What is
UAE Corporate Tax?

What are the rates?

UAE Corporate Tax operates on a tiered structure:

• 0% on taxable income up to AED 375,000.
• 9% on taxable income above AED 375,000 (the headline rate).
• 0% on Qualifying Income of Qualifying Free Zone Persons (subject to the five tests including substance and de minimis).
• 15% top-up under QDMTT for multinational groups within Pillar Two scope (consolidated revenue at or above EUR 750M).

Who needs to register?

Almost every UAE business needs to register with the Federal Tax Authority (FTA) for Corporate Tax. This includes mainland LLCs, free zone entities (including QFZP-eligible entities), natural persons conducting business above the AED 1M turnover threshold, and most other juridical persons. Specific exemptions apply for government entities, qualifying investment funds, pension funds and certain other categories.

How is taxable income calculated?

Taxable income is generally accounting profit per IFRS-compliant financial statements, adjusted for specific items including: interest expense restrictions (thin capitalisation rules), entertainment expense limitations, related-party transaction pricing (transfer pricing rules apply at arm's length), tax-loss carry-forward (up to 75% offset, indefinite carry-forward), and various other adjustments.

What is Small Business Relief?

Small Business Relief is an election available to UAE-resident taxpayers with revenue under AED 3 million for the relevant tax period (and all previous tax periods). Where elected, the entity is treated as having no taxable income for that period. The relief is currently available for tax periods ending on or before 31 December 2026, subject to extension by Cabinet Decision.

What about transfer pricing?

UAE Corporate Tax requires related-party transactions to be priced at arm's length. The transfer pricing framework follows OECD principles, with documentation requirements scaling by revenue and transaction value. Master File and Local File obligations apply above defined thresholds.

When are returns due?

Corporate Tax returns are due within nine months of the end of the relevant tax period. Most businesses operate on a calendar-year basis with returns due by 30 September of the following year. Tax payments are due at the same time as the return.