The UAE's introduction of a 9% corporate tax on taxable profits exceeding AED 375,000 marks a landmark shift in the nation's fiscal landscape. Effective from financial years beginning on or after 1 June 2023, this tax applies to the vast majority of businesses operating in the UAE — but with important exemptions and reliefs that every business owner needs to understand.
The Core Rate Structure
| Taxable Income | Tax Rate |
|---|---|
| AED 0 – AED 375,000 | 0% |
| Above AED 375,000 | 9% |
| Qualifying Freezone Income (QFZP) | 0% |
| Multinationals (Pillar Two, revenue > EUR 750M) | 15% (Pillar Two minimum) |
Who Is Exempt?
- Government entities and wholly government-owned companies
- Extractive businesses subject to Emirate-level taxation
- Qualifying freezone persons (QFZP) — 0% on qualifying income
- Small Business Relief — businesses with revenue ≤ AED 3 million can elect to be treated as having no taxable income (available for tax periods ending on or before 31 December 2026)
- Natural persons — personal income, salary, and investment returns are not subject to corporate tax
Compliance Requirements
All UAE businesses must register with the Federal Tax Authority (FTA) for corporate tax — even those expecting to pay 0%. Key compliance steps include:
- Register with the FTA within 3 months of your financial year start
- Maintain proper accounting records in line with IFRS or IFRS for SMEs
- File annual corporate tax returns within 9 months of the end of your tax period
- Pay any tax due by the return filing deadline
Late registration and filing carry penalties. For help ensuring your business is fully compliant, see our corporate tax advisory service.
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