General UAE Corporate Tax guide

General UAE Corporate Tax guide

General information, not tax or legal advice. Verify current figures on the FTA's EmaraTax portal (tax.gov.ae) before relying on them. Current as of September 2026.

1. Overview

The UAE Corporate Tax (CT) regime was introduced under Federal Decree-Law No. 47 of 2022, administered by the Federal Tax Authority (FTA). It applies to financial years starting on or after 1 June 2023 — a calendar-year business became subject to CT from 1 January 2024. It sits alongside, and separately from, UAE VAT (5%) and the Domestic Minimum Top-up Tax (DMTT) for large multinational groups.

2. Who Must Register and Pay

• Persons who must register and pay — - UAE resident juridical persons — companies incorporated or effectively managed and controlled in the UAE, mainland or free zone. - Foreign (non-resident) companies with a permanent establishment or nexus in the UAE. - Natural persons (individuals) conducting business in the UAE with turnover exceeding AED 1,000,000 in a Gregorian calendar year. (Generally excluded: employment income, personal investment income (dividends, capital gains), and personal real estate income held in an individual's own name.) (Federal Decree-Law No. 47 of 2022)

3. Tax Rates

Tax Rates

Taxable income band	Rate
Up to AED 375,000	0%
Above AED 375,000	9%
Qualifying Free Zone Person, on Qualifying Income	0%
Large MNE groups in scope of DMTT (Pillar Two)	15% minimum effective rate

4. Free Zone Businesses: Qualifying Free Zone Person (QFZP)

• QFZP qualification requirements — Free zone registration alone doesn't give 0%. To qualify as a QFZP, a business must: - Maintain adequate substance in the UAE. - Derive Qualifying Income as defined in the relevant Cabinet/Ministerial Decisions. - Keep non-qualifying revenue within the de minimis limit — the lower of 5% of total revenue or AED 5,000,000. Exceeding the limit taxes the entire taxable income at 9%, not just the excess. Registration and filing are mandatory even at 0%. (relevant Cabinet/Ministerial Decisions)

5. Small Business Relief

• Small Business Relief — Lets an eligible UAE resident business elect to be treated as having no taxable income for a period. - Threshold: gross revenue ≤ AED 3,000,000 in the current and every prior tax period. Exceeding it once permanently ends eligibility. - Time-limited: available for periods starting on/after 1 June 2023 and ending on/before 31 December 2026. No extension announced as of September 2026 — confirm before relying on it for 2027. - Not available to: Qualifying Free Zone Persons, or MNE group members with consolidated revenue over AED 3.15 billion (~EUR 750 million). - Must be elected annually in the CT return via EmaraTax — not retroactive. - Trade-off: no tax loss carryforward/use in an elected year.

6. Domestic Minimum Top-up Tax (Pillar Two)

• Domestic Minimum Top-up Tax (Pillar Two) — Effective for financial years starting on/after 1 January 2025: MNE groups with consolidated global revenue ≥ EUR 750 million in at least 2 of the preceding 4 years pay a 15% minimum effective rate in the UAE. Doesn't affect most SMEs.

7. Deductible and Non-Deductible Expenses

• Deductible and Non-Deductible Expenses — - Entertainment: only 50% deductible (client/shareholder/supplier meals, transport, admission, etc.). - General interest limitation (GIDLR): net interest deductible up to 30% of tax-adjusted EBITDA; de minimis AED 12,000,000 (below this, no limitation applies); disallowed amounts carry forward 10 tax periods. - Special interest limitation (SIDLR): interest on related-party loans funding dividends, redemptions, capital returns, or related-party acquisitions is non-deductible unless the lender is taxed ≥9% on that interest. - Non-deductible: dividends/profit distributions, fines and penalties (except agreed liquidated damages), donations to non-qualifying entities, and items specified by Cabinet Decision.

8. Registration Deadlines

Incorporated before 1 March 2024 — by trade licence issue month:

Registration Deadlines by licence issue month

Licence issued	Deadline
Jan/Feb	31 May 2024
Mar/Apr	30 Jun 2024
May	31 Jul 2024
Jun	31 Aug 2024
Jul	30 Sep 2024
Aug/Sep	31 Oct 2024
Oct/Nov	30 Nov 2024
Dec	31 Dec 2024

8. Registration Deadlines

• Incorporated on/after 1 March 2024 — Incorporated on/after 1 March 2024: register within 3 months of incorporation, via EmaraTax.

9. Filing and Payment

• Filing and Payment — File the CT return and pay any tax due within 9 months of tax period end. Calendar-year business → due 30 September the following year.

10. Penalties

• Penalties — - Late registration: fixed AED 10,000 (Cabinet Decision No. 10 of 2024). - Waiver route: FTA has offered a waiver if the first CT return/declaration is filed within a set window (historically 7 months of first tax period end) — terms have changed over time; verify current status on tax.gov.ae. - Separate penalties apply for late filing, late payment, and record-keeping failures under the general Tax Procedures framework. (Cabinet Decision No. 10 of 2024)

11. Practical Checklist

• Confirm your tax period and registration status/deadline.
• Test Small Business Relief eligibility (cumulative AED 3M revenue test); remember the 2026 sunset.
• If in a free zone, confirm QFZP status each period, including the 5%/AED 5M cap.
• Check interest and entertainment expenses against GIDLR/SIDLR and the 50% rule.
• Calendar the 9-month filing/payment deadline.
• If part of a large group, check DMTT exposure.

Sources

tax.gov.ae (FTA Corporate Tax); Federal Decree-Law No. 47 of 2022; Cabinet Decision No. 10 of 2024

Contributed by Jonathan I. Ruiz, CPA-0177929.