UAE Corporate Tax Rules Explained: 2026 Guide
UAE corporate tax is now several years old, but it still confuses many business owners. Who has to register? What counts as taxable income? What about free zones, freelancers and small businesses? And with rules changing in 2026, some older guides are already out of date.
This guide explains UAE corporate tax rules in plain English: rates, who pays, registration, deadlines, Small Business Relief, free zone treatment and common mistakes.
Quick answer: UAE corporate tax is 0% on taxable income up to AED 375,000 and 9% on income above that. It applies to financial years starting on or after 1 June 2023. Most businesses must register with the Federal Tax Authority (FTA), file a return within nine months of their financial year end and keep records for seven years. Small Business Relief for businesses with revenue up to AED 3 million now runs until 31 December 2029.
Who Pays UAE Corporate Tax?
| Type | Taxed? |
|---|---|
| UAE mainland companies | Yes, on taxable income |
| Free zone companies | Yes, with a potential 0% rate on qualifying income |
| Foreign companies with a permanent establishment or UAE-source business income | Yes, in certain cases |
| Individuals with UAE business turnover above AED 1 million in a calendar year | Yes, on the business profit |
| Employees receiving a salary | No, there is no personal income tax on salary |
Some categories can be exempt, such as certain government entities, qualifying public benefit organisations and some investment funds. Extractive and natural resource businesses are generally taxed under separate emirate-level rules. Always check whether your entity qualifies before assuming an exemption.
UAE Corporate Tax Rates at a Glance
| Situation | Rate |
|---|---|
| Taxable income up to AED 375,000 | 0% |
| Taxable income above AED 375,000 | 9% |
| Qualifying Free Zone Person, qualifying income | 0% |
| Qualifying Free Zone Person, non-qualifying income | 9% (above the threshold) |
| Large multinational groups (global revenue EUR 750 million or more) | Domestic Minimum Top-up Tax of 15% effective, from 2025 |
Small Business Relief: Updated for 2026
Small Business Relief lets an eligible UAE resident business elect to be treated as having no taxable income, so no 9% corporate tax is due for that period.
The key update: Many guides say the relief ends on 31 December 2026. That is now out of date. On 7 August 2026, the Ministry of Finance announced Ministerial Decision No. 131 of 2026, extending the relief to tax periods ending on or before 31 December 2029. The AED 3 million revenue threshold is unchanged.
Key points:
- Revenue ceiling: AED 3 million or less in the current tax period, and in all previous tax periods
- Not automatic: You must actively elect the relief on your return
- Still must register and file: The relief reduces tax to zero, but it does not remove registration, filing or record-keeping duties
- Not available to everyone: Qualifying Free Zone Persons and members of large multinational groups are excluded
- Do not split your business: If the FTA concludes a business was artificially divided to stay under the threshold, it can deny the relief
You can read more on the Ministry of Finance website.
Free Zone Companies and QFZP Status
Free zone companies are not automatically tax-free. A Qualifying Free Zone Person (QFZP) pays 0% on qualifying income, while other income is taxed at 9% above the threshold.
Typical conditions include:
- Real substance in the free zone, such as staff and premises that match the activity
- Earning qualifying income, such as certain income from other free zone entities or from outside the UAE
- Keeping non-qualifying income within allowed limits
- Meeting transfer pricing and audit requirements
Selling to mainland customers can produce non-qualifying income, so get advice before you structure your business. Our UAE free zone company setup guide covers this in more depth.
Multinationals and the 15% Top-Up Tax
The UAE applies a Domestic Minimum Top-up Tax (DMTT) of 15% to large multinational groups with consolidated global revenue of EUR 750 million or more, for financial years starting on or after 1 January 2025. This aligns the UAE with global minimum tax rules. Most small and medium businesses are not affected.
Corporate Tax Registration
- Who: Almost every business must register, including free zone companies and those electing Small Business Relief, even if no tax is due.
- When: For new companies, generally within three months of the trade licence or incorporation date. Check the FTA’s current deadline for your entity type.
- How: Through the FTA’s EmaraTax portal.
- Penalty: Late registration carries an administrative penalty of AED 10,000.
Filing and Payment Deadlines
Your corporate tax return and payment are due nine months after the end of your financial year, through EmaraTax. Even businesses with no tax to pay must file.
| Financial year end | Return and payment due |
|---|---|
| 31 December 2025 | 30 September 2026 |
| 31 March 2026 | 31 December 2026 |
| 31 December 2026 | 30 September 2027 |
Late filing and late payment attract penalties and interest, so check the FTA’s current penalty rules.
Records and Ongoing Compliance
- Keep records for seven years, including accounting records and supporting documents
- Use appropriate accounting standards, and prepare audited financial statements if your revenue or status requires it
- Document related-party transactions and follow transfer pricing rules where they apply
- Maintain UBO and licence records
- Follow the UAE’s e-invoicing rollout as it applies to your business
Step-by-Step Corporate Tax Checklist
- Confirm whether you are a taxable person or an exempt entity.
- Register with the FTA on EmaraTax and keep your registration number.
- Set up proper bookkeeping from the start.
- Work out your tax period and financial year end.
- Check whether Small Business Relief or QFZP status applies to you.
- Prepare your return with accurate financial statements.
- File and pay within nine months of your year end.
- Keep your records for seven years.
Common Mistakes to Avoid
- Assuming a free zone company pays no tax automatically
- Missing registration because “no tax is due”
- Relying on outdated information about Small Business Relief
- Not keeping proper records or financial statements
- Splitting a business to stay under the AED 3 million threshold
- Ignoring deadlines because the return looks “nil”
FAQs
What is the UAE corporate tax rate?
It is 0% on taxable income up to AED 375,000 and 9% on taxable income above that. Qualifying Free Zone Persons can pay 0% on qualifying income, and large multinational groups face a 15% top-up tax.
Who must register for UAE corporate tax?
Almost all businesses, including free zone companies and businesses electing Small Business Relief, must register with the FTA. Individuals are covered if their business turnover exceeds AED 1 million in a calendar year.
Is Small Business Relief still available in 2026?
Yes. It was extended to tax periods ending on or before 31 December 2029. Eligible businesses with revenue up to AED 3 million can elect it, but they must still register and file a return.
When is the corporate tax return due in the UAE?
Nine months after the end of the financial year. For a business with a 31 December 2025 year end, the deadline was 30 September 2026.
Do UAE employees pay income tax on their salary?
No. The UAE does not charge personal income tax on salaries. Corporate tax applies to businesses and to individuals with business turnover above the threshold.
Final Thoughts
UAE corporate tax is manageable when you register on time, keep good records and claim the reliefs you qualify for. UAE Living Guide offers an overview, but this is general information, not tax advice, so confirm the latest rules on the FTA website and with a qualified tax adviser. For official business guidance, see the UAE Government business portal.
