone entity — even those expecting zero tax.
Yes, registration is mandatory for anyone conducting business in the UAE above the freelancer threshold, regardless of revenue or profitability.
Government entities, qualifying public benefit entities, qualifying investment funds, pension and social security funds, and small businesses that elect Small Business Relief.
In some cases, yes: if you run a business or freelance activity and your annual income exceeds AED 1 million, you must register. Below that, you're outside its scope.
Freelancers can elect Small Business Relief and pay 0 % if turnover stays under AED 3 million, but must register once income exceeds AED 1 million regardless.
An election that treats eligible businesses with revenue under AED 3 million as having no taxable income, now extended through 31 December 2029.
No, only Qualifying Income is taxed at 0 %; income from excluded activities, or above the de minimis limit, is taxed at 9 %.
Yes, the rate itself is unchanged; Ministerial Decisions No. 229 and 230 of 2025 updated the definitions of qualifying and excluded activities.
Business expenses incurred wholly and exclusively for the business, subject to specific limits — for example, entertainment costs are only 50 % deductible.
9 months after the end of your tax period — for example, 30 September 2026 for a financial year ending 31 December 2025.
Yes, otherwise you'll face an AED 10,000 fine — registration and filing are required regardless of revenue.
Corporate Tax law in the UAE: official sources
- Federal Decree-Law No. 47 of 2022 — the Corporate Tax Law itself.
- Cabinet Decision No. 142 of 2024 — Domestic Minimum Top-up Tax (Pillar Two).
- Cabinet Decision No. 75 of 2023 — administrative penalties for Corporate Tax violations.
- Cabinet Decision No. 10 of 2024 — late-registration penalty and waiver mechanism.
- Ministerial Decision No. 131 of 2026, amending Ministerial Decision No. 73 of 2023 — Small Business Relief extension.
- Ministerial Decision No. 229 of 2025 — Qualifying and Excluded Activities for Free Zone Persons.
- Ministerial Decision No. 97 of 2023 — transfer pricing documentation.
- FTA Corporate Tax guides — official guidance and clarifications.
- Ministry of Finance — Corporate Tax overview.
- u.ae — Corporate Tax service page.
- DMCC Corporate Tax member support — practical guidance for Free Zone members.
Corporate Tax glossary: key terms explained
- Qualifying Free Zone Person (QFZP) - a Free Zone entity that meets the conditions to keep a 0 % rate on its Qualifying Income.
- Taxable Person - any person, company, freelancer, or other entity required by law to register and pay CT.
- Resident Person - a UAE-incorporated entity, or a foreign entity effectively managed and controlled in the UAE, taxed on worldwide income.
- Non-Resident Person - an entity without UAE residency that is nonetheless taxed on UAE-source income or income tied to a UAE permanent establishment.
- DMTT (Domestic Minimum Top-up Tax) - the UAE's Pillar Two mechanism, topping up large multinational groups' UAE tax rate to 15 %.
- Transfer pricing - the rules requiring related-party transactions to be priced as if the parties were unrelated (arm's length).
- Tax period - the 12-month period — usually your financial year — for which taxable income is calculated and a return is filed.
Reviewed by Zarifa Alieva, ACCA — Chief Accountant and Senior Corporate Tax Consultant at movingo, KHDA-approved UAE tax specialist with expertise in Corporate Tax compliance, FTA VAT registration and reporting, IFRS financial reporting, and audit & assurance for Free Zone and Mainland businesses in Dubai.
Reviewed on: 09/25/2026 · Full bio →
Reviewed on: 09/25/2026 · Full bio →
