The short answer
UAE corporate tax is 0% on taxable income up to AED 375,000 and 9% above it. Businesses with revenue up to AED 3 million can elect Small Business Relief for tax periods ending by 31 December 2029. VAT is 5%, with mandatory registration above AED 375,000 of taxable supplies. We register, file and defend your position with the FTA.
How much corporate tax will my UAE company pay?
A standard UAE taxable person pays 0% on the first AED 375,000 of taxable income and 9% on the rest (Cabinet Decision No. 116 of 2022). On AED 1,000,000 of taxable income that is 9% of AED 625,000, or AED 56,250. Taxable income starts from accounting profit and is then adjusted: some expenses are only partly deductible, exempt income is removed, and losses can be carried forward.
Registration is mandatory even if no tax is due. Missing the FTA's registration deadline triggers an AED 10,000 penalty under Cabinet Decision No. 10 of 2024. Use our corporate tax calculator for a first estimate.
Can my business claim Small Business Relief until 2029?
Yes, if you are a UAE resident person and your revenue is AED 3 million or less in the tax period and in every earlier period. On 7 August 2026 the Ministry of Finance announced Ministerial Decision No. 131, which extends the relief to tax periods ending on or before 31 December 2029 (Ministry of Finance via WAM). Before that decision, the relief was due to end with periods ending on 31 December 2026.
The relief is an election in the tax return, not an exemption: you still register, keep records and file. Qualifying Free Zone Persons cannot elect it, and once revenue passes AED 3 million in any period, the relief is lost for good. Read our guide to the 2029 extension.
“extends the period during which Small Business Relief may be claimed”
Does my free zone company still pay 0%?
Only on qualifying income, and only while every condition holds. A Qualifying Free Zone Person pays 0% on qualifying income and 9% on taxable income that is not qualifying, and that 9% has no AED 375,000 tax-free band (Meydan Free Zone Authority). To keep the status, the company needs adequate substance in the zone, audited accounts, arm's-length transfer pricing, and non-qualifying revenue below the lower of 5% of total revenue or AED 5 million (Ministry of Finance free zone decisions).
When must I register for VAT?
You must register when taxable supplies and imports pass AED 375,000 over the previous 12 months, or are expected to within the next 30 days; you may register voluntarily from AED 187,500 (Federal Tax Authority). The mandatory threshold does not apply to non-resident businesses, which generally register from their first taxable supply. Voluntary registration lets a startup recover input VAT on setup costs such as fit-out and equipment. Full VAT registration guide.
When does UAE e-invoicing become mandatory for my business?
It depends on revenue. Under Ministerial Decision No. 244 of 2025, businesses with revenue of AED 50 million or more must appoint an accredited service provider by 31 July 2026 and go live on 1 January 2027. Businesses below AED 50 million must appoint one by 31 March 2027 and go live on 1 July 2027. Business-to-consumer transactions are excluded until a later decision. See our e-invoicing timeline.
What do transfer pricing rules require?
Transactions with related parties and connected persons must be priced as if the parties were independent. Most taxpayers file a related-party disclosure with the corporate tax return; larger groups also keep a master file and local file. For Qualifying Free Zone Persons, arm's-length pricing is one of the conditions for the 0% rate, so a weak benchmark can cost more than the adjustment itself. Transfer pricing in detail.
How do you handle FTA penalties and disputes?
We review the assessment, gather evidence and file a reconsideration request with the FTA, which is the first step before any objection to the Tax Disputes Resolution Committee. Where an error is yours, a voluntary disclosure filed before an FTA audit usually reduces penalties. As an FTA-registered tax agency (registration to be confirmed on our About page) we can represent you directly. How FTA disputes work.
Frequently asked questions
Do I need to register for corporate tax if I make a loss?
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Yes. Registration depends on being a taxable person, not on profit. Late registration carries an AED 10,000 penalty under Cabinet Decision No. 10 of 2024.
Is Small Business Relief automatic?
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No. You elect it in each corporate tax return. You must still register, keep records and file a return.
What is the VAT rate in the UAE?
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The standard rate is 5%. Some supplies, such as certain exports and international transport, are zero-rated; others, such as some financial services and residential property, are exempt.
Does the 15% minimum tax affect my company?
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Only if you belong to a multinational group with consolidated revenue of EUR 750 million or more in at least two of the four previous years. The UAE Domestic Minimum Top-up Tax applies to such groups for financial years starting on or after 1 January 2025.
Can I switch from the free zone regime to Small Business Relief?
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A Qualifying Free Zone Person cannot elect Small Business Relief. Some smaller free zone companies may find standard rates simpler; this is a structuring decision to make with an adviser, not mid-year.
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.
- 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.
- AED10,000 Penalty for Late Corporate Tax Registration (Cabinet Decision No. 10 of 2024) — UAE Ministry of Finance, 27 February 2024. 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.
- Qualifying vs non-qualifying income under UAE Corporate Tax — Meydan Free Zone Authority. Checked 16 October 2026.
- Registration for VAT (mandatory and voluntary thresholds) — Federal Tax Authority. Checked 16 October 2026.
- Ministerial Decision No. 244 of 2025 on the Implementation of the Electronic Invoicing System — UAE Ministry of Finance. Checked 16 October 2026.