UAE Corporate Tax 2026: 9% Rate, Who Pays, Exemptions & Filing Steps

UAE Corporate Tax is a federal tax charged on adjusted business profit. Mandated UAE businesses must calculate taxable profit, apply the correct rate or exemption, register on EmaraTax, and file and pay within the statutory deadline.

Key Takeaways

• Ordinary taxable persons pay 0% on the first AED 375,000 of taxable income and 9% on the excess.
• Free zone companies remain within scope; 0% applies only to Qualifying Income earned by a Qualifying Free Zone Person.
• Natural persons enter scope when UAE business turnover exceeds AED 1 million in a calendar year.
• Corporate tax returns and payments are due within nine months after the end of the tax period.
• Domestic Minimum Top-up Tax applies separately to in-scope multinational enterprise groups.
• Late corporate tax registration carries an AED 10,000 penalty unless the waiver conditions are met.

What Is Corporate Tax in the UAE?

UAE Corporate Tax is a direct federal tax on the net income or profit of corporations and other businesses introduced under Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses.

The law applies to tax periods starting on or after 1 June 2023. The applicable start date depends on the financial year followed by the business.

A business with a calendar-year financial year entered the corporate tax regime on 1 January 2024. A company with a financial year running from 1 July to 30 June entered the regime on 1 July 2023.

Who Is Subject to Corporate Tax in the UAE?

UAE Corporate Tax applies to companies and other taxable persons with a relevant connection to the UAE. The following table summarises the main categories.

Special Cases

• A UAE branch of a UAE company is generally treated as part of the same taxable person. A branch, office, or other fixed presence of a foreign company may create a Permanent Establishment in the UAE.
• Dormant and loss-making companies may still have registration and filing obligations. Corporate Tax scope should therefore be assessed separately from profitability or active sales.

What Is the UAE Corporate Tax Rate in 2026?

The UAE Corporate Tax regime is not a single-rate system. The applicable rates are:

Who Is Exempt from Corporate Tax in the UAE?

An exemption applies only when the person falls within an exempt category and satisfies the relevant conditions. An organisation does not qualify merely because it operates in the public, investment, pension, or natural-resource sector.

The FTA guidance for Exempt Persons separates exemptions by category and approval process.

Person Exempt from Corporate tax

• Exempt Person Category
• Government Entity
• Government Controlled Entity
• Extractive Business
• Non-Extractive Natural Resource Business
• Qualifying Public Benefit Entity
• Qualifying Investment Fund
• Public pension or social-security fund
• Private regulated pension or social-security fund
• UAE juridical person wholly owned and controlled by an eligible Exempt Person
• Person listed through a Cabinet Decision

Income Exempt from Corporate Tax

Exempt Person status and exempt income are different concepts. An Exempt Person falls outside the standard corporate tax charge for the exempt activities. A taxable company remains within the regime but removes specified exempt income from its tax calculation.

Common exempt-income categories include:

• Dividends received from UAE resident juridical persons
• Income and gains covered by the participation exemption
• Foreign Permanent Establishment income covered by an exemption election
• Income from operating aircraft or ships in international transportation when the statutory conditions are satisfied

Note: Expenses incurred to derive exempt income are not deductible. When an expense relates to taxable and exempt income, the business must apply a fair and reasonable allocation method.

Corporate Tax Compliance Requirements

Corporate tax compliance is an annual filing obligation supported by year-round financial controls.

Businesses must:

• Register within the applicable deadline.
• Maintain complete accounting records and financial statements.
• Retain supporting records for at least seven years after the end of the relevant tax period.
• File the corporate tax return within nine months after the end of the tax period.
• Pay the corporate tax liability within the same deadline.
• Track transactions with Related Parties and Connected Persons.
• Review free zone income classifications before claiming the 0% QFZP rate.
• Maintain evidence for exemptions, deductions, reliefs, and tax-loss utilisation.
• Prepare audited financial statements when the audit rules apply.
• Update corporate tax registration records when registered details change.

How to Calculate Corporate Tax in the UAE

A practical calculation sequence is:

1. Identify the taxable person and the tax period.
2. Confirm whether the entity is a mainland company, free zone company, Exempt Person, or member of an in-scope multinational group.
3. Start with accounting net profit or loss before tax from the financial statements.
4. Remove exempt income that satisfies the statutory conditions.
5. Add back non-deductible expenses and apply restrictions to partially deductible expenses.
6. Apply transfer-pricing adjustments for Related Party and Connected Person transactions.
7. Apply eligible reliefs, tax losses, and foreign tax credits.
8. Separate Qualifying Income and taxable income that is not Qualifying Income for a Qualifying Free Zone Person.
9. Apply the correct rate.
10. Reconcile the computation with the corporate tax return and supporting schedules.

Corporate Tax Calculation Example

A mainland company has taxable income of AED 1,000,000 after all corporate tax adjustments.

The calculation is:

The result changes when the company claims Small Business Relief, uses eligible tax losses, receives exempt income, or falls within the free zone regime.

Common Corporate Tax Adjustments

The accounting result changes when corporate tax rules treat an item differently from the financial statements.

The main adjustments include:

• Exempt income: Eligible dividends, participation-exemption income, and elected foreign Permanent Establishment income are removed from taxable income.
• Non-deductible expenses: Fines, penalties, unlawful payments, and expenses not incurred wholly and exclusively for the business are added back.
• Entertainment expenditure: Only 50% of qualifying entertainment expenditure is deductible.
• Interest expenditure: Net-interest deductions are restricted under the general interest-deduction limitation rule and the specific related-party rules.
• Related-party pricing: Transactions must reflect arm’s-length terms. A tax adjustment is required when recorded pricing does not meet that standard.
• Tax losses: Eligible carried-forward losses offset taxable income subject to the statutory utilisation limit.
• Foreign tax credits: Foreign tax paid on the same income reduces UAE Corporate Tax up to the UAE tax payable on that income.

UAE Corporate Tax Registration Requirements

Every Taxable Person must register for corporate tax and obtain a Corporate Tax Registration Number. Free zone companies are included. The FTA Corporate Tax Registration service is available through EmaraTax.

Documents Required for Corporate Tax Registration

The FTA registration service requests:

• Certificate of incorporation
• Memorandum of association or partnership agreement, where available
• Commercial-registration certificate or comparable official licensing document
• Valid trade licence, including branch licences where applicable
• Emirates ID and passport of owners holding more than 25% ownership
• Emirates ID and passport of authorised signatories
• Proof of authorisation for the signatory

Key Corporate Tax Registration Deadlines

The following deadlines apply to common cases arising on or after 1 March 2024:

How to File a UAE Corporate Tax Return on EmaraTax

UAE Corporate Tax returns must be filed electronically through EmaraTax. The return and tax payment are generally due within nine months after the end of the tax period. For example, a company with a tax period ending on 31 December 2025 must file and pay by 30 September 2026.

The FTA Corporate Tax Returns Guide explains the return fields and schedules required for different taxpayer categories.

How to File a UAE Corporate Tax Return on EmaraTax

UAE Corporate Tax returns must be submitted online through EmaraTax. The filing deadline and payment deadline are generally the same: within nine months after the end of the tax period.

Example: A business with a tax period ending on 31 December 2025 must file its return and pay any tax due by 30 September 2026.

Step 1: Prepare the Required Records

Complete the financial statements before starting the return. The business should also prepare:

• Accounting profit or loss before tax
• Tax-adjustment schedule
• Exempt-income review
• Tax-loss details
• Related-party transaction records
• Free zone income classification, where applicable
• Supporting documents for reliefs and elections

Step 2: Select the Correct Taxpayer Profile

Log in to EmaraTax and open the relevant taxable-person profile. Businesses managing multiple entities should verify the legal name, Corporate Tax Registration Number, and tax period before entering any information.

Step 3: Complete the Return

Complete the sections relevant to the business, such as deductions, exempt income, tax losses, foreign tax credits, related-party transactions, free zone treatment, and relief claims.

Step 4: Review and Submit

Reconcile the return with the financial statements and tax workpapers before submission. 

Step 5: Pay the Tax Due

Follow the FTA payment guidance to settle the liability through the generated GIBAN reference, MagnatiPay card payment, or the available bank-transfer option.

Use the exact payment reference generated in EmaraTax to ensure the payment is allocated correctly.

Read More: The FTA Corporate Tax Returns Guide provides detailed instructions for completing the return fields and supporting schedules.

UAE Corporate Tax for Free Zone Companies

Free zone companies are businesses incorporated or registered in designated UAE free zones and licensed by the relevant free zone authority with certain perks and benefirts/

Conditions for the 0% Rate

A QFZP must meet all applicable conditions throughout the tax period:

• A Free Zone Person receives the 0% rate only when it qualifies as a Qualifying Free Zone Person (QFZP) and earns Qualifying Income. 
• Meet the minimum threshold, apply arm’s-length pricing, and maintain transfer-pricing documents where required.
• Non-qualifying revenue must not exceed the lower of 5% of total revenue or AED 5 million.
• Prepare audited financial statements and avoid electing for the standard corporate tax regime.
• Non-Qualifying Income is taxed at 9%, without the ordinary AED 375,000 taxable-income band.

Qualifying and Excluded Activities

Note: Excluded Activities include banking, most insurance and finance activities, restricted immovable-property income, and most transactions with natural persons.

What Is Small Business Relief for Corporate Tax?

Small Business Relief allows an eligible Resident Person to elect for simplified corporate tax treatment. 

The FTA Small Business Relief guidance sets the eligibility rules.

Note: A business electing for Small Business Relief is treated as having no taxable income for the period. It cannot use deductions, exemptions, reliefs, or tax-loss utilisation that depend on the standard taxable-income calculation for that period

Domestic Minimum Top-Up Tax

The UAE Domestic Minimum Top-up Tax (DMTT) applies separately from the standard corporate tax calculation. It covers UAE entities within multinational groups with consolidated annual revenue of at least EUR 750 million in at least two of the four preceding financial years.

DMTT applies to financial years starting on or after 1 January 2025 and is designed to achieve a minimum effective tax rate of 15% under the OECD Pillar Two framework. In-scope groups must complete a separate effective-tax-rate assessment in addition to the standard UAE Corporate Tax calculation.

UAE Corporate Tax Penalties in 2026

Corporate-tax-specific penalties apply when a Taxable Person misses registration, filing, or payment deadlines.

The FTA filing and payment notice confirms the return-cycle penalties.

Late-Registration Penalty Waiver

The AED 10,000 late-registration penalty may be waived or refunded when the required filing is completed on time.

• Taxable Persons must file their first corporate tax return within seven months after the end of the first tax period.
• Exempt Persons required to register must submit their first annual declaration within seven months after the end of the first financial year.
• Any refunded penalty is credited to the taxpayer’s EmaraTax corporate tax account.

Conclusion

The UAE corporate tax can get businesses into trouble if they treat compliance as a last-minute filing compliance. The 9% rate is only one a calculation number. Companies also need to confirm if their free zone income genuinely qualifies for the 0% rate, and whether their accounting records are reliable. VAT returns alone will not be enough. 

Corporate tax compliance falls on correct financial statements, right expense classification, and trial based supporting records. Businesses that organise the documentation and accounting early will find filing manageable.