UAE Corporate Income Tax in 2026: Rates, Registration, Relief and Filing

The UAE introduced a federal corporate income tax for financial years starting on or after 1 June 2023, and most companies have now filed at least one return. If you own a mainland LLC, a free zone company, or trade as a sole proprietor with a large turnover, this guide covers what you owe and when. It sets out the 2026 rates, who has to register and by what date, the AED 10,000 late-registration penalty and how the waiver works, Small Business Relief (now extended to 2029), free zone treatment, tax groups, transfer pricing, and the filing deadline, with a worked calculation in dirhams.

Quick answer

UAE corporate tax is 0% on taxable income up to AED 375,000 and 9% above it. Every company must register with the Federal Tax Authority (FTA) on EmaraTax, normally within 3 months of incorporation, and file a return and pay within 9 months of its financial year end.

• Late registration costs AED 10,000, waived if your first return is filed within 7 months of your first tax period's end

• Small Business Relief: revenue of AED 3 million or less means no tax, for periods ending by 31 December 2029

• Qualifying Free Zone Persons pay 0% on qualifying income only; everything else is taxed at 9%

• Individuals are caught only when business turnover tops AED 1 million a year

What UAE corporate tax is and who pays it

Corporate tax is set by Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses. It applies to financial years that started on or after 1 June 2023. For a company with a calendar year, the first tax period ran from 1 January to 31 December 2024; a company with a 30 June year end started on 1 July 2023. The Ministry of Finance writes the policy and the Federal Tax Authority runs registration, returns and payments through its EmaraTax portal.

The tax is self-assessed. You start from the profit in your financial statements, make the adjustments the law requires, apply the rates, and report the result in your return. Nobody sends you a bill first.

Taxable persons fall into a few groups. UAE companies and other juridical persons, whether on the mainland or in a free zone, are taxable from day one regardless of profit. Foreign companies are taxable if they are effectively managed from the UAE or have a permanent establishment here. Natural persons (sole proprietors, freelancers and individual partners) are taxable only when their business turnover in a calendar year passes AED 1 million. Salary, personal investment income and rent from property held in your own name don't count towards that threshold.

Some entities are exempt or can apply to be exempt: government bodies and government-controlled entities, businesses extracting natural resources (which are taxed at emirate level), qualifying public benefit entities, qualifying investment funds and pension funds. Withholding tax exists in the law but is set at 0%, so you don't deduct anything from payments to overseas suppliers.

UAE corporate tax at a glance (2026)

0%

Taxable income up to AED 375,000

9%

Taxable income above AED 375,000

AED 3 million

Small Business Relief revenue limit

to 31 December 2029

9 months

File and pay after year end

AED 10,000

Late registration penalty

waiver available

Corporate tax rates and how the tax is calculated

The rate structure is short. The first AED 375,000 of taxable income in each tax period is taxed at 0%, and the excess is taxed at 9%. So a company with AED 375,000 of taxable income pays nothing, and one with AED 1 million pays 9% of AED 625,000, which is AED 56,250. The 0% band is not a turnover threshold; it applies to profit after adjustments.

Two other rates matter for specific businesses. A Qualifying Free Zone Person pays 0% on qualifying income and 9% on non-qualifying income, with no AED 375,000 band on the taxable part. And since financial years starting on or after 1 January 2025, the Domestic Minimum Top-up Tax lifts the effective rate to 15% for members of multinational groups with global revenue of at least EUR 750 million in two of the previous four years. That second rule doesn't touch owner-managed SMEs.

From accounting profit to taxable income

Taxable income is your accounting net profit, prepared under IFRS (or IFRS for SMEs where allowed), adjusted for the items the law treats differently. The adjustments a typical small company meets are:

• Entertainment: only 50% of the cost of entertaining clients, suppliers and shareholders is deductible, so you add back the other half.
• Expenses not for business: personal costs paid by the company and costs that relate to exempt income are added back.
• Interest: net interest expense is deductible up to AED 12 million, or 30% of tax-adjusted EBITDA if that is higher. Most SMEs never get near the limit.
• Losses brought forward: earlier tax losses can reduce the current year's taxable income by up to 75%. For an unlisted company, the same owners must hold at least 50% from the loss year to the year of use.
• Exempt income: qualifying dividends and gains on qualifying shareholdings are removed from taxable income.

Here is how that works for a mainland trading company with a calendar year.

Al Noor's revenue is AED 4.2 million, so Small Business Relief isn't available. Its effective rate on accounting profit is about 4.5%, because the first AED 375,000 is taxed at 0% and the loss shelters another AED 100,000. Try your own figures in the UAE corporate tax calculator.

Who must register and the registration deadlines

Registration is mandatory for every taxable person, including companies that expect to make a loss or to claim Small Business Relief. You register on EmaraTax, it costs nothing, the form takes about 25 minutes, and the FTA aims to process complete applications within 20 business days. You'll need your trade licence (and any branch licences), the certificate of incorporation or memorandum of association, Emirates ID and passport copies for anyone owning more than 25% and for the authorised signatory, and proof of the signatory's authority.

The deadlines come from FTA Decision No. 3 of 2024, which took effect on 1 March 2024:

• Companies incorporated on or after 1 March 2024 (mainland or free zone): within 3 months of the date of incorporation.
• Foreign companies effectively managed in the UAE: within three months of the end of their financial year.
• Non-residents with a UAE permanent establishment created after 1 March 2024: within six months of the PE existing.
• Resident natural persons whose business turnover passes AED 1 million: by 31 March of the following year. The first such deadline was 31 March 2025 for turnover in 2024.
• Companies that already existed on 1 March 2024 had deadlines between 31 May and 31 December 2024 set by the month their licence was issued, regardless of the year. All of those dates have passed, so any such company that hasn't registered is already late.

The AED 10,000 late registration penalty and the waiver

Registering after your deadline triggers an administrative penalty of AED 10,000. The penalty is the same whether you are one week or one year late, which is why so many small companies were caught: plenty of owners assumed a company with no profit didn't need to register.

In April 2025 the government introduced a waiver. The FTA cancels the penalty automatically if the late registrant files its tax return, or annual declaration for an exempt person, within 7 months of the end of its first tax period, rather than the normal nine. It applies to penalties imposed from 1 June 2023 onwards, covers taxable persons and certain exempt persons, and applies only to the first tax period. If you've already paid, the FTA adds an equal credit to your EmaraTax account, which you can use against other tax or ask to have refunded. According to an FTA update on 14 May 2026, more than 68,600 taxpayers had benefited and the authority expected the number to pass 91,000.

Example: Sara set up a Dubai mainland design studio in January 2025. Her registration deadline was April 2025, but she registered in August 2025 and was charged AED 10,000. Her first tax period ended on 31 December 2025, so the normal filing deadline is 30 September 2026. If she files by 31 July 2026, seven months after year end, the penalty is wiped. If she files in September, she's on time for the return but loses the waiver.

Small Business Relief to 2029

Small Business Relief (SBR) lets a resident taxable person treat itself as having no taxable income for a tax period, provided its revenue is AED 3 million or less in that period and in every earlier tax period. It was originally due to end with periods finishing on 31 December 2026. On 7 August 2026 the Ministry of Finance announced Ministerial Decision No. 131 of 2026, which extends it to tax periods ending on or before 31 December 2029. Many guides published before August 2026 still give the old end date.

The conditions in Ministerial Decision No. 73 of 2023 still apply. The test is revenue, not profit, so a company with AED 3.2 million of sales and a thin margin doesn't qualify. Once revenue goes over AED 3 million in any period, you can't use SBR in later periods even if sales fall back. Qualifying Free Zone Persons and members of multinational groups with consolidated revenue above AED 3.15 billion are excluded. If the FTA finds that a business was artificially split to keep each part under the limit, the general anti-abuse rule can deny the relief.

You don't apply in advance: you elect SBR in the return for each period. You still have to register, keep records and file on time. What you give up is the ability to carry forward any tax loss or disallowed interest from a period in which you elect SBR. That makes the choice a real decision in a start-up's loss-making years.

Same company, with and without Small Business Relief

	Elect SBR	Don't elect SBR
Revenue AED 2.4m, taxable profit AED 600,000	Tax: AED 0	Tax: (600,000 − 375,000) × 9% = AED 20,250
Revenue AED 1.1m, tax loss AED 180,000	Tax: AED 0, loss is lost	Tax: AED 0, loss carried forward
Transfer pricing disclosure form	Not needed	Needed if related-party deals pass AED 40 million
Losses from this period	Can't be carried forward	Carried forward, up to 75% of later taxable income

Revenue AED 2.4m, taxable profit AED 600,000

Elect SBR

Tax: AED 0

Don't elect SBR

Tax: (600,000 − 375,000) × 9% = AED 20,250

Revenue AED 1.1m, tax loss AED 180,000

Elect SBR

Tax: AED 0, loss is lost

Don't elect SBR

Tax: AED 0, loss carried forward

Transfer pricing disclosure form

Elect SBR

Not needed

Don't elect SBR

Needed if related-party deals pass AED 40 million

Losses from this period

Elect SBR

Can't be carried forward

Don't elect SBR

Carried forward, up to 75% of later taxable income

In the loss year, electing SBR saves nothing, because no tax is due either way, and it throws away AED 180,000 of losses that could shelter future profits. A common pattern is to skip SBR in loss years and elect it once the business is profitable but still under the revenue limit.

Free zone companies and Qualifying Free Zone Persons

Free zone companies are inside the corporate tax system. They register within the same 3 months as mainland companies and file the same return. What differs is the chance to be a Qualifying Free Zone Person (QFZP), taxed at 0% on qualifying income.

To qualify, the company must keep adequate substance in the free zone, earn qualifying income, not elect to be taxed at the standard rates, comply with transfer pricing rules, and prepare audited financial statements. Qualifying income broadly means income from qualifying activities listed in Ministerial Decision No. 229 of 2025, such as manufacturing, processing, logistics, distribution from designated zones, fund management, and headquarters or treasury services to related parties, plus certain transactions with other free zone persons. Transactions with individuals are an excluded activity.

The de minimis rule is tight. If non-qualifying revenue goes over 5% of total revenue or AED 5 million, whichever is lower, the company loses QFZP status for 5 tax periods: the failing period and the four that follow. During that time it is taxed like a mainland company. A QFZP also can't elect Small Business Relief.

In practice, many free zone consultancies, agencies and e-commerce sellers earn mostly non-qualifying income and end up under the standard rules, often with SBR. Industrial and logistics businesses are the ones most likely to benefit from 0%. Our guides to JAFZA, DAFZA, Meydan Free Zone, Ajman Free Zone and Hamriyah Free Zone explain what each zone suits, and our Dubai business setup guide compares free zone and mainland.

Tax groups, related parties and transfer pricing

If you own several UAE companies, you can apply to the FTA to form a tax group. The parent must be UAE-resident and hold at least 95% of each member's share capital, voting rights, and entitlement to profits and net assets. All members need the same financial year and accounting standards, and none can be an exempt person or a QFZP. The group files one return, losses in one company offset profits in another, and transactions between members are ignored. The trade-off is that the group gets only one AED 375,000 0% band, and every member is jointly liable for the group's tax.

Without a group, each company files on its own, and dealings between related companies must be priced at arm's length, meaning what unrelated parties would agree. This catches many family businesses: a director's rent-free use of a company villa, a sister company charging no management fee, or interest-free loans between affiliates can all be adjusted by the FTA.

Paperwork scales with size. You file a transfer pricing disclosure form with your return if your transactions with related parties add up to more than AED 40 million in the period. Payments to connected persons, such as owners and directors, are reported once they pass AED 500,000. A master file and local file are needed only if your revenue is at least AED 200 million or you belong to a multinational group with revenue of AED 3.15 billion or more. Those files must be handed over within 30 days of an FTA request.

Filing and paying your corporate tax return

The return for each tax period is due within 9 months of the period's end, and payment is due on the same day. With a 31 December 2025 year end, that is 30 September 2026. With a 31 March 2026 year end, it's 31 December 2026. There are no instalments or advance payments during the year.

How to file a UAE corporate tax return

1. 1

   Close your books and prepare financial statements

   Prepare IFRS-based accounts for the period. Audited statements are required for QFZPs and for businesses with revenue above AED 50 million; check whether your free zone also requires an audit for its licence renewal.

2. 2

   Work out taxable income

   Start from net profit, add back non-deductible items such as half of entertainment, remove exempt income, and apply losses up to the 75% cap. Decide whether to elect Small Business Relief.

3. 3

   Log in to EmaraTax

   Open your Corporate Tax account and choose the return for the right tax period. The return walks you through income, adjustments, reliefs and elections.

   Open EmaraTax
4. 4

   Attach disclosures

   Add the transfer pricing disclosure form if related-party transactions exceed AED 40 million, and upload financial statements where required.

5. 5

   Submit and pay by the deadline

   Submit within 9 months of year end and pay the tax due through EmaraTax by the same date. Keep records for at least seven years.

   Tip: If you're claiming the late-registration waiver, file within 7 months instead.

Penalties follow Cabinet Decision No. 75 of 2023 as amended. A late return costs AED 500 for each month or part month for the first 12 months, then AED 1,000 a month after that. Tax paid late is charged at 14% a year, calculated monthly on the unpaid amount from the day after the due date. On Al Noor's AED 40,050, three months late works out to roughly AED 1,400 of late-payment penalty plus AED 1,500 for the late return. Separate penalties apply for not keeping records, for errors in a submitted return, and for not deregistering when a business closes.

If you find an error after filing, submit a voluntary disclosure through EmaraTax. Penalties are lower when you correct a mistake before the FTA starts an audit.

Common mistakes and how to fix them

The most expensive mistake is still not registering because the company made no money. Registration is required for every company and isn't linked to profit. If you're late, register now, then file your first return within 7 months of your first period's end to remove the penalty.

The second is reading the AED 375,000 band as a turnover threshold. It applies to taxable profit. A company with AED 2 million of sales and AED 300,000 of profit owes no tax, but it still registers and files.

Corporate tax checks for every financial year

0/5

• Corporate Tax Registration Number issued and details (name, activities, year end) up to date on EmaraTax
• Revenue for the period compared with AED 3 million — and with every earlier period
• Related-party and owner transactions listed and priced at arm's length
• Entertainment, personal and non-business costs added back
• Return filed and tax paid within 9 months — or 7 months if you need the waiver

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Third, assuming a free zone licence means 0% tax. Selling services to mainland companies or to individuals usually makes income non-qualifying, and crossing the de minimis limit costs QFZP status for five periods. Model your income mix before you rely on 0%.

Fourth, electing Small Business Relief in a loss year, which throws away losses you could use later. Fifth, forgetting arm's-length pricing on deals with owners and sister companies, especially rent-free premises and interest-free loans. Sixth, missing a change of financial year or licence details: tell the FTA through EmaraTax within the required time when the legal name, address, activities or financial year change.

Finally, deregistering incorrectly. When you close or liquidate a company, apply to deregister for corporate tax and file a final return. A cancelled trade licence alone doesn't close your FTA account, and penalties keep running until it is closed.

How UAE corporate tax fits with VAT and other obligations

Corporate tax is separate from VAT. VAT registration depends on taxable supplies above AED 375,000 (voluntary from AED 187,500) and is charged at 5%. A small company can be registered for corporate tax but not for VAT, and many are. Use the UAE VAT calculator for invoice maths.

Corporate tax also doesn't replace emirate-level fees, licence renewals or free zone charges. For a full picture of setup costs see our UAE business licence guide. If you work for yourself as an individual, the AED 1 million turnover test is the one to watch. Our freelance visa Dubai guide explains how it applies to permit holders.

Official links

• FTA — Corporate Tax registrationWho registers, documents, AED 10,000 penalty and waiver
• EmaraTax portalRegister, file returns, pay, deregister
• Ministry of Finance — Corporate TaxLaw, decisions and overview
• MoF — Small Business Relief extended to 2029Ministerial Decision No. 131 of 2026
• Cabinet Decision No. 75 of 2023 — penaltiesLate filing and late payment penalties
• Ministerial Decision No. 229 of 2025 — qualifying activitiesFree zone 0% rules

What to do next

Check three dates today: when your company was incorporated (to see if you registered on time), when your financial year ends (your return is due 9 months later), and, if you registered late, the 7 months waiver cut-off. Then estimate your bill with the UAE corporate tax calculator and decide, period by period, whether Small Business Relief helps. If you're still choosing where to set up, compare free zone and mainland in our Dubai business setup guide.

This is general information, not legal or tax advice — confirm on the official source or with a professional.

Frequently asked questions

What is the corporate tax rate in the UAE?

Taxable income up to AED 375,000 is taxed at 0% and anything above it at 9%. A Qualifying Free Zone Person pays 0% on qualifying income and 9% on the rest. Large multinational groups with global revenue of at least EUR 750 million also face a 15% Domestic Minimum Top-up Tax for financial years starting on or after 1 January 2025.

Do I need to register for corporate tax if my company makes no profit?

Yes. Every company and other juridical person that is a taxable person must register with the Federal Tax Authority on EmaraTax and get a Corporate Tax Registration Number, whatever its profit. Registration is free. A loss-making company still files a return within 9 months of its year end, and the return is how it records the loss to carry forward.

What is the penalty for late corporate tax registration in the UAE?

The FTA charges AED 10,000. Under the waiver initiative, the penalty is cancelled automatically if you file the return for your first tax period within 7 months of the period's end instead of the usual nine. If you already paid it, the FTA credits the amount to your EmaraTax account. The waiver covers the first tax period only.

Who qualifies for Small Business Relief?

UAE-resident taxable persons whose revenue is AED 3 million or less in the current tax period and every earlier one, for tax periods ending by 31 December 2029. Qualifying Free Zone Persons and members of large multinational groups can't use it. You elect it in the return, pay no corporate tax and get simpler reporting, but you can't carry forward losses from those periods.

Do freelancers and sole proprietors pay UAE corporate tax?

Only if their business turnover in a calendar year exceeds AED 1 million. Salary, personal investment income and income from personally held real estate don't count towards that figure. Above it, the individual registers by 31 March of the following year, files a return and pays 9% on taxable income over AED 375,000.

When is the UAE corporate tax return due?

Within 9 months of the end of the tax period, and the tax must be paid by the same date. A company with a calendar financial year ending 31 December 2025 must file and pay by 30 September 2026; one with a 31 March 2026 year end has until 31 December 2026. Late filing costs AED 500 a month for the first year.

Sources & verification

Figures on this page were checked against the sources below when it was last reviewed on 8 October 2026. Each rate and limit is stored once with its own official source and review date, and official update channels are monitored daily so changes are picked up. How we verify

1. 1.Corporate Tax — overview — UAE Ministry of Finance · accessed 8 October 2026
2. 2.Ministry of Finance confirms applicable taxable income threshold for Corporate Tax — UAE Ministry of Finance · accessed 8 October 2026
3. 3.Corporate Tax Registration — Federal Tax Authority (UAE) · accessed 8 October 2026
4. 4.FTA expects number of beneficiaries from Corporate Tax late registration penalty waiver initiative to rise to 91,000 — Federal Tax Authority (UAE) · accessed 8 October 2026
5. 5.Ministry of Finance announces extension of Small Business Relief until 31 December 2029 — UAE Ministry of Finance · accessed 8 October 2026
6. 6.Cabinet Decision No. 75 of 2023 and its amendments on Administrative Penalties (Corporate Tax) — UAE Ministry of Finance · accessed 8 October 2026
7. 7.Ministerial Decision No. 229 of 2025 regarding Qualifying Activities and Excluded Activities — UAE Ministry of Finance · accessed 8 October 2026
8. 8.Timelines for Corporate Tax registration specified (FTA Decision No. 3 of 2024) — KPMG Lower Gulf · accessed 8 October 2026
9. 9.Ministerial Decision No. 73 of 2023 on Small Business Relief (summary) — Deloitte Middle East · accessed 8 October 2026
10. 10.United Arab Emirates — Corporate: group taxation and transfer pricing — PwC Worldwide Tax Summaries · accessed 8 October 2026
11. 11.United Arab Emirates — Corporate: deductions — PwC Worldwide Tax Summaries · accessed 8 October 2026
12. 12.Ministerial Decision No. 82 of 2023 (audited financial statements) — UAE Ministry of Finance · accessed 8 October 2026
13. 13.UAE implements Pillar Two — PwC Middle East · accessed 8 October 2026