Overview of the UAE federal tax system for 2026: Corporate Tax and Small Business Relief, free zones, the top-up tax for large groups, VAT, excise tax, why individuals pay no personal income tax, tax residency certificates and EmaraTax registration, with routing to the detailed UAE Guides.
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| Tax | Who it hits | Headline rule for 2026 | Detailed Guide |
|---|---|---|---|
| Corporate Tax | Companies and other juridical persons (including free zone companies); individuals whose business turnover is more than AED 1,000,000 in a calendar year; non-residents with a UAE permanent establishment or nexus | 0% on taxable income up to AED 375,000, 9% above; Small Business Relief; 0% on qualifying income of a Qualifying Free Zone Person | ae-corporate-tax |
| Domestic Minimum Top-up Tax | UAE entities of multinational groups with revenue of EUR 750 million or more | Tops the UAE effective rate up to 15% | ae-corporate-tax (summary; refer out) |
| VAT | Businesses whose taxable supplies and imports pass the registration threshold; consumers bear it in the price | Standard rate 5%; mandatory registration above AED 375,000 | uae-vat and ae-vat-return |
| Excise tax | Importers, producers and stockpilers of excise goods, and anyone releasing them from a Designated Zone | 100% on tobacco, energy drinks and e-smoking products; sweetened drinks taxed per litre by sugar content | This Guide (summary; refer out) |
| Personal income tax | Nobody | None. Wages and personal investment income are not taxed | ae-income-tax |
| Payroll taxes | Nobody for tax | No income tax to withhold from wages; pension and social contributions sit outside the FTA's taxes | ae-payroll-social |
Tax year 2026. This Guide gives the whole picture of federal tax in the United Arab Emirates for 2026 and sends each detailed question to the Guide that answers it. For Corporate Tax, "2026" means tax periods (financial years) running in 2026, for most businesses 1 January to 31 December 2026. For VAT and excise tax, it means the monthly or quarterly tax periods that fall in 2026. The rules are the law as published on tax.gov.ae and mof.gov.ae on 25 September 2026. A short dated section covers returns for 2025 that are being filed now.
This Guide is for anyone who needs to know which UAE taxes apply to a person or a business, and roughly how: a founder, a freelancer, an employee moving to the UAE, a foreign group with a UAE subsidiary, or an accountant triaging a new client. It gives the key rule, the key figure and the official source for each tax, then routes the detailed work.
The currency is the UAE dirham (AED). Federal taxes are administered by the Federal Tax Authority (FTA) through its online portal, EmaraTax. The Ministry of Finance writes the tax policy and legislation. The Ministry says "The official sources of information on Federal Taxes in the UAE are the Ministry of Finance and the Federal Tax Authority", so this Guide cites only those two.
| Tax | Who it hits | Headline rule for 2026 | Detailed Guide |
|---|---|---|---|
| Corporate Tax | Companies and other juridical persons (including free zone companies); individuals whose business turnover is more than AED 1,000,000 in a calendar year; non-residents with a UAE permanent establishment or nexus | 0% on taxable income up to AED 375,000, 9% above; Small Business Relief; 0% on qualifying income of a Qualifying Free Zone Person | ae-corporate-tax |
| Domestic Minimum Top-up Tax | UAE entities of multinational groups with revenue of EUR 750 million or more | Tops the UAE effective rate up to 15% | ae-corporate-tax (summary; refer out) |
| VAT | Businesses whose taxable supplies and imports pass the registration threshold; consumers bear it in the price | Standard rate 5%; mandatory registration above AED 375,000 | uae-vat and ae-vat-return |
| Excise tax | Importers, producers and stockpilers of excise goods, and anyone releasing them from a Designated Zone | 100% on tobacco, energy drinks and e-smoking products; sweetened drinks taxed per litre by sugar content | This Guide (summary; refer out) |
| Personal income tax | Nobody | None. Wages and personal investment income are not taxed | ae-income-tax |
| Payroll taxes | Nobody for tax | No income tax to withhold from wages; pension and social contributions sit outside the FTA's taxes | ae-payroll-social |
Setting up a business, choosing a free zone or the mainland, and the order of registrations are covered in ae-company-formation.
This Guide does not cover Emirate-level fees and charges, customs duty, the detailed top-up tax computation, the detailed excise computation, or any other country's tax on a UAE resident.
Corporate Tax (Federal Decree-Law No. 47 of 2022) applies to financial years beginning on or after 1 June 2023. The tax period is the financial year: the Gregorian calendar year, or the 12-month period for which the business prepares financial statements (Article 57).
| Rule | 2026 position |
|---|---|
| Standard rates | 0% on the portion of taxable income not exceeding AED 375,000; 9% on taxable income above AED 375,000 (Article 3; Cabinet Decision No. 116 of 2022) |
| The AED 375,000 band | Once per Taxable Person per tax period, however many businesses it runs. Splitting a business to get more bands is treated as tax avoidance |
| Resident juridical person | Taxed on taxable income from the UAE and from outside the UAE (Article 12(1)) |
| Resident natural person | Taxed on income from the UAE or abroad only so far as it relates to their UAE business (Article 12(2)), and only when business turnover is more than AED 1,000,000 in the calendar year |
| Non-resident | Taxed on income attributable to a UAE permanent establishment or nexus. Other UAE-sourced income is subject to withholding tax at 0% (Article 45) |
| Exempt persons | Government entities, and on conditions: government-controlled entities, extractive businesses, qualifying public benefit entities, qualifying investment funds, pension and social security funds (refer) |
| Taxable income | Starts from accounting net profit, then adjusted for exempt income and non-deductible expenses |
| Top-up for large groups | The Cabinet can impose extra tax so a multinational group's effective rate reaches 15% (Article 3(3)); see the top-up tax section |
VAT (Federal Decree-Law No. 8 of 2017) has applied since 1 January 2018 at a standard rate of 5%.
| Rule | 2026 position |
|---|---|
| Standard rate | 5% on taxable supplies and imports that are not zero-rated or exempt |
| Zero rate (0%, input VAT recoverable) | Includes exports outside the GCC implementing states on conditions, international transport, first supply of a new residential building within 3 years of completion, investment precious metals, qualifying education and healthcare |
| Exempt (no VAT, input VAT not recoverable) | Specified financial services, residential property after its first supply, bare land, local passenger transport |
| Mandatory registration | Taxable supplies in the previous 12 months exceeded AED 375,000, or are expected to exceed it in the next 30 days. Apply within 30 days |
| Voluntary registration | Supplies or taxable expenses above AED 187,500 |
| Non-resident making supplies in the UAE where no one else accounts for the VAT | Must register, with no threshold |
| Tax period | Normally a quarter, set by the FTA; some businesses are monthly |
| Return and payment | Received by the FTA no later than the 28th day after the period ends, or another date the FTA directs (Executive Regulation, Article 64) |
Changes this year (detail in uae-vat):
E-invoicing (Ministerial Decision No. 244 of 2025; Ministerial Decision No. 66 of 2026):
Excise tax (Federal Decree-Law No. 7 of 2017) is levied on goods considered harmful to the health of the general public, to discourage their consumption. The rates are set by Cabinet Decision No. 197 of 2025.
| Excise good | Rate in 2026 (in force since) | Basis |
|---|---|---|
| Tobacco and tobacco products | 100% (since 1 October 2017) | Of the excise price |
| Energy drinks | 100% (since 1 October 2017) | Of the excise price |
| Electronic smoking devices and tools | 100% (since 1 December 2019) | Of the excise price |
| Liquids used in electronic smoking devices and tools | 100% (since 1 December 2019) | Of the excise price |
| Sweetened drinks, high sugar (8 grams or more of total sugar and other sweeteners per 100ml) | AED 1.09 per litre | Tiered volumetric |
| Sweetened drinks, moderate sugar (5 grams or more but under 8 grams per 100ml) | AED 0.79 per litre | Tiered volumetric |
| Sweetened drinks, low sugar (under 5 grams per 100ml) | AED 0 per litre | Tiered volumetric; still registered and reported |
| Sweetened drinks with artificial sweeteners only (and under 5 grams of total sugar per 100ml) | AED 0 per litre | Tiered volumetric; still registered and reported |
The UAE has no federal personal income tax. An individual pays UAE income tax only through Corporate Tax, and only on business income.
| Income | UAE tax on the individual in 2026 |
|---|---|
| Salary, wages, allowances and benefits under an employment contract | None, whatever the amount. The employer withholds no income tax |
| Director fees | Generally none; the FTA says they generally are not a business activity |
| Dividends, interest and gains on investments held for the person's own account | None, if not conducted through a licence, not needing one, and not a commercial business |
| Rent from UAE property, and gains on selling it | None, if not conducted through a licence and not needing one |
| Freelance, consultancy, trading or sole establishment income | Corporate Tax, but only if total business turnover is more than AED 1,000,000 in the calendar year |
| Foreign income unrelated to a UAE business | None |
A natural person is a UAE tax resident for a 12-month period if they meet any one of these tests:
| Test | Condition |
|---|---|
| Centre of life | Usual or primary place of residence and centre of financial and personal interests in the UAE |
| 183 days | Physically present in the UAE for 183 days or more within the relevant 12 consecutive months |
| 90 days | Physically present for 90 days or more within the relevant 12 consecutive months, and a UAE national, a GCC national or the holder of a valid UAE residence permit, and either a permanent place of residence in the UAE or employment or business in the UAE |
| Tax residency certificate fee (current table) | Amount |
|---|---|
| Application submission, non-refundable | AED 50 |
| Review and electronic certificate, applicant registered with the FTA | AED 500 |
| Review and electronic certificate, natural person not registered with the FTA | AED 1,000 |
| Review and electronic certificate, legal person (company) not registered with the FTA | AED 1,750 |
| Printed copy, each | AED 250 |
Each tax has its own registration and its own Tax Registration Number (TRN) on EmaraTax. Registering for VAT does not register the business for Corporate Tax.
| Registration | Deadline |
|---|---|
| Corporate Tax: UAE company, including a free zone company, set up in 2026 | 3 months from incorporation or establishment |
| Corporate Tax: foreign company effectively managed and controlled in the UAE | 3 months from the end of its financial year |
| Corporate Tax: non-resident with a permanent establishment | 6 months from the date the permanent establishment exists |
| Corporate Tax: resident individual whose 2026 business turnover exceeds AED 1,000,000 | 31 March 2027 |
| Corporate Tax: business claiming Small Business Relief | Must register; the relief is elected on the return |
| VAT | Within 30 days of becoming required to register |
| Excise tax | Notify the FTA within 30 days of the end of the month in which the person starts, or forms the intention to start, an excise activity; registered from the first day of that month; no threshold (occasional or non-business importers may be excepted and pay at import) |
| Top-up tax | Within 7 months after the end of the first fiscal year in scope |
The late registration penalty is AED 10,000 for Corporate Tax and AED 10,000 for VAT. For Corporate Tax, the FTA waives it if the first return is filed within 7 months of the end of the first tax period (Cabinet Decision No. 75 of 2023; CTP006; VAT penalties, Cabinet Decision No. 40 of 2017 as amended).
| Situation | Outcome |
|---|---|
| Individual with business turnover of exactly AED 1,000,000 | Not in Corporate Tax (the test is "exceeds") |
| Employee on a large salary who also owns rented flats, no licence | No UAE income tax and no Corporate Tax registration |
| Freelancer below the Corporate Tax threshold but with taxable supplies above AED 375,000 | No Corporate Tax, but must register for VAT. The two tests are independent |
| Company with taxable income of exactly AED 375,000 | Tax nil (0% on the portion not exceeding AED 375,000) |
| Company with revenue of exactly AED 3,000,000 in every period | Can still elect Small Business Relief (the test is "does not exceed") |
| Company whose revenue exceeded AED 3,000,000 in any earlier period | Small Business Relief never available again |
| Free zone company selling services to mainland businesses | Usually not qualifying income; may be taxed like a mainland company |
| Qualifying Free Zone Person | No AED 375,000 band on non-qualifying income, and no Small Business Relief |
| Supplies of exactly AED 375,000 in the last 12 months | Mandatory VAT registration not triggered (the test is "exceeded"); voluntary registration possible |
| Carbonated drink with no added sugar or sweetener, 2026 | Not a sweetened drink, so no excise tax from 1 January 2026 (it was 50% until 31 December 2025) |
| Low-sugar sweetened drink | AED 0 per litre only if a MOIAT certificate proves the tier (otherwise taxed as High sugar at AED 1.09 per litre); the importer or producer must still register and report |
| Non-resident with UAE-sourced income and no UAE permanent establishment | Withholding tax at 0% (Corporate Tax Law, Article 45) |
The amounts are illustrations. Each case uses the calendar year 2026 unless stated.
All returns are filed and paid through EmaraTax.
| Tax | Return and payment due |
|---|---|
| Corporate Tax | No later than 9 months from the end of the tax period. A 31 December 2026 year end is due 30 September 2027 |
| Corporate Tax, Small Business Relief | Same deadline; the election is made in the return |
| VAT | Received by the FTA no later than the 28th day after the end of each tax period (usually quarterly) |
| Excise tax | By the 15th day of the month after each monthly tax period, or the next working day |
| Top-up tax | Return 15 months after the end of the fiscal year (18 months for the first transition year) |
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