UAE Corporate Tax is a federal tax on business profits, introduced with a headline rate of 9% — but only on taxable income above a tax-free threshold of AED 375,000. Profit below that threshold is taxed at 0%, and additional reliefs exist for smaller businesses and qualifying free zone entities.
How the Rate Actually Applies
Corporate Tax isn't a flat 9% on all profit — it only applies to the portion above AED 375,000. A business with AED 500,000 in taxable profit pays 0% on the first AED 375,000 and 9% only on the remaining AED 125,000, not 9% on the full amount.
Small Business Relief
Businesses below a specified revenue threshold can elect for Small Business Relief, which treats them as having no taxable income for Corporate Tax purposes, subject to meeting the eligibility conditions.
Free Zone Businesses
Qualifying free zone entities can maintain a 0% rate on qualifying income, but only if they meet specific conditions, including a de minimis test on the proportion of non-qualifying income they generate.
Check Your Own Numbers
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Frequently Asked Questions
Does every UAE business have to pay Corporate Tax?
Most businesses are within scope, but many pay 0% either because their profit is below the AED 375,000 threshold, they qualify for Small Business Relief, or they meet free zone qualifying income conditions.
Is Corporate Tax the same as VAT?
No — Corporate Tax is a 9% tax on business profit, while VAT is a 5% tax on the value added to goods and services at each stage of supply. They're separate taxes with separate registration requirements.
Do freelancers pay Corporate Tax?
Freelancers operating as a business are generally within scope, though many fall under the AED 375,000 threshold or Small Business Relief depending on their income level.
When do I need to register for Corporate Tax?
Registration requirements and deadlines depend on your business's specific circumstances — check current Federal Tax Authority guidance or the Tax Assistant tool for your situation.
What counts as taxable income for Corporate Tax?
Broadly, accounting net profit adjusted for specific items the tax law requires — exempt income, certain reliefs and disallowed expenses — rather than gross revenue.