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.
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