UAE corporate tax is 0% on taxable income up to AED 375,000 and 9% on the part above it. Small Business Relief lets a qualifying business with revenue up to AED 3 million be treated as having no taxable income, but only for tax periods that end on or before 31 December 2029. Free zone companies have a separate regime.
Facts checked: 16 October 2026 against the Federal Tax Authority's corporate tax guides and Small Business Relief page; the end date was updated on 17 October 2026 after the Ministry of Finance extended the relief (Ministerial Decision No. 131 of 2026, announced 7 August 2026), as reported by The National, Khaleej Times and other outlets. We did not open the decision text. This is a general guide, not tax advice; confirm against the FTA before you rely on it.
The rates
| Taxable income | Rate |
|---|---|
| Up to AED 375,000 | 0% |
| Above AED 375,000 | 9% |
Taxable income is accounting profit adjusted by the rules in the corporate tax law. It is not the same as revenue.
Small Business Relief
A resident person can elect Small Business Relief if revenue is AED 3,000,000 or less in the current tax period and in all previous tax periods. A business that elects it is treated as having no taxable income for the period.
Points to know:
- It is time-limited. It is available for tax periods that end on or before 31 December 2029, after the Ministry of Finance extended the earlier 31 December 2026 cut-off.
- It is an election. A business has to choose it, and the choice affects how losses are treated. Read the FTA guide before electing.
- Some are excluded. Qualifying Free Zone Persons, and members of very large multinational groups (consolidated revenue of about AED 3.15 billion), cannot use it.
Free zone companies
A Qualifying Free Zone Person gets 0% on qualifying income. Income that is not qualifying income is taxed at 9%. A qualifying free zone person does not get the 0% band up to AED 375,000. The test for non-qualifying revenue allows the lower of AED 5,000,000 and 5% of total revenue.
A Qualifying Free Zone Person must prepare and keep audited financial statements, whatever its revenue. See audited financial statements for UAE corporate tax.
What to prepare, whichever group you are in
- Proper books for the whole tax period, not only year-end.
- Financial statements that follow the right standard. See the linked guide on audited statements and IFRS for SMEs.
- Revenue tracked from the first day. Several rules turn on revenue, so know the figure for every period, including past ones.
- Supporting evidence for every material balance and every adjustment you make to get from accounting profit to taxable income.
- A year-end close plan with dates for reconciliations, accruals and review, so the numbers are final before the return is due.
Frequently Asked Questions
What is the UAE corporate tax rate?
0% on taxable income up to AED 375,000 and 9% above that.
Who can use Small Business Relief?
A resident person with revenue of AED 3,000,000 or less in the current and all previous tax periods, for periods ending on or before 31 December 2029. Qualifying Free Zone Persons and members of very large multinational groups are excluded.
Is revenue the same as taxable income?
No. Revenue is the top line. Taxable income is accounting profit adjusted under the corporate tax law.
Do free zone companies pay corporate tax?
A Qualifying Free Zone Person pays 0% on qualifying income and 9% on other income. It does not get the 0% band up to AED 375,000.
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