The UAE introduced a federal Corporate Tax on business profits, effective for financial years starting on or after 1 June 2023. It's still one of the most competitive regimes in the world, but it does mean most businesses now need to register and file. Here's the plain-English version. (This is general information, not tax advice — confirm your position with a qualified adviser.)
The headline rates
- 0% on taxable profits up to AED 375,000.
- 9% on taxable profits above AED 375,000.
- A different rate applies to very large multinationals under global minimum-tax rules.
How free zones are treated
Free zone companies aren't automatically exempt. A "Qualifying Free Zone Person" that meets specific conditions — including earning "qualifying income" and maintaining adequate substance — can benefit from a 0% rate on that qualifying income. Income that doesn't qualify is taxed at the standard rate. The conditions are detailed, so free zone businesses should check their status carefully.
Small business relief
Eligible businesses below a revenue threshold may elect for Small Business Relief, which can simplify obligations for smaller companies during the applicable periods. Eligibility and timing conditions apply.
What you need to do
- Register for Corporate Tax with the Federal Tax Authority.
- Maintain proper accounting records and financial statements.
- Determine your taxable income and any reliefs that apply.
- File your Corporate Tax return and pay any tax due within the deadlines.
Corporate Tax is separate from VAT (5%), which has applied since 2018. Getting your structure and bookkeeping right from the start makes compliance simple — we help set up the right foundations during formation.