Guide
UAE company tax rate: the 0% and 9% corporate tax rates
Updated
There are two headline rates and one threshold. Almost every complication in UAE corporate tax is about what counts as taxable income, not about the rate applied to it.
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How this calculator works
- Article 3 of the Corporate Tax Law imposes corporate tax at 0% on the portion of taxable income not exceeding the amount set by Cabinet decision. It imposes 9% on taxable income above it (Federal Decree-Law No. 47 of 2022).
- That amount is AED 375,000, fixed by Cabinet Decision No. 116 of 2022, and it applies once per taxable person for the tax period whether or not the person carries on several businesses (Ministry of Finance). Splitting a business artificially to multiply the threshold is treated as a corporate tax advantage under the general anti-abuse rule.
- Small Business Relief treats an eligible resident person as having derived no taxable income. It applies where revenue is AED 3,000,000 or less in the relevant tax period and in every previous tax period.
- It must be elected in the tax return. A Qualifying Free Zone Person, or a member of a multinational group with consolidated revenue above AED 3.15 billion, cannot elect it (Federal Tax Authority).
- Small Business Relief has an end date. The Ministry of Finance states that the AED 3 million revenue threshold applies to tax periods starting on or after 1 June 2023. It says the threshold will only continue to apply to subsequent tax periods that end before or on 31 December 2026 (Ministry of Finance).
- Check the position for any tax period ending after that date before relying on the relief.
- For a Qualifying Free Zone Person, Article 3(2) charges 0% on Qualifying Income and 9% on taxable income that is not Qualifying Income. The AED 375,000 threshold sits in Article 3(1) and is not repeated in Article 3(2), so the calculator applies no 0% band to a free zone person's non-qualifying income.
- Where Small Business Relief is elected, other exemptions, reliefs and deductions are not available for that tax period, and losses and disallowed net interest expenditure are affected. The calculator shows tax of nil and does not model those consequences.
- Large multinational groups face a separate charge: the UAE domestic minimum top-up tax, using a minimum rate of 15% (Ministry of Finance, Cabinet Decision No. 142 of 2024). This calculator does not model it.
- The top-up tax applies to members of groups with annual global revenues of EUR 750 million or more in at least two of the four preceding financial years. It covers financial years starting on or after 1 January 2025.
- The calculator starts from taxable income you supply. Arriving at taxable income from accounting profit is the hard part of a UAE corporate tax computation and involves exempt income, interest limitation, transfer pricing and other adjustments.
The UAE corporate tax rate of 9% in the law
Article 3 of the Corporate Tax Law charges corporate tax on taxable income at 0% on the portion not exceeding an amount set by the Cabinet. It charges 9% on the portion above it. Cabinet Decision No. 116 of 2022 sets that amount at AED 375,000. The UAE Government's own summary states the same two rates (u.ae).
The rate applies to financial years beginning on or after 1 June 2023, which is when the law took effect (Ministry of Finance).
Who is a taxable person
- UAE companies and other juridical persons incorporated in the UAE, or effectively managed and controlled here.
- Natural persons conducting a business or business activity in the UAE, as specified by Cabinet Decision.
- Non-resident juridical persons with a permanent establishment in the UAE.
- Juridical persons established in a UAE free zone, which are within scope as taxable persons even where they end up paying 0% on qualifying income.
Who is exempt
The Ministry of Finance lists exempt persons in four groups:
- automatically exempt government entities and specified government-controlled entities;
- extractive and non-extractive natural resource businesses, exempt on notification to the Ministry;
- qualifying public benefit entities listed in a Cabinet Decision;
- pension funds, qualifying investment funds and certain wholly-owned subsidiaries, exempt on application to and approval by the Federal Tax Authority.
The separate 15% charge on large groups
The UAE domestic minimum top-up tax is a different tax from the 9% corporate tax. It applies to constituent entities of multinational groups with annual global revenues of EUR 750 million or more in the ultimate parent's consolidated accounts. That must hold in at least two of the four preceding financial years.
It took effect for financial years starting on or after 1 January 2025. Cabinet Decision No. 142 of 2024 defines the minimum rate as fifteen percent.
This regime is new and has been amended more than once. Confirm the current position on the Federal Tax Authority and Ministry of Finance websites before filing.