Corporate tax registration in the UAE

Registration is mandatory, the rate is 9% above AED 375,000, and the free zone 0% everyone talks about is conditional rather than automatic. Here is what actually applies to your company.

At a glance

0% / 9%

Below and above AED 375,000

9 months

To file after financial year end

Mandatory

Even with no profit

The basics

How UAE corporate tax works

	Treatment
Taxable income up to AED 375,000	0%
Taxable income above AED 375,000	9% on the excess
Qualifying Free Zone Person, qualifying income	0%, subject to strict conditions
Qualifying Free Zone Person, non-qualifying income	9% above the threshold
Registration requirement	Mandatory for taxable persons, regardless of profit
Return deadline	Within 9 months of financial year end
Record retention	At least 7 years

Corporate tax is assessed on accounting profit adjusted for specific items — not on revenue, and not on what is left in the bank. Getting the bookkeeping right is what makes the tax position defensible.

Qualifying Free Zone Person

The conditions behind the 0% headline

Adequate substance in the zone. Core income-generating activities must actually take place there, with appropriate people, premises and expenditure. A flexi-desk and a laptop abroad is not substance.
Qualifying income. Only income falling within the categories defined in the Cabinet decisions qualifies. Much ordinary mainland-facing revenue does not.
De minimis threshold. Non-qualifying revenue must stay within the published limits. Exceed them and qualifying status is lost, potentially for several years.
Transfer pricing compliance. Transactions with related parties must be at arm's length and documented.
Audited financial statements. Required regardless of whether your free zone otherwise demands an audit.

What we do

Registration and beyond

Position assessment

We establish whether you are a taxable person, what your financial year is, whether qualifying free zone status is realistic, and whether Small Business Relief is worth electing.

Federal Tax Authority registration

Registration submitted through EmaraTax with the corporate documents and authorisations required, and the tax registration number issued.

Accounting setup

Books structured so that the annual computation can actually be prepared from them — including the analysis qualifying free zone status depends on.

Return preparation and filing

Annual computation, adjustments, the return itself, and the supporting file you would want to have if the FTA asks questions.

Questions

Corporate tax questions

Does every UAE company have to register for corporate tax?

Effectively yes. Registration with the Federal Tax Authority is mandatory for taxable persons, which includes mainland companies, free zone companies and, in defined circumstances, individuals conducting business. Making no profit does not exempt you from registering, and late registration carries an administrative penalty.

What is the corporate tax rate?

0% on taxable income up to AED 375,000 and 9% on taxable income above that threshold. A separate rate applies to large multinational groups within the OECD Pillar Two framework. Qualifying Free Zone Persons can achieve 0% on qualifying income, subject to strict conditions.

What is Small Business Relief?

An election available to eligible resident persons that allows simplified treatment where revenue stays within the published threshold. Importantly, eligibility is lost permanently if revenue exceeded AED 3 million in any tax period since 1 June 2023 — it does not return if revenue later falls. Whether to elect is a genuine decision, because electing means forgoing the ability to carry forward losses.

How does a free zone company get 0%?

By being a Qualifying Free Zone Person, which requires maintaining adequate substance in the zone, deriving qualifying income as defined in the Cabinet decisions, not exceeding the de minimis threshold for non-qualifying revenue, complying with transfer pricing rules, and preparing audited financial statements. Failing any condition means the standard rates apply, and in some cases for multiple years.

When is the return due?

Within nine months of the end of your financial year. For a company with a 31 December year end, that means 30 September of the following year. Payment is due by the same date.

Free consultation

Not sure where you stand on corporate tax?

Send us your licence date, financial year end and free zone. We will tell you whether you are registered, what is due, and whether the 0% claim you were sold is actually available to you.

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