- Corporate tax
- 9% above AED 375,000
- VAT rate
- 5%
- VAT must-register
- over AED 375,000 a year
- Who registers for CT
- Every company
Corporate tax: the basics
UAE corporate tax applies to financial years starting on or after 1 June 2023. For most businesses:
| Taxable profit | Rate |
|---|---|
| Up to AED 375,000 | 0% |
| Above AED 375,000 | 9% |
| Qualifying income of a Qualifying Free Zone Person | 0% |
Very large multinational groups are subject to additional minimum-tax rules, which don't apply to most new companies.
Registering for corporate tax
Every company must register, including free zone companies and companies that expect to pay no tax. Registration is done through the Federal Tax Authority's EmaraTax portal, and you receive a Tax Registration Number (TRN). New companies generally need to register within three months of incorporation, and late registration carries a fixed penalty. Check the current deadline for your company with us or the FTA.
Tip: register as part of your company setup so it isn't forgotten. It's included in our Spark, Glow and Radiance plans.
Free zone companies and the 0% rate
A free zone company can be treated as a Qualifying Free Zone Person (QFZP) and pay 0% on its qualifying income if, among other conditions, it:
- maintains adequate substance in the free zone (real activity, staff and assets)
- earns qualifying income, as defined in the rules
- keeps non-qualifying income within the allowed limit
- prepares audited financial statements
- follows the transfer pricing rules for related-party transactions
Income that doesn't qualify is taxed at 9%. Whether your income qualifies depends on your activities and customers, so it's worth reviewing before you choose a free zone.
Small Business Relief
Resident businesses with revenue of AED 3 million or less in a tax period may elect Small Business Relief and be treated as having no taxable income for that period. The relief applies to tax periods ending on or before 31 December 2026, so check whether it still applies to your first tax period. You still need to register and file a return.
Returns and record-keeping
- File your corporate tax return and pay any tax within 9 months of the end of your tax period.
- Keep accounting records and supporting documents for at least 7 years.
- Prepare financial statements to accepted accounting standards. Some companies must have them audited.
VAT: when you must register
| Your taxable supplies and imports | VAT registration |
|---|---|
| Over AED 375,000 in the last 12 months, or expected in the next 30 days | Mandatory |
| Over AED 187,500 (or expenses over this amount) | Voluntary |
| Below AED 187,500 | Not eligible |
Once registered, you charge 5% VAT on taxable sales, can recover VAT on most business purchases, and file returns, usually every quarter, within 28 days of the period end. Some supplies, such as certain exports and international services, are zero-rated.
Checklist for your first year
- Register for corporate tax and note your TRN and tax period.
- Track taxable sales monthly so you know when VAT registration becomes mandatory.
- Set up bookkeeping from your first invoice.
- If you're in a free zone, check whether your income can qualify for 0%.
- Diary your filing deadlines and licence renewal date.
This guide is general information based on the rules at the time of writing and is not tax advice. Tax law, deadlines and thresholds can change; confirm your position with a registered tax agent or the Federal Tax Authority.
