UAE Corporate Tax Explained: A Guide for Business Owners
The UAE introduced federal corporate tax in 2023, ending its long-standing zero-tax reputation — but the rates remain among the most competitive in the world. If you run or plan to run a Dubai company, here’s what you actually need to know.
New to Dubai? Start with our complete guide on how to start a business in Dubai.
What Is UAE Corporate Tax?
Corporate tax is a direct tax on the net profit of businesses operating in the UAE. It applies to companies and commercial activities across the Emirates, with specific reliefs designed to keep the UAE attractive for entrepreneurs and small businesses.
Who Pays, and What Are the Rates?
- 0% on taxable profit up to AED 375,000 — protecting small businesses and startups
- 9% on taxable profit above AED 375,000 — one of the lowest headline rates globally
- 0% personal income tax remains — salaries and personal income are not taxed
Free Zones and Qualifying Income
Qualifying free zone businesses can still benefit from a 0% rate on qualifying income, provided they meet substance requirements and don’t conduct excluded mainland activities. This is one of the biggest reasons free zones remain so popular — but the rules are detailed, and getting classification right matters.
Corporate Tax vs VAT — They’re Different
Don’t confuse the two. VAT (5%) is an indirect tax on goods and services that businesses collect on behalf of the government. Corporate tax (9%) is charged on your company’s profit. Many businesses must register for and comply with both.
Compliance: Registration, Filing & Deadlines
- Register for corporate tax with the Federal Tax Authority
- Maintain proper books — accurate accounting is now mandatory
- File one annual return within nine months of your financial year-end
- Keep records to support your filings and any free zone qualifying claims
Frequently Asked Questions
Does my free zone company still pay 0%?
Possibly — if it earns qualifying income and meets substance rules. Misclassification can trigger the 9% rate, so professional review is strongly advised.
Do small businesses need to register?
Most taxable persons must register even if profits fall under AED 375,000. The 0% band reduces tax due, not the obligation to comply.
Stay Compliant with Kurum Group
UAE tax rules are new and evolving. Kurum Group’s accounting and compliance team handles corporate tax registration, bookkeeping, and filing so you stay fully compliant while keeping your tax position optimised. Talk to our advisors for a free consultation.
