In short: UAE corporate tax is charged at 0% on taxable income up to AED 375,000 and 9% on taxable income above that. A Qualifying Free Zone Person pays 0% on qualifying income and 9% on the rest. Large multinational groups with consolidated revenue of EUR 750 million or more are subject to a 15% Domestic Minimum Top-up Tax for financial years starting on or after 1 January 2025. Individuals pay corporate tax only on business income above AED 1 million a year.
The standard rates: 0% and 9%
Cabinet Decision No. 116 of 2022 sets the threshold at which the 9% rate starts. For a UAE company or other taxable person:
- 0% on the portion of taxable income up to AED 375,000; and
- 9% on the portion of taxable income above AED 375,000.
The 0% band applies to the first AED 375,000 of every taxable person’s income, not only to small businesses. A company earning AED 5 million still pays nothing on its first AED 375,000.
Worked example
A Dubai trading company has taxable income of AED 1,000,000 for its tax period.
| Band | Taxable income | Rate | Tax |
|---|---|---|---|
| Up to AED 375,000 | AED 375,000 | 0% | AED 0 |
| Above AED 375,000 | AED 625,000 | 9% | AED 56,250 |
| Total | AED 1,000,000 | AED 56,250 |
Taxable income is not the same as accounting profit. It starts from the profit in your financial statements and is then adjusted, for example for exempt income, disallowed expenses and interest limits. Getting those adjustments right is where most of the tax value lies.
Free zone companies: 0% on qualifying income
A free zone company that meets the conditions to be a Qualifying Free Zone Person pays:
- 0% on its qualifying income; and
- 9% on income that is not qualifying income.
Being in a free zone is not enough on its own. The conditions include adequate substance in the free zone and limits on non-qualifying revenue. If a company fails the conditions, it loses the 0% rate. Our guide to corporate tax for free zone companies explains the conditions.
Large multinationals: the 15% minimum
Federal Decree-Law No. 60 of 2023 gave the Cabinet the power to impose a top-up tax so that large multinational groups pay an effective rate of 15%. Cabinet Decision No. 142 of 2024 introduced the Domestic Minimum Top-up Tax (DMTT) for financial years starting on or after 1 January 2025.
It applies to members of multinational groups with consolidated revenue of EUR 750 million or more in at least two of the four preceding financial years. If such a group’s effective tax rate in the UAE is below 15%, it pays a top-up to bring it to 15%. The FTA published a guide on the scope of the top-up tax and registration for it in October 2026. Groups that may be in scope should check their registration and filing deadlines now.
Individuals: only business income above AED 1 million
Under Cabinet Decision No. 49 of 2023, an individual is subject to corporate tax only if the turnover from their business or business activities in the UAE exceeds AED 1 million in a calendar year. Salary, personal investment income and real estate investment income are excluded, as long as the investment activity does not need a licence. There is no personal income tax in the UAE.
Small Business Relief
Resident businesses with revenue of AED 3 million or less can elect for Small Business Relief and be treated as having no taxable income. In August 2026, the Ministry of Finance extended the relief to tax periods ending on or before 31 December 2029, under Ministerial Decision No. 131 of 2026. The relief must be elected in the tax return and some businesses are excluded. Our guide to Small Business Relief explains who qualifies.
Frequently asked questions
What is the corporate tax rate in the UAE?
0% on taxable income up to AED 375,000 and 9% on taxable income above AED 375,000.
How much corporate tax is due on AED 1 million of taxable income?
AED 56,250. The first AED 375,000 is taxed at 0% and the remaining AED 625,000 at 9%.
Do free zone companies pay corporate tax?
A Qualifying Free Zone Person pays 0% on qualifying income and 9% on other income. A free zone company that does not meet the conditions pays the standard rates.
Who pays the 15% rate?
Members of multinational groups with consolidated revenue of EUR 750 million or more in at least two of the four preceding financial years, through the Domestic Minimum Top-up Tax, for financial years starting on or after 1 January 2025.
Do I still need to register and file if my income is below AED 375,000?
Yes. Taxable persons must register for corporate tax and file a return even if no tax is payable.
Get help from Alif
Alif is an accounting and tax firm in Dubai, with a tax team led by an FTA-registered Tax Agent. We calculate taxable income, check reliefs and free zone status, and prepare and file your corporate tax return. Book a free consultation to discuss your position.