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Understanding UAE Corporate Tax
Overview of new UAE corporate tax laws, 9% rate, AED 375,000 threshold, and OECD Pillar Two implications.
The introduction of Corporate Tax (CT) in the UAE, starting June 1, 2023, has transformed the financial environment for companies across the country, particularly in major centers like Dubai and Abu Dhabi.
The corporate tax rate is set at 9% for taxable income above AED 375,000, while income below this limit is taxed at 0% to aid small businesses and startups. Entities in free zones can take advantage of a 0% tax rate on eligible income if they fulfill specific criteria, including having sufficient economic substance, not withdrawing from the free zone system, and adhering to additional regulatory standards. All non-qualifying income from free zone firms is subject to the standard 9% tax rate.
What this means for Businesses in UAE
- Periods & scope : CT applies for financial years starting on or after 1 June 2023. UAE-resident juridical persons (LLC, PSC, PJSC, etc.) are taxed on worldwide income; non-residents are taxed on UAE-sourced income attributable to a PE or nexus. Independence & objectivity across planning, fieldwork, and reporting.
- Tax base : starting from accounting profit (IFRS) with specified additions/deductions and exempt income rules.
- IFree zones : 0% may apply to Qualifying Income of Qualifying Free Zone Persons, subject to substance, audited financials, qualifying activities, and de-minimis limits; non-qualifying income is taxed at 9%.
- Pillar Two : Large multinational groups should assess potential OECD Pillar Two impacts (top-up to a 15% minimum) and related UAE implementation updates.
- Record-keeping : robust books, transfer-pricing (TP) documentation, and timely returns are essential to avoid penalties.
Our Corporate Tax Services
Corporate tax advisory
Entity-by-entity impact assessment, group structuring options, loss-utilisation planning, and CT readiness roadmaps aligned to your business model.
CT registration & filing
End-to-end support—registration on the FTA portal, tax period mapping, return preparation, review, and timely submission with supporting schedules.
CT compliance reviews
Diagnostic checks on revenue recognition, deductibility, related-party transactions, and TP policies; control gaps and remediation plan.
Tax return preparation
Reconciliation from trial balance to CT return, adjustments, elections, disclosures, and management sign-off pack.
Transfe pricing support
TP policy design, benchmarking, inter-company agreements, Master File/Local File readiness, and CBC/notifications where applicable.
Free Zone & Mainland guidance
Qualifying Free Zone Person (QFZP) assessment, qualifying activity mapping, de-minimis testing, and interaction with Mainland transactions.
Why Choose Digits for Corporate Tax?
- UAE tax law regulations expertise
- Registered consultants
- Transparent process
- Industry-specific insights
On-time filings and proactive tax planning
What differentiates Digits
Business-first approach
Advice anchored to commercial outcomes (cash flow, governance, investor readiness).
Audit-ready documentation
Clear audit trail, sign-off packs, and controls to reduce compliance risk.
Tool-enabled workflows
Cloud files, checklists, and deadline trackers to keep teams aligned across Entities and Free Zones.
Corporate Tax Calculation Guide
• AED 0–375,000: 0%
• AED 375,001+: 9%
Taxable Income up to AED 375,000: 0%
Taxable Income over and above AED 375,000: 9%
- Example A: Taxable income AED 300,000 → CT AED 0.
- Example B: Taxable income AED 500,000 → 0% on AED 375,000 + 9% on AED 125,000 = AED 11,250.
- Example C (Free Zone): If you qualify as a QFZP, qualifying income may be at 0%; non-qualifying income still taxed at 9%. (Assessment required.)
Profit/Loss incorporated by the company before expense
Less: Allowed Expenses
Add: Disallowed Expenses
Net Taxable Income
Gross Corporate Tax Payable
Net Corporate Tax Payable
The information provided by this UAE corporate tax calculator is for general guidance and illustrative purposes only, and is not intended to be used by non-tax professionals. The results of the calculator are derived from the information entered by the user and do not constitute tax advice or a tax opinion. The calculator does not take into account all the factors that may affect the tax liability of a corporation in the UAE, such as exemptions, deductions, losses, etc. The user should consult a qualified tax advisor before making any tax-related decisions or filing any tax returns. We do not accept any liability for any errors, omissions, or inaccuracies in the calculator or for any loss or damage arising from its use..
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FAQs – Corporate Tax in UAE
What is the corporate tax rate in UAE?
Companies whose taxable Income is up to AED 375,000 is 0%.
Companies taxable income over and above AED 375,000 is 9%.
Large multinational groups should also monitor OECD Pillar Two rules that can create a 15% minimum effective tax rate for in-scope groups.
Who needs to register for corporate tax?
All Legal types are required to register for Corporate tax, sole establishment companies need to cross AED 1 million to register for corporate tax.
Generally, UAE juridical persons (LLC/PSC/PJSC, etc.) are required to register regardless of turnover; natural persons conducting a business in the UAE register when business turnover exceeds prescribed thresholds (e.g., AED 1m). Specifics depend on your legal form and activities.
What is the deadline to file?
Depending on the financial year of the company the FTA will provide the Corporate tax due date to be filed.
Typical pattern: returns are due after the end of the tax period within FTA-specified timelines. Your exact CT return and payment due dates are calculated from your financial year start date.
Do Free Zone companies pay tax?
Freezone companies do enjoy 0% corporate tax if they meet certain conditions set by the tax authorities.
Only Qualifying Free Zone Persons earning qualifying income may benefit from 0%. Non-qualifying income (and entities that fail conditions like substance, audited accounts, or de-minimis limits) is taxed at 9%.
What if I don’t register?
If the company does not register for Corporate tax within the given timeframe, the FTA will issue a late Corporate tax registration penalty for the company of AED 10,000.
Additional administrative penalties may apply for late filing, late payment, or incomplete/incorrect returns. Good governance and on-time submissions reduce exposure.
What documents will I need for CT registration and filing?
Trade licence, legal formation docs, Emirate & Free Zone details (if any), shareholder/related-party list, latest audited/management accounts, chart of accounts, inter-company agreements, and authorisations for FTA portal access.
How do transfer pricing rules affect my company?
If you have related-party transactions, the UAE TP framework requires arm’s-length pricing, documentation (Local/Master File where in scope), and disclosures in the CT return. Early policy design avoids disputes.