The short answer
UAE corporate tax is 0% on the first AED 375,000 of taxable income and 9% on the rest. Start from accounting profit, adjust for non-deductible items and exempt income, then apply the rates. A company with AED 1 million taxable income pays 9% of AED 625,000, which is AED 56,250.
What are the corporate tax rates?
0% on taxable income up to AED 375,000 and 9% above it, under Cabinet Decision No. 116 of 2022 (UAE Ministry of Finance). The band applies per taxable person per tax period, so groups cannot multiply it by splitting into many companies without commercial reason.
How do you get from profit to taxable income?
Begin with net profit in the financial statements. Add back expenses the law does not allow, such as fines, 50% of client entertainment and donations to non-qualifying bodies. Remove exempt income such as qualifying dividends. Apply interest limits where net interest is large. The result is taxable income; losses brought forward can then reduce it within the legal limits.
“the 9% on your non-qualifying income has no AED 375,000 tax-free band”
Worked example: a mainland trading company
Accounting profit of AED 950,000, with AED 50,000 of non-deductible entertainment and fines added back, gives taxable income of AED 1,000,000. The first AED 375,000 is taxed at 0%; the remaining AED 625,000 at 9% gives AED 56,250 (Cabinet Decision No. 116 of 2022). Our calculator runs the same steps.
How is a free zone company taxed?
A Qualifying Free Zone Person pays 0% on qualifying income and 9% on non-qualifying income, with no AED 375,000 band on the non-qualifying part (Meydan Free Zone Authority). If non-qualifying revenue passes the de minimis limit, the whole company moves to standard rates for five years (Ministry of Finance via WAM).
When does Small Business Relief change the answer?
When revenue is AED 3 million or less in the period and every earlier one. Electing the relief treats taxable income as nil for periods ending on or before 31 December 2029 (Ministry of Finance via Aletihad). A company with AED 2.5 million revenue and AED 600,000 taxable income would otherwise pay AED 20,250.
Frequently asked questions
Is UAE corporate tax 9% of all profit?
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No. The first AED 375,000 of taxable income is taxed at 0%.
Are dividends from UAE companies taxable?
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Dividends from UAE resident companies are generally exempt.
Can losses be carried forward?
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Yes, subject to limits on how much of each year's taxable income they can offset.
Sources
- Cabinet Decision No. 116 of 2022 on the annual Taxable Income subject to Corporate Tax (AED 375,000) — UAE Ministry of Finance. Checked 16 October 2026.
- Qualifying vs non-qualifying income under UAE Corporate Tax — Meydan Free Zone Authority. Checked 16 October 2026.
- Ministry of Finance announces new decisions relating to Corporate Tax for Free Zones (Cabinet Decision No. 55 of 2023, Ministerial Decision No. 139 of 2023) — WAM, Emirates News Agency. Checked 16 October 2026.
- Ministry of Finance extends Small Business Relief to tax periods ending on or before 31 December 2029 (Ministerial Decision No. 131) — WAM via Aletihad, 7 August 2026. Checked 16 October 2026.