UAE corporate tax 2026: the 9% rate explained

The direct answer: if your UAE business earns taxable profit above AED 375,000, you pay 9% on the excess. Below that you pay 0%, but you still must register and file. Free zone companies can reach 0% on qualifying income only if they meet strict conditions. The much-discussed 15% figure is a separate top-up tax that touches only very large multinationals.

Who pays, and how much

Corporate tax is governed by Federal Decree-Law No. 47 of 2022 and applies to every UAE-incorporated company, every free zone company, and every branch of a foreign company with a permanent establishment here. Individuals pay corporate tax only when they run a business with turnover above AED 1 million; a salary or passive personal investment is not taxed.

The structure is simple: the first AED 375,000 of taxable income is a 0% band, and profit above it is taxed at 9%, one of the lowest headline rates in the world.

Registration is not optional

Every taxable person must register through the EmaraTax portal and obtain a tax registration number, even a company that expects to pay nothing. Missing the registration deadline carries a fixed AED 10,000 penalty. The FTA ran a penalty-waiver initiative that benefited tens of thousands of businesses, but relief depends on filing on time, so the safe move is to register now if you have not.

The 30 September 2026 deadline

The return and payment are due within nine months of the end of your tax period. For a company whose financial year ended 31 December 2025, that means 30 September 2026, and it applies whether your profit is above or below AED 375,000. Missing it triggers an AED 10,000 penalty escalating with continued non-compliance, plus monthly late-payment charges. See our dedicated filing deadline guide for the step-by-step.

Small Business Relief ends after 2026

If your revenue is AED 3 million or less in a tax period, you can elect Small Business Relief and be treated as having no taxable income. It is not automatic; you select it on your EmaraTax return. Crucially, this relief is legally set to expire for tax periods ending on or before 31 December 2026, making 2026 the final year to claim it. It does not apply to multinational groups or to free zone companies already claiming 0%.

Free zones and the 0% rate

A Qualifying Free Zone Person can keep a 0% rate, but only on qualifying income and only if it maintains adequate substance, follows transfer-pricing rules, keeps audited accounts, and holds non-qualifying revenue within the lower of 5% of revenue or AED 5 million. The 2026 definition of qualifying income sits in Ministerial Decision No. 229 of 2025. Even at 0%, a free zone company must register and file.

The 15% DMTT: probably not you

The Domestic Minimum Top-up Tax (Cabinet Decision No. 142 of 2024) applies a 15% effective rate, but only to multinational groups with consolidated global revenue of at least EUR 750 million. Ordinary UAE businesses and SMEs stay on the standard 9% rate.

The new penalty regime

From 14 April 2026, Cabinet Decision No. 129 of 2025 changed how penalties work: late payment now accrues at 14% per annum, non-compounding; voluntary disclosures cost 1% per month; and errors the FTA discovers attract 15% of the unpaid amount. Voluntary disclosure remains far cheaper than waiting for an audit.

Frequently asked questions