UAE Corporate Tax: What Actually Applies to Your Company

Accounting and tax for a UAE company starts with this map: which person you are, which rate schedule attaches, which election you can make, and which calendar the Federal Tax Authority (FTA) will enforce. The licence invoice is a different bill.

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Who is a Taxable Person for UAE Corporate Tax?

Article 11 of the Corporate Tax Law splits Taxable Persons into Resident Persons and Non-Resident Persons. A Resident Person includes a juridical person incorporated, established, or recognised under UAE law, including a Free Zone Person. It also includes a foreign juridical person that is effectively managed and controlled in the UAE, and a natural person who conducts a Business or Business Activity in the UAE as specified by Cabinet decision. A Non-Resident Person is anyone outside that list who has a Permanent Establishment in the UAE, derives State Sourced Income, or has a nexus the Cabinet has specified.

The company you formed in a free zone sits inside Article 11(3)(a). The FTA’s Free Zone Persons guide (20 May 2024) repeats the point: a Free Zone Person is a Resident Person and a Taxable Person. The zone’s trade licence does not take the company off the federal register. Mainland companies sit on the same Article 11 list. A UAE branch of a Resident Person is the same Taxable Person as the parent (Article 11(5)). A foreign company with a UAE Permanent Establishment is a Non-Resident Person taxed on income attributable to that establishment, plus State Sourced Income that is not attributable to it.

Natural persons sit on a narrower base. Cabinet Decision No. 49 of 2023 sets the categories of Business that bring a natural person into the law. Wages as an employee are outside Corporate Tax. Personal investment income that is not a Business is outside it. Exempt Persons under Article 4 are a statutory list. The FTA can still require some of them to register. Do not treat “Exempt Person” as a silent default for an ordinary LLC or FZ-LLC.

The tax attaches to the juridical person, not to the visa or the slogan on the formation quote. UAE company formation and licensing chooses the legal shape. That shape then selects the tax map below. The formation fee is not the tax.

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How do the 0% and 9% rates attach to taxable income?

Article 3(1) of the Law sends ordinary taxable income to rates the Cabinet specifies. Cabinet Decision No. 116 of 2022 writes those rates in dirhams: 0 percent on taxable income that does not exceed AED 375,000 in the tax period, and 9 percent on the excess. The FTA Corporate Tax General Guide (10 September 2023) and the Determination of Taxable Income guide (31 July 2024) reprint the same split. Dual-source the band to Cabinet Decision 116 and a live FTA or MoF page.

Taxable income starts from accounting income in standalone financial statements prepared under accounting standards accepted in the UAE, then adjusts under Article 20. Revenue is not taxable income. A company can sit above AED 375,000 of revenue and still have taxable income inside the 0 percent band after deductions. Thin costs and a high margin put a modest-revenue company into 9 percent on the excess over AED 375,000.

Cabinet Decision 116, Article 2(2), treats artificial splitting of a business so that more than AED 375,000 in total taxable income takes the 0 percent rate as an arrangement to obtain a Corporate Tax benefit under Article 50.

Article 3(2) of the Law writes a different schedule for a QFZP: 0 percent on Qualifying Income and 9 percent on taxable income that is not Qualifying Income. The FTA Free Zone Persons guide states that a QFZP does not get the 0 percent rate on the first AED 375,000 of taxable income that is not Qualifying Income. Non-qualifying taxable income goes to 9 percent from the first dirham.

A worked ordinary case, using the FTA General Guide’s method: taxable income AED 6,000,000. First AED 375,000 at 0 percent = AED 0. Remaining AED 5,625,000 at 9 percent = AED 506,250. A QFZP with the same total, of which AED 5,000,000 is Qualifying Income and AED 1,000,000 is not, pays 9 percent on AED 1,000,000 = AED 90,000, with no 375,000 subtraction on that slice.

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Can this company elect Small Business Relief?

Small Business Relief is an election under Article 21 of the Law and Ministerial Decision No. 73 of 2023. An eligible Resident Person that makes the election is treated as having no taxable income for that period. You still register, keep records, and file a simplified return on the nine-month clock. Ministerial Decision No. 131 of 2026, announced by WAM on 7 August 2026, extends the MD 73 AED 3 million revenue threshold to tax periods ending on or before 31 December 2029. The 2023 FTA guide still prints 31 December 2026. Use WAM and MD 131 for the date. Revenue above AED 3 million in any period closes the relief for later periods too.

Revenue at or below AED 3 million, every period

MD 73 sets the test on Revenue, not on taxable income. Revenue is the gross inflow. The election changes the filing: treated as no taxable income, simplified return, and you give up tax losses and certain interest-limitation carry-forwards from periods on the relief, as the FTA SBR guide explains.

The AED 3 million test applies to the relevant tax period and to all previous tax periods. Cross it once and SBR is closed for later periods, even if revenue later falls. The FTA topics page walks this with a natural-person example: prior-period revenue of AED 4,300,000 blocks the election even if the current period is AED 1,900,000. Members of an MNE group with consolidated revenue of more than AED 3.15 billion (Cabinet Decision No. 44 of 2020, CbCR) cannot elect, even if the UAE entity itself is small.

Who cannot elect, and what the election does not replace

A Qualifying Free Zone Person cannot elect Small Business Relief. MD 73, the FTA SBR guide, and the FTA topics page all state the exclusion. The two 0 percent paths are alternatives. A Free Zone Person that is not a QFZP can elect SBR if the other tests are met. If this company will claim QFZP for the period, do not model an SBR election for the same period.

SBR does not waive Corporate Tax registration, shorten the seven-year record clock, move the return due date, or answer VAT. VAT mandatory registration still turns on taxable supplies and imports of AED 375,000 in a rolling twelve months on the FTA VAT page, a different 375,000 from Cabinet Decision 116.

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What does Qualifying Free Zone Person status attach to?

Article 18 of the Law lists five cumulative conditions: adequate substance in the State, Qualifying Income as specified by the Cabinet, no election into ordinary rates under Article 19, arm’s length pricing and transfer-pricing files under Articles 34 and 55, and any other conditions the Minister prescribes. Cabinet Decision No. 100 of 2023 defines Qualifying Income. MD 229 of 2025 replaces MD 265 of 2023 from 1 June 2023. MD 84 of 2025 requires an audit for every QFZP, with no revenue floor, for periods from 1 January 2025. Fail a condition, or elect under Article 19, and the FTA guide locks you out for that period plus the next four.

Qualifying Income, the AED 375,000 band, and the 9 percent slice

Cabinet Decision 100 includes in Qualifying Income, subject to the PE and immovable-property carve-outs: income from transactions with a Free Zone Person, except Excluded Activities; income from Qualifying Activities with a Non-Free Zone Person where the Free Zone Person is the Beneficial Recipient; and any other income if de minimis is met.

MD 229 of 2025 lists Qualifying Activities and Excluded Activities. The MoF news on MD 229 states that the Decision repeals MD 265 of 2023. Prefer the 2025 text over a 2023 PDF that still cites MD 265.

De minimis is met where non-qualifying Revenue does not exceed the lower of 5 percent of total Revenue or AED 5,000,000. Revenue attributable to a Domestic or Foreign Permanent Establishment, and certain immovable-property and IP lines, drops out of both sides of the fraction. Breach the cap and the five-period lockout starts.

The 9 percent slice is every dirham of taxable income that is not Qualifying Income. There is no AED 375,000 0 percent band on that slice. A QFZP that books AED 200,000 of non-qualifying taxable income pays AED 18,000. An ordinary person with the same taxable income pays AED 0.

Substance, audit, transfer pricing, and the five-period lockout

Adequate substance, in the FTA guide, means adequate assets, qualified employees, and operating expenditure in a Free Zone for the activities that generate Qualifying Income. Core income-generating activities must be performed in a Free Zone. A flexi-desk with no people and no assets in the zone is the profile the guide is written to catch.

Ministerial Decision No. 84 of 2025 requires audited financial statements from every QFZP and from a taxable person (not in a Tax Group) with Revenue exceeding AED 50 million. The QFZP line has no revenue floor. KPMG’s note confirms MD 84 replaces MD 82 of 2023 for periods commencing on or after 1 January 2025; MD 82 continues for earlier periods. A simplified zone statement does not replace the federal QFZP audit.

Articles 34 and 55 require arm’s length pricing and transfer-pricing documentation. Attribute profits to a Domestic or Foreign PE as if it were a separate Related Party. Article 19 lets a QFZP elect into the ordinary Article 3(1) rates from the start of the current period or the next. The FTA guide times the election to the return due date and then applies the five-period lockout. Model both schedules before you tick the box.

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When does a Domestic Permanent Establishment put income on 9 percent?

Cabinet Decision No. 100 of 2023 defines a Domestic Permanent Establishment as a place of Business or other form of presence of a Qualifying Free Zone Person outside the Free Zone in the State. Article 5 of that Decision taxes income attributable to a Domestic PE (and to a Foreign PE) at 9 percent under Article 3(2)(b) of the Law. The establishment is treated as a separate and independent Person that is a Related Party of the QFZP. Arm’s length attribution applies.

The FTA Free Zone Persons guide maps two common shapes. A Free Zone parent with a mainland branch: the branch is a Domestic PE. A UAE mainland company with a registered free zone branch: the mainland head office is the Domestic PE and the free zone branch is the Free Zone Business. In both shapes, 0 percent on Qualifying Income attaches only to the Free Zone Business. The mainland presence takes the 9 percent schedule on income attributable to it.

For the PE test, Cabinet Decision 100 applies Article 14 of the Law with two substitutions: read “Qualifying Free Zone Person” where Article 14 says “Non-Resident Person,” and read “geographical areas outside the Free Zones in the State” where Article 14 says “State.” A fixed place of business on the mainland, or a dependent agent who habitually concludes contracts there, can create the PE.

Revenue attributable to the Domestic PE drops out of the de minimis fraction and is taxed at 9 percent. Dubai’s Executive Council Resolution No. (11) of 2025 opened DET routes for some free zone establishments to take a mainland branch licence or a temporary permit. That is a licensing path. It does not rewrite Cabinet Decision 100.

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Ordinary taxable person, QFZP, or Small Business Relief: which map is yours?

Planning map as of 18 August 2026. Confirm the live instrument before you file. USD uses AED 3.6725 = USD 1 on the AED 375,000 band only, as a scale check (about USD 102,110).

Ordinary taxable person

You sit here as a Taxable Person on Article 3(1), including a Free Zone Person that is not a QFZP. Cabinet Decision 116 sets 0% up to AED 375,000 and 9% on the excess. The AED 375,000 0% band applies. There is no revenue test for the rate; audit may still turn on AED 50 million.

This is the default schedule. Substance is ordinary Corporate Tax presence. Ministerial Decision 84, for periods from 1 January 2025, requires audited financial statements if Revenue exceeds AED 50 million and you are not in a Tax Group. Articles 34 and 55 apply if you have Related Parties.

Registration, return, and records run through EmaraTax: return in 9 months, records 7 years. Late-filing penalties sit in Cabinet Decision 75/2023. The map fits mainland, a free zone without QFZP, or a QFZP electing into Article 3(1). It fails if you treated the zone licence as the tax.

Qualifying Free Zone Person

A Free Zone Person meeting Article 18, Cabinet Decision 100, Ministerial Decision 229 of 2025, and Ministerial Decision 84 of 2025. Rate: 0% on Qualifying Income and 9% on other taxable income (Article 3(2)). The AED 375,000 0% band does not apply to the non-qualifying slice.

De minimis: non-qualifying Revenue must stay at or below the lower of 5% of total Revenue or AED 5 million. QFZP is deemed if the conditions hold; an Article 19 election lasts five periods. Substance means adequate assets, qualified employees, and operating expenditure in a Free Zone.

Every QFZP must produce audited financial statements under MD 84. There is no revenue floor. Transfer pricing is Articles 34 and 55, plus PE attribution as a separate Related Party. EmaraTax, the nine-month return, and seven-year records are the same as the ordinary schedule.

Fail the conditions or elect out and you lock that period plus four subsequent periods. The map fits a qualifying activity, a substance and audit budget, and de minimis under the cap. A flexi-desk with no people, sales to natural persons, an unmodelled mainland PE, or no auditor is a poor fit.

Small Business Relief election

A Resident Person electing under Article 21 and Ministerial Decision 73, as extended by Ministerial Decision 131 of 2026. The period is treated as having no taxable income. The AED 375,000 band is not used because taxable income is treated as nil.

Revenue must stay at or below AED 3 million in this period and every previous period. One breach closes SBR. You must elect in the return. A QFZP cannot elect, and neither can a CbCR MNE member above AED 3.15 billion.

Substance follows ordinary Corporate Tax rules. There is no substance waiver. QFZP cannot elect SBR; the AED 50 million audit line can still apply to other persons. Keep transfer-pricing records the Authority can request. Registration and the archive are the same; the return is simplified.

Cross AED 3 million once and SBR is gone later. The election fits a small resident company that is not a QFZP, not an in-scope MNE, and under AED 3 million through 2029. It is a poor fit if you also want QFZP 0% on Qualifying Income for the same period.

A company can move between these maps across years, with costs. Leave QFZP and you wait five periods to return. Break SBR’s revenue cap and you do not return.

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When must you register, file, and keep records?

Registration, the return, and the archive are three clocks. FTA Decision No. 3 of 2024, effective 1 March 2024, sets registration timelines. Articles 53 and 48 of the Law put the return and payment at nine months from period-end. Article 56 keeps records for seven years after the period. The FTA’s August 2025 reminder restates those clocks on a live news page. EmaraTax is the portal. Registration is free. Late registration is AED 10,000 under Cabinet Decision No. 75 of 2023. A waiver can clear that penalty if the first return lands within seven months of the first period-end. Confirm the initiative is still open on tax.gov.ae.

Registration under FTA Decision 3 of 2024

For a juridical person that is a Resident Person incorporated, established, or recognised under UAE law on or after 1 March 2024, including a Free Zone Person, the application is due within three months from the date of incorporation, establishment, or recognition. Dual-source that sentence to the Decision PDF and the FTA’s 2024 media statement.

A juridical person recognised under foreign law but effectively managed and controlled in the UAE files within three months from the end of its financial year. Persons already licensed before 1 March 2024 used a month-of-licence table in Decision 3. Those windows have closed. If this company still has no Corporate Tax Registration Number in 2026, you are late. File the application, then read the waiver conditions against your first period-end. Notify the FTA of changes to registration data within 20 business days under Cabinet Decision No. 74 of 2023.

Return in nine months, records for seven years

Article 53(1): file the Tax Return no later than nine months from the end of the tax period. Article 48: pay Corporate Tax Payable on the same clock. The Tax Period is the Financial Year or part thereof (Article 57): the Gregorian calendar year or the twelve-month period for which the person prepares financial statements. A calendar-year company with a 31 December 2025 year-end files and pays by 30 September 2026, the FTA’s own example in the August 2025 reminder.

The return is a self-assessment. This article does not walk the form line by line. A QFZP return has to support Qualifying Income, the de minimis fraction, and the PE split. An SBR election sits in the return for that period.

Article 56(1): keep all records that support the return and that let the Authority ascertain taxable income, for seven years following the end of the tax period. Exempt Persons keep records that let the Authority ascertain exempt status, same seven years. The August 2025 FTA reminder lists the practical set: transactions, assets, liabilities, and shares held at period-end.

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Who is the 15 percent Domestic Minimum Top-up Tax for?

Cabinet Decision No. 142 of 2024 sets the UAE Domestic Minimum Top-up Tax. The Ministry of Finance Top-up Tax page states the scope: Constituent Entities of Multinational Enterprises with annual global revenues of €750 million or more in the Ultimate Parent Entity’s consolidated financial statements in at least two of the four financial years immediately preceding the year the DMTT applies. The tax was effective for financial years starting on or after 1 January 2025. Federal Decree-Law No. 60 of 2023 had already authorised a 15 percent top-up on in-scope MNEs.

If this company is a one-entity free zone or mainland firm, is not a Constituent Entity of an MNE above the €750 million line, and has no UPE consolidating at that scale, DMTT is not your rate. Do not ignore DMTT if you are the UAE entity of a group that already crosses the OECD revenue test. In that case the 9 percent Corporate Tax and the 15 percent top-up are two layers, and QFZP 0 percent on Qualifying Income does not answer the GloBE effective-tax-rate test. SBR’s MNE exclusion (AED 3.15 billion for CbCR) and DMTT’s €750 million test are related family, not the same number.

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What belongs in the books before the first return?

The first useful output is a trial balance that can support ordinary 0 percent / 9 percent, QFZP, or SBR, plus a VAT decision that uses the other AED 375,000.

Open the Corporate Tax Registration Number on EmaraTax inside the Decision 3 window. Diarise the nine-month return. Decide, in writing, whether the period will claim QFZP, elect SBR, or sit on ordinary 0 percent / 9 percent. That decision drives whether you appoint an auditor this year and whether you track Qualifying Activities and the de minimis fraction invoice by invoice.

Related-party charges and intra-group services need contracts and pricing files that Article 34 can survive. A Domestic PE needs its own attributed P&L. Mainland sales from a free zone company without that split are how QFZP status dies.

Crypto, tokens, and wallet flows sit on the same books. Kristian Redin, Partner and COO at Medici Expert, puts the gap this way: “Standard accounting templates don't handle token holdings, staking income or DeFi positions well. We build statements that actually reflect the business.” Nataly Medici, Managing Partner and CEO, has the audit-week version: “We've seen companies discover discrepancies between wallets and ledgers only at audit time. By then, fixing it is far more expensive.”

Accounting and tax support is the calendar: books, the Corporate Tax return nine months after period-end, VAT if you are registered, and the audit pack if you claim QFZP. The job here is to know which tax attaches to this company before the first period closes.

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FAQ

Who needs to register for UAE Corporate Tax?

A Taxable Person registers on EmaraTax. That includes every UAE juridical person, including a Free Zone Person, a foreign company effectively managed in the UAE, a natural person in-scope under Cabinet Decision 49 of 2023, and a Non-Resident with a Permanent Establishment or specified nexus. FTA Decision No. 3 of 2024 gives a new UAE juridical person three months from incorporation. Registration is free. Late filing of the application is AED 10,000.

How do you calculate Corporate Tax for an ordinary company?

Start from accounting income, adjust under Article 20 to taxable income, then apply Cabinet Decision 116: 0 percent on the first AED 375,000 of taxable income and 9 percent on the rest. Revenue is not the tax base. A QFZP uses Article 3(2) instead and does not take the AED 375,000 band on non-qualifying taxable income. SBR, if validly elected, treats taxable income as nil for that period.

What is Qualifying Income for a free zone company?

Cabinet Decision No. 100 of 2023. In outline: income from transactions with a Free Zone Person (except Excluded Activities); income from Qualifying Activities with a Non-Free Zone Person where the Free Zone Person is the Beneficial Recipient; and other income if de minimis is met. Income attributable to a Domestic or Foreign PE, and specified immovable-property income, is out. MD 229 of 2025 lists Qualifying Activities and Excluded Activities.

Can a Qualifying Free Zone Person use Small Business Relief?

No. MD 73 of 2023, the FTA Small Business Relief Guide, and the FTA topics page exclude QFZPs and members of MNE groups above the AED 3.15 billion CbCR line. A Free Zone Person that is not a QFZP may elect SBR if revenue stays at or below AED 3 million in every relevant period through periods ending on or before 31 December 2029 (MD 131 of 2026).

When is the Corporate Tax return due?

Nine months after the end of the tax period (Article 53), with payment on the same clock (Article 48). A 31 December 2025 year-end files on or before 30 September 2026. The tax period is the financial year or part thereof. Keep supporting records for seven years after the period (Article 56).

Who is outside Corporate Tax?

Employment income of a natural person is outside the tax. Personal investments that are not a Business are outside it. Exempt Persons under Article 4 are a statutory list. QFZP 0 percent is a rate on Qualifying Income, not an exemption from being a Taxable Person.

Does a “tax free zone” licence mean 0 percent Corporate Tax?

No. Free zone juridical persons are Taxable Persons from periods starting 1 June 2023. 0 percent applies to Qualifying Income of a QFZP that meets every condition. Non-qualifying taxable income is at 9 percent with no AED 375,000 band. Fail a condition and you lose QFZP for that period and the next four.