Corporate Tax in the UAE

UAE corporate tax applies to businesses operating across the mainland and free zones, with the standard rate reaching 9% on taxable income above AED 375,000.

However, your tax treatment can depend on your business structure, taxable income, free zone status, qualifying activities, related-party transactions, available reliefs and other provisions under the UAE Corporate Tax Law.

At Shuraa Tax, we help businesses understand their Corporate Tax obligations, register with the Federal Tax Authority (FTA), assess their tax position, prepare returns and maintain ongoing compliance.

What is Corporate Tax in the UAE?

For decades, the UAE built its reputation as one of the most tax-friendly places in the world to do business. That changed in June 2023, when the country introduced a federal corporate tax under Federal Decree-Law No. 47 of 2022, a move to align with international tax standards while keeping the UAE one of the most competitive economies in the region.

So, what is corporate tax, exactly? It's a direct tax charged on the net profit a business earns in a financial year. In the UAE, it applies to mainland companies, free zone entities, and foreign businesses with a taxable presence here, and it's administered by the Federal Tax Authority (FTA).

If you run a business in Dubai or anywhere else in the country, understanding how corporate tax in Dubai and the other emirates works isn't optional anymore as it shapes how you price, structure, and report your business every year.

At Shuraa Tax, we help businesses understand their Corporate Tax obligations, register with the Federal Tax Authority (FTA), assess their tax position, prepare returns and maintain ongoing compliance.

Key Features of the UAE Corporate Tax Regime

• 9% flat rate on profits above AED 375,000
• 0% for small businesses and qualifying Free Zone entities
• Standard financial year basis – firms with a fiscal year starting after June 1, 2023, are subject to corporate tax in that year
• Deductions for legitimate business expenses
• Transparent compliance with international reporting standards (IFRS)
• Penalties for non-compliance with filing or payment deadlines

UAE Corporate Tax Rate: How Much Will You Pay?

The UAE corporate tax rate follows a simple, tiered structure designed to protect small businesses while asking larger, more profitable companies to contribute a fair share:

So, a company earning AED 500,000 in taxable profit pays 9% only on the AED 125,000 above the threshold, not on the full amount. It remains one of the lowest corporate income tax UAE rates in the world, well below the 15–25% charged in many other jurisdictions.

Who Needs to Pay Corporate Tax in the UAE?

Under UAE corporate tax law, a "taxable person" includes:

• Resident persons: companies incorporated in the UAE, foreign companies effectively managed and controlled from the UAE, and individuals conducting business with turnover above AED 1 million a year
• Non-resident persons: foreign companies with a permanent establishment in the UAE, or UAE-sourced income

So, if you hold a trade licence (mainland or free zone) you're within scope, even if your final tax bill turns out to be zero.

Corporate Tax Registration in the UAE

Every taxable person, including free zone businesses paying 0%, must register with the FTA on the EmaraTax portal and obtain a Corporate Tax Registration Number. New companies generally need to register within three months of incorporation, though exact deadlines depend on the licence issue date.

Miss the deadline, and the FTA applies a fixed AED 10,000 late-registration penalty. There's some relief: filing your first corporate tax return (or annual declaration) within seven months of your first tax period ending can get this penalty waived or refunded.

Registration is a one-time process, but it's also where many businesses go wrong. Wrong tax period, incomplete licence details, or missing documents can all delay your Tax Registration Number. This is exactly where Shuraa Tax's corporate tax registration service helps.

Corporate Tax Return Filing Deadlines

Once registered, you need to file a corporate tax return every year, even if your income falls entirely within the 0% band. Returns are due nine months after your tax period ends.

For example, a company with a financial year running from January to December 2025 must file its return and settle any tax due by 30 September 2026.

Late filing adds up quickly: AED 500 per month for the first 12 months, rising to AED 1,000 per month after that, plus 14% per annum interest on unpaid tax.

How is Corporate Tax Calculated in the UAE?

Working out your corporate income tax UAE liability follows a straightforward path:

• Start with accounting net profit, per IFRS or UAE-accepted GAAP
• Deduct allowable business expenses – salaries, rent, utilities, marketing, loan interest, depreciation
• Adjust for exempt income and non-deductible items
• Arrive at taxable income
• Apply 0% on the first AED 375,000, and 9% on the balance

Keeping clean, audit-ready books isn't just good practice, it determines whether your deductions actually hold up if the FTA reviews your return.

Corporate Tax in UAE Free Zones

Free zone companies aren't automatically tax-free under the current regime. To qualify for the 0% rate, a business must be recognised as a Qualifying Free Zone Person (QFZP) by:

• Earning "Qualifying Income" from activities permitted within the free zone
• Meeting adequate substance requirements in the UAE
• Avoiding income from "Excluded Activities" or a mainland permanent establishment
• Maintaining audited financial statements

Income that falls outside these conditions is taxed at the standard 9% rate. Importantly, QFZP status doesn't remove the obligation to register and file. Free zone businesses still need a Tax Registration Number and an annual return, whether they owe tax or not.

Small Business Relief: 0% Corporate Tax for SMEs

To ease the transition for smaller companies, the UAE offers Small Business Relief: resident businesses with annual revenue up to AED 3 million can elect to be treated as having no taxable income for that period.

The Ministry of Finance recently extended this relief. It's now available for tax periods ending on or before 31 December 2029, giving startups and SMEs several more years of simplified compliance. It isn't automatic; you need to elect for it in your return, and Qualifying Free Zone Persons and members of large multinational groups can't use it.

Domestic Minimum Top-Up Tax (DMTT) for Large Multinationals

For large multinational groups, UAE corporate tax law includes an additional layer: the Domestic Minimum Top-Up Tax. It applies to MNEs with consolidated global revenue of EUR 750 million or more, in line with the OECD's Pillar Two framework.

If a qualifying group's effective tax rate in the UAE falls below 15%, DMTT closes the gap. The rule took effect for financial years starting on or after 1 January 2025, and the UAE's regime has since received "transitional qualified status" from the OECD. If your business belongs to a large international group, this is worth reviewing alongside your standard corporate tax position.

Exemptions from UAE Corporate Tax

Some entities fall outside the corporate tax net entirely, including:

• UAE government and government-controlled entities
• Extractive and non-extractive natural resource businesses (taxed at emirate level instead)
• Qualifying public benefit entities
• Qualifying investment funds
• Public and private pension and social security funds

Most exemptions still require an application or notification to the Ministry of Finance or FTA – they're rarely automatic, so it's worth confirming your entity actually qualifies before assuming you're out of scope.

Corporate Tax Services at Shuraa Tax

Managing Corporate Tax can involve much more than submitting a tax return. At Shuraa Tax, we provide end-to-end support to help businesses understand and meet their UAE Corporate Tax obligations.

Corporate Tax Registration

We assist businesses with determining their registration requirements, preparing the required information and completing Corporate Tax registration with the FTA.

Corporate Tax Advisory

Our tax advisors assess your business activities, structure, income and expenses to help you understand how the UAE Corporate Tax rules apply to your business.

Corporate Tax Impact Assessment

We review your existing business operations to identify potential Corporate Tax implications, compliance requirements and areas requiring attention.

Corporate Tax Return Filing

We help prepare, review and submit Corporate Tax Returns accurately and within the applicable deadlines.

Free Zone Corporate Tax Advisory

If you operate from a UAE free zone, we can assess whether your business may qualify for the Qualifying Free Zone Person regime and review the treatment of qualifying and non-qualifying income.

Small Business Relief Assistance

We can help eligible businesses assess their Small Business Relief position and understand the compliance requirements associated with claiming the relief.

Corporate Tax Compliance

Beyond registration and filing, we help businesses establish appropriate tax and accounting processes to support ongoing Corporate Tax Compliance and meet UAE Corporate Tax requirements.

Corporate Tax Penalty Assistance

If your business has incurred a Corporate Tax registration penalty, we can assist in assessing eligibility for the applicable penalty-waiver initiative and the required compliance steps.

Why Choose Shuraa Tax?

• FTA-registered tax agents with direct experience across UAE free zones and mainland jurisdictions
• Clear, jargon-free advice – guidance built around your business, not generic templates
• End-to-end support, from registration through filing, audits, and disputes
• A track record built over years of helping SMEs, startups, and larger enterprises stay compliant
• Transparent pricing and dedicated advisors who know your file

Corporate tax in the UAE isn't going anywhere, and the compliance bar rises every year. Partnering with a team that stays ahead of every regulatory update means one less thing to worry about.

Stay Compliant with Shuraa Tax

So, if you are starting a business in Dubai, operating an established UAE company or managing a free zone entity, getting your Corporate Tax position right can help you avoid unnecessary compliance issues and make better-informed business decisions.

Speak to Shuraa Tax's Corporate Tax experts for assistance with registration, advisory, tax return filing and ongoing UAE Corporate Tax compliance.

Other Taxation Services by Shuraa Tax

Corporate tax is one of the most essential parts of a wider suite of accounting to and tax services we offer UAE businesses:

• Corporate Tax registration, filing, and advisory services
• VAT registration, vat return filing, and deregistration
• Bookkeeping and accounting outsourcing
• MIS reporting services
• External, internal, and forensic audit services
• Tax residency certificate (TRC) assistance
• Excise tax registration and advisory
• Payroll services
• AML compliance services
• Transfer pricing advisory

Frequently Asked Questions