UAE corporate tax calculator

01

How is UAE corporate tax calculated?

Taxable income up to AED 375,000 is taxed at 0%, and only the part above AED 375,000 is taxed at 9%.

The rates come from Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses. Crossing the threshold does not move all of your income to 9%. Only the amount above it is taxed.

For AED 500,000 of taxable income, take away AED 375,000 first, then apply 9% to the remaining AED 125,000. The tax is AED 11,250, not the AED 45,000 you would get by taxing the full amount.

The threshold applies once per business for each tax period, not to each activity. A tax group usually shares one threshold across its combined income.

These are the standard rates. Qualifying free zone persons and some other businesses are taxed differently, as the blocks below explain.

02

Who has to register and pay corporate tax?

Every UAE company and free zone company must register with the Federal Tax Authority, even if it expects to pay nothing.

Registration is done through EmaraTax. It covers mainland companies, free zone companies, including those paying 0%, and individuals whose business turnover brings them into scope.

A result of zero does not remove the duty to register and file a return. Small Business Relief, the 0% band and the free zone rate all work through the return, so the return still has to be made.

People who earn only a salary do not pay corporate tax on it.

Very large international groups, with combined revenue of EUR 750 million or more, can also fall under the Domestic Minimum Top-up Tax for financial years starting on or after 1 January 2025. That is a separate assessment this calculator does not cover.

03

What is Small Business Relief, and who can claim it?

A UAE-resident business with revenue of AED 3 million or less can elect to be treated as having no taxable income, so it pays no corporate tax for that period.

The relief was set by Ministerial Decision No. 73 of 2023. Ministerial Decision No. 131 of 2026 extended it to tax periods ending on or before 31 December 2029, three years beyond the original end date of 31 December 2026.

To qualify, revenue must be AED 3 million or less in the current tax period and in every earlier one. The relief is not automatic. You elect it in your return each year, and you must still be registered.

It uses a revenue test, while the AED 375,000 band uses taxable income. They are two separate thresholds for two separate purposes.

A worked example

A consultancy with AED 2.4 million of revenue and AED 600,000 of taxable income would normally pay AED 20,250. If it elects Small Business Relief, its taxable income is treated as nil and it pays nothing for that period.

Qualifying free zone persons and members of large multinational groups cannot claim the relief. Losses made in a year when the relief is claimed generally cannot be carried forward, so a business with large losses should weigh that up.

04

How are free zone companies taxed?

A qualifying free zone person pays 0% on qualifying income and 9% on its other taxable income, with no AED 375,000 band on that other income.

A free zone licence does not make all income tax-free. To be a qualifying free zone person, a company has to meet several conditions, including:

• Adequate substance in the free zone, such as staff, premises and spending.
• Qualifying income as defined in Cabinet Decision No. 100 of 2023, such as income from other free zone persons and from qualifying activities.
• Audited financial statements and compliance with the transfer pricing rules.
• The de minimis test. Non-qualifying revenue must be no higher than AED 5 million or 5% of total revenue, whichever is lower.

Failing a condition can mean losing the status for the current tax period and the following four, with income then taxed under the standard rules.

If you are unsure whether you qualify, choose “not qualifying” in the calculator. It gives the more cautious figure.

05

What counts as taxable income?

Taxable income starts with your accounting profit and is then adjusted for the tax rules. It is not your revenue, the cash you received or your bank balance.

Revenue is what the business earns before expenses. Accounting profit is revenue less expenses under your accounting standards. Taxable income is that profit after the adjustments the law requires.

Using revenue in place of taxable income is the quickest way to overstate the figure. Common adjustments include:

• Expenses that are not deductible, or only partly deductible.
• Income that is exempt, such as some dividends.
• Transactions with related parties that need adjusting to market value.
• Tax losses from earlier periods that can be set off.

Keep a short schedule listing each adjustment between accounting profit and taxable income, with the evidence for it. If your accounts are not final, treat the result as a forecast and update it when they are.

06

Do freelancers and sole traders pay corporate tax?

Only when their business turnover goes above AED 1 million in a calendar year. Below that, an individual’s business income is outside corporate tax.

The test, set by Cabinet Decision No. 49 of 2023, is on turnover, meaning business income before expenses, combined across all of the person’s business activities in the UAE. Salary and personal investment income do not count towards it.

Passing the test does not mean all turnover is taxed. Once in scope, the same rules apply as for a company: tax is worked out on taxable income, the first AED 375,000 is at 0%, and Small Business Relief can apply if revenue is AED 3 million or less.

Choose “freelancer or sole trader” in the calculator to apply the turnover test first.

07

When is the corporate tax return due?

The return, and any tax due, must be filed and paid within nine months of the end of the tax period.

For a business whose tax period runs from January to December, the year ending 31 December 2026 has a deadline of 30 September 2027. Returns are filed through EmaraTax.

The deadline applies even when the tax works out at zero, including years in which you claim Small Business Relief.

Keep your records, including the accounts and the workings behind your taxable income, for at least seven years.

Use the calculator early in the year to estimate the figure, so the money is set aside well before the deadline.

08

What are the most common corporate tax mistakes?

The most common mistake is applying 9% to all taxable income, rather than only to the part above AED 375,000.

• Taxing the whole amount. On AED 500,000, the tax is AED 11,250, not AED 45,000.
• Using revenue instead of taxable income. High sales do not mean high taxable profit.
• Assuming a free zone licence means 0%. Only a qualifying free zone person gets 0%, and only on qualifying income.
• Assuming the relief applies by itself. Small Business Relief has to be elected in each return.
• Skipping registration. A business that owes nothing still has to register and file.
• Working from an old end date. Small Business Relief now covers tax periods ending on or before 31 December 2029, not 2026.

In short: work from taxable income, tax only the part above AED 375,000, check whether Small Business Relief or the free zone rate applies, and file within nine months.

Sources: Federal Tax Authority, UAE Ministry of Finance, Federal Decree-Law No. 47 of 2022, Ministerial Decision No. 73 of 2023 as amended by Ministerial Decision No. 131 of 2026, and Cabinet Decisions No. 49 and No. 100 of 2023.