UAE Corporate Tax turned tax from an afterthought into a recurring obligation for nearly every business. The good news is that the system is relatively simple once you understand the rates, the thresholds and the Free Zone regime. Here is what a new company needs to know.
Registration is the first obligation
Most UAE businesses must register for Corporate Tax and file an annual return, even if their profit falls within the 0% band. Registration deadlines apply, and late registration carries penalties — so this is the first thing to handle after incorporation, not something to defer to filing season. Registration is done through the tax authority’s portal.
The rates: 0% and 9%
UAE Corporate Tax applies 0% to taxable income up to AED 375,000 and 9% above that threshold. For many small and newly formed companies, this means a modest or even zero tax bill in the early years — but the filing obligation remains regardless. Keeping clean, reconciled accounts year-round is what makes filing painless.
Free Zones and small business relief
A Free Zone entity can benefit from a 0% rate on qualifying income if it meets the Qualifying Free Zone Person (QFZP) conditions — this is fact-specific and worth confirming with analysis before you rely on it. Separately, Small Business Relief may allow eligible businesses below a revenue threshold to be treated as having no taxable income for a period, reducing the compliance burden in the early years. Both routes have conditions, and getting them wrong is costly.
- ✓0% on taxable income up to AED 375,000; 9% above
- ✓Free Zone QFZP: 0% on qualifying income (conditions apply)
- ✓Small Business Relief for eligible low-revenue businesses
- ✓Annual registration and filing required regardless of rate
Frequently asked questions
Do new UAE companies have to register for Corporate Tax?+
Yes — most UAE businesses must register and file an annual return, even when profit falls in the 0% band. Late registration carries penalties.
What is the UAE Corporate Tax rate?+
0% on taxable income up to AED 375,000 and 9% above that. Qualifying Free Zone entities may apply 0% to qualifying income.
What is a Qualifying Free Zone Person (QFZP)?+
A Free Zone entity that meets specific conditions and can apply 0% Corporate Tax to qualifying income. The test is fact-specific, so a QFZP analysis is recommended before relying on it.
This article is general information, not legal, tax or financial advice. UAE rules and thresholds change and depend on your specific situation. Speak to RTS for advice tailored to your business.