Corporate tax in the UAE — what every founder should know
A few numbers and clear rules. We explain who is subject to the tax, how it is calculated, and what changes if your company is in a free zone.
The rates in brief
| Taxable income | Rate |
|---|---|
| Up to AED 375,000 | 0% |
| Above AED 375,000 | 9% |
The tax applies to financial years starting on or after 1 June 2023. Large multinational groups are subject to special standards.
Who is subject to corporate tax?
According to the official government portal, the tax applies to all businesses and individuals carrying out a commercial activity under a trade license in the UAE, including free zone companies, as well as foreign entities carrying out activity in the country on a continuous or regular basis.
Some entities are exempt, such as government entities, and extraction and natural resources businesses, certain pension and investment funds and qualifying public benefit entities are exempt on conditions.
Free zone companies: the full picture
A free zone does not mean an automatic exemption from corporate tax.
A qualifying person in a free zone
The 0% rate applies to qualifying income only, according to the Federal Tax Authority.
Non-qualifying income
Subject to 9%, and the 0% band up to AED 375,000 does not apply to it.
A company that doesn't meet the conditions
Treated like any company: 0% up to AED 375,000 and 9% above it.
Registration and compliance
Companies subject to the tax register with the Federal Tax Authority, including qualifying persons in free zones. Registration and returns have deadlines set by the Authority, and missing them may result in penalties.
That's why we link formation to tax from day one: we register your company and remind you of the deadlines, and refer you to the accountant to keep the books.
Source of the information
Source: u.ae (the government portal) and the Federal Tax Authority tax.gov.ae. We consulted them on 8 October 2026, and the numbers and conditions may change; we confirm them for you in the consultation.
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Common questions, clear answers.
Are free zone companies exempt from corporate tax?
Not automatically. A qualifying person in a free zone gets 0% on qualifying income, and the rest of the income is subject to 9%.
Do I need to register if my profits are below 375,000?
Registration with the Federal Tax Authority concerns those subject to the tax, and we review your case to confirm whether you need to.
Who handles registration and returns?
We register your company and follow the deadlines, and a certified accountant prepares the books and the return.
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