UAE Corporate Tax Explained: the 9% Rate, the 0% Band, and Who Pays
The UAE charges 0% corporate tax on the first AED 375,000 of taxable income and 9% on the excess, in force for financial years beginning on or after 1 June 2023 under Federal Decree-Law No. 47 of 2022. For most businesses this is the entire headline: a single 9% federal rate, with a small-profit band at zero.
Who has to pay
Corporate tax applies to UAE-incorporated companies, foreign companies effectively managed in the UAE, and individuals carrying on a licensed business or business activity. Whether or not you expect to owe tax, registration with the Federal Tax Authority is mandatory, and a return is due within nine months of the end of each tax period. Late registration carries an AED 10,000 penalty.
How the 9% is calculated
Corporate tax is charged on accounting profit, adjusted for specific items the law adds back or exempts. The first AED 375,000 of taxable income is taxed at 0%, protecting small businesses and start-ups; income above that threshold is taxed at 9%. Dividends and capital gains from qualifying shareholdings are generally exempt under the participation-exemption rules, and foreign branch profits can be exempted by election.
Large multinationals: the 15% top-up
From financial years starting on or after 1 January 2025, multinational groups with consolidated revenue of at least EUR 750 million are subject to a Domestic Minimum Top-up Tax that brings their effective UAE rate to 15%, aligning the UAE with the OECD Pillar Two framework. This does not change the 9% / 0% regime for everyone else.
Key figures
- 0% on the first AED 375,000 of taxable income; 9% above (UAE Government)
- Effective for financial years starting on or after 1 June 2023 (Federal Decree-Law No. 47 of 2022)
- Returns filed within 9 months of period end; AED 10,000 late-registration penalty (UAE Ministry of Finance)
- 15% Domestic Minimum Top-up Tax for groups with revenue of at least EUR 750 million, from 1 January 2025 (UAE Ministry of Finance)
Frequently asked questions
What is the corporate tax rate in the UAE?
The UAE charges 0% Corporate Tax on the first AED 375,000 of taxable income and 9% on income above that threshold, effective for financial years beginning on or after 1 June 2023 under Federal Decree-Law No. 47 of 2022.
Do I have to register even if I expect to pay 0%?
Yes. Registration with the Federal Tax Authority is mandatory for all taxable persons, and a return is due within nine months of the end of each tax period. Late registration carries an AED 10,000 penalty.
By Vijay Dhawan, Managing Partner, LexVerge LLP. Last updated 2 July 2026. This article is general information, not tax advice; confirm the current position for your facts before acting.
