Corporate tax arrived in the UAE for financial years starting on or after 1 June 2023. Three years on, we still meet founders who think it only applies to big companies. It doesn’t: every company has to register and file, even when it owes nothing.
The rates
- 0% on taxable profit up to AED 375,000.
- 9% on taxable profit above AED 375,000.
- A separate minimum tax applies to very large international groups, which won’t affect most of our clients.
So a consultancy with a taxable profit of AED 500,000 pays 9% on AED 125,000: AED 11,250 for the year.
Small business relief
If your revenue is AED 3 million or less in a tax period, you can choose to be treated as having no taxable income for that period. The relief is available for tax periods ending on or before 31 December 2026, so for most companies with a calendar year this is the last year to use it. You still register, keep records and file a return; you simply claim the relief on it.
Free zone companies
A company in a free zone can pay 0% on its qualifying income if it meets the conditions to be a qualifying free zone person: real substance in the zone, audited accounts, and income mostly from qualifying activities or other free zone businesses. Income that doesn’t qualify is taxed at 9%. It isn’t automatic, so it’s worth checking before you assume it.
Registration is not optional. A company that registers late pays a fixed penalty, even if it never owes a dirham of tax.
Deadlines
- Register with the Federal Tax Authority on EmaraTax by the deadline that applies to your licence date. We check yours on the first call.
- File your return and pay any tax within nine months of the end of your financial year.
- Keep your accounting records for seven years.
What to do now
If you haven’t registered, start there. If you have, look at your expected revenue for this year: if it’s close to AED 3 million, talk to your accountant before year end about whether small business relief still applies. Our accounting team handles registration for AED 750 and corporate tax returns from AED 2,500.
