Corporate Tax Rate
The UAE Corporate Tax Rate: 0%, 9% and When 15% Applies
There is no single UAE corporate tax rate, which is why the question keeps getting answered badly. There are three, they apply to different things, and the one that applies to you depends on where your profit comes from rather than on where your office is.
- The rate that applies to your structure, confirmed
- The AED 375,000 band applied correctly
- Free zone qualifying income tested, not assumed
- Top-up tax scoped out where it does not apply
Dubai-based, FTA-aware corporate tax support for UAE businesses.
Last reviewed against current FTA guidance.
Quick Answer
UAE corporate tax is charged at 0% on taxable income up to AED 375,000 and 9% on taxable income above that threshold. A Qualifying Free Zone Person pays 0% on qualifying income and 9% on the rest. Large multinational groups with consolidated revenue of at least EUR 750 million are subject to a domestic minimum top-up tax bringing their effective rate to 15% for financial years starting on or after 1 January 2025.
The 9% Is Not On Turnover
This gets misread constantly. The 9% applies to taxable income, which is accounting profit after the adjustments the law requires. It is not revenue, and it is not the figure at the bottom of the management accounts before anyone has looked at it.
A company with AED 8 million of revenue and AED 300,000 of taxable income pays nothing. A company with AED 900,000 of revenue and AED 700,000 of taxable income pays 9% on AED 325,000.
- The base is taxable income, not turnover
- Accounting profit is adjusted before the rate is applied
- The first AED 375,000 of taxable income is taxed at 0%
- 9% applies only to the excess
- One threshold per taxable person, not per activity
A Worked Example
Take a Dubai mainland trading company with accounting profit of AED 1,000,000 for the year. Add back AED 40,000 of non-deductible expenditure. Deduct AED 100,000 of exempt income. Taxable income is AED 940,000.
The first AED 375,000 is taxed at 0%. The remaining AED 565,000 is taxed at 9%, giving AED 50,850. Illustrative only: it assumes no losses brought forward, no Small Business Relief, no free zone claim and no other reliefs.
- Accounting profit: AED 1,000,000
- Add back non-deductible expenditure: AED 40,000
- Less exempt income: AED 100,000
- Taxable income: AED 940,000
- Tax: AED 565,000 at 9% = AED 50,850
The Free Zone 0%
The free zone rate is a different animal. It is 0% on qualifying income of a Qualifying Free Zone Person, and 9% on income that is not qualifying. There is no AED 375,000 band sitting under the 9% in that case.
And the 0% is conditional throughout: qualifying activity, substance in the zone, arm's length pricing, audited statements, and non-qualifying revenue below the de minimis limit. Lose one and the whole entity pays 9% for that period and the next four.
- 0% applies to qualifying income only
- Non-qualifying income is taxed at 9% with no band
- All QFZP conditions must hold at once
- De minimis: the lower of 5% of revenue or AED 5 million
- A failed condition costs five tax periods
Where 15% Comes In
The domestic minimum top-up tax applies to multinational groups with consolidated revenue of at least EUR 750 million in at least two of the four preceding financial years. It lifts the effective rate on their UAE profits to 15%, for financial years starting on or after 1 January 2025.
If that describes your group, you already have a Pillar Two workstream. If it does not, the 15% is not your rate and never becomes it by accident.
- EUR 750 million consolidated group revenue threshold
- Effective rate lifted to 15% on UAE profits
- Financial years starting on or after 1 January 2025
- Part of the global minimum tax framework
- Irrelevant to almost every UAE business
Rates That Reduce to Nothing
Two routes take a liability to zero without touching the rate. Small Business Relief treats the period as producing no taxable income where revenue stays at or below AED 3 million, and it now runs to periods ending on or before 31 December 2029. Exempt persons are outside the charge in the first place.
Both still require registration and, in the case of relief, a return with the election made in it.
- Small Business Relief: revenue at or below AED 3 million
- Available for periods ending on or before 31 December 2029
- Elected in the return, not granted automatically
- Exempt persons sit outside the charge entirely
- Registration and filing still apply in both cases
Working Out Which Applies to You
Start with the entity, not the rate. Resident or non-resident, mainland or free zone, standalone or part of a group, and what the income actually is. The rate falls out of those answers.
Most disputes we see are not about the rate at all. They are about the taxable income figure it was applied to.
- Residence and permanent establishment position
- Mainland or free zone, and the activity carried on
- Group membership and consolidated revenue
- Whether relief or exemption applies
- Then apply the rate to a computed figure
What is the UAE corporate tax rate?
0% on taxable income up to AED 375,000 and 9% on taxable income above it. A Qualifying Free Zone Person pays 0% on qualifying income and 9% on income that does not qualify.
Is 9% charged on revenue?
No. It is charged on taxable income, which is accounting profit after the adjustments the law requires. A high-revenue, low-margin business can pay nothing.
Does every company get the AED 375,000 band?
Each taxable person gets one. A tax group is a single taxable person, so a group of five companies shares one band rather than having five.
Do free zone companies pay 0%?
Only on qualifying income, and only while every Qualifying Free Zone Person condition holds. Non-qualifying income is taxed at 9% with no AED 375,000 band beneath it.
Who pays the 15% rate?
Multinational groups with consolidated revenue of at least EUR 750 million, under the domestic minimum top-up tax, for financial years starting on or after 1 January 2025.
Is there a rate for individuals?
The same rates apply where a natural person carries on a business in the UAE and turnover from that business exceeds AED 1 million in a calendar year. Employment income and personal investment income are outside the charge.
Can the rate go to zero another way?
Small Business Relief treats a qualifying period as producing no taxable income where revenue is AED 3 million or less, now for periods ending on or before 31 December 2029. It has to be elected in the return.
Is there a withholding tax on payments abroad?
The withholding tax rate is currently set at 0%, so no amount is withheld on the payments within its scope. That does not remove any related filing or documentation obligations.
Does the rate change if we make a loss?
There is no tax on a loss. The loss may be carried forward and set against future taxable income, subject to the restrictions that apply.
The rest of what we do
Licence, visas, bank account, books and the first tax return: handled by the same team, so the structure has to survive its first year.
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Corporate Tax Registration
Every taxable person must register, including free zone companies applying 0%.
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Corporate Tax Filing
Returns, elections and the qualifying income analysis behind them.
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Accounting & Bookkeeping
Books kept audit-ready from month one, not reconstructed at year end.
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Audit Preparation
Schedules, reconciliations and the evidence your auditor will ask for.
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Payroll & WPS
Payroll, WPS files and end-of-service calculated correctly.
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Tax Residency Certificate
Day-count position verified and the FTA document pack assembled.
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Customs Registration
Client code and Mirsal registration, before your first shipment, not after.
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ICV Certification
Score modelled and improved before the audit, not explained afterwards.
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The Rate Is the Easy Part
Getting the taxable income figure right is where the money is. We compute it, document the adjustments and file the return. Fixed fee, quoted in 24 hours.
