What Is the Corporate Tax Rate in the UAE?

The UAE corporate tax rate is 9%, and it applies only to taxable income above AED 375,000. Taxable income up to AED 375,000 is taxed at 0%. The regime is set by Federal Decree-Law No. 47 of 2022, applies to financial years starting on or after 1 June 2023, and is administered by the Federal Tax Authority.

The two headline rates

UAE corporate tax uses a simple two-tier structure. The first slice of taxable income is taxed at zero, and only the income above the threshold is taxed at the standard rate.

This structure is deliberately designed to keep the burden light on small businesses and startups, while bringing the UAE into line with international tax norms. The 9% headline rate remains one of the lowest of any major economy.

How the AED 375,000 threshold works

The threshold is a band, not a relief you apply for. Every business within the regime gets its first AED 375,000 of taxable income taxed at 0%, and pays 9% only on the portion above that.

For example, a business with taxable income of AED 500,000 does not pay 9% on the whole amount. It pays 0% on the first AED 375,000 and 9% on the remaining AED 125,000, a corporate tax bill of AED 11,250.

You can estimate your own figure with our free UAE Corporate Tax Calculator.

It is also important to note that the 9% is charged on taxable income, which is broadly your accounting profit adjusted for specific tax rules, not on your revenue. Turnover is not what is taxed, profit is.

Free zones and the 0% qualifying rate

Free zone businesses are not outside the corporate tax system. They must register and file like any other business. What a free zone can offer is a 0% rate on qualifying income, available to a Qualifying Free Zone Person that meets all the relevant conditions, including maintaining adequate substance and meeting the qualifying income rules. Any income that does not qualify is taxed at the standard 9%.

The takeaway is that a free zone licence does not automatically mean no tax. It means a business may access a 0% rate on part or all of its income if it satisfies the conditions, and registration and filing are still mandatory.

Small Business Relief

Separately from the 0% threshold, eligible businesses with revenue at or below AED 3 million can elect for Small Business Relief, which allows them to be treated as having no taxable income for the period. This relief must be actively elected in the tax return and is available for tax periods ending on or before 31 December 2026 under the current rules.

The 15% Domestic Minimum Top-up Tax

Large multinational groups face an additional layer. The UAE has introduced a Domestic Minimum Top-up Tax that ensures an effective tax rate of at least 15% for groups with consolidated global revenue of EUR 750 million or more in at least two of the four preceding financial years. It applies to financial years starting on or after 1 January 2025 and aligns the UAE with the OECD global minimum tax framework.

This affects only very large multinationals. The vast majority of UAE businesses are not in scope and continue to be taxed under the standard 0% and 9% structure. Free zone entities that belong to such a group can still fall within the top-up tax, even where their qualifying income is taxed at 0%, because the minimum-tax calculation works differently from standard corporate tax.

What this means for your business

For most businesses in the UAE, the position is straightforward: 0% on the first AED 375,000 of taxable income and 9% above it, with registration and filing obligations that apply regardless of whether any tax is due. The detail that catches businesses out is usually not the rate, it is the registration deadlines, the free zone conditions, and the adjustments that turn accounting profit into taxable income.