Three numbers decide most UAE corporate tax positions. Here is what each one governs, and where businesses most often read them the wrong way round.
The UAE corporate tax rate is 0% on taxable income up to AED 375,000 and 9% on income exceeding that threshold. That single sentence carries most of the planning weight, because the threshold applies to taxable income — not to revenue, and not to profit before adjustments.
A second, separate number governs relief rather than rate: the UAE offers tax relief for small businesses where revenue does not exceed AED 3 million. Because one figure is measured on income and the other on revenue, a business can sit above one line and below the other. Establishing which applies is the first question in any registration.
Free zone entities sit outside this arithmetic again. A free zone company may be eligible for a 0% rate if it meets specific requirements, such as not conducting business with the UAE mainland. The eligibility is conditional, and it is the conditions — not the free zone address — that determine the outcome.
Registration itself is broad in scope: all businesses operating in the UAE with taxable income above AED 375,000 must register for corporate tax, except for qualifying free zone entities and exempted businesses. Returns are then filed annually with the Federal Tax Authority, with the deadline set by the company's own financial year-end. Late submission attracts penalties that increase with the duration of non-compliance.
General information only — not tax advice. Correct as at August 2026.