United Arab Emirates Corporate Income Tax
Detailed corporate income tax rates and rules for United Arab Emirates in 2026.
Effective for financial years starting on or after 1 June 2023, the UAE introduced a federal corporate tax under Federal Decree-Law No. 47 of 2022. The corporate tax applies at 0% on taxable profits up to AED 375,000, and 9% on taxable profits exceeding AED 375,000. This makes the UAE's corporate tax rate one of the lowest in the world. The tax applies to all UAE businesses and commercial activities, including those conducted by freelancers and sole proprietors, unless specifically exempted. Qualifying Free Zone Persons can benefit from a 0% corporate tax rate on qualifying income, provided they meet all conditions, including maintaining adequate substance and not electing to be subject to the standard regime.
Standard Rate
9%
Small Business Rate
0%
Additional Notes
Key exemptions and special provisions include: (1) Free Zone businesses meeting qualifying conditions pay 0% on qualifying income and 9% only on non-qualifying income; (2) Government entities, government-controlled entities, qualifying public benefit entities, and qualifying investment funds are exempt; (3) Businesses engaged in the extraction of natural resources remain subject to existing emirate-level taxation and are outside the scope of the federal corporate tax; (4) IMPORTANT: Effective January 1, 2025, the UAE implemented a 15% Domestic Minimum Top-up Tax (DMTT) for multinational enterprise groups with consolidated global revenues exceeding EUR 750 million, in line with OECD Pillar Two (Global Minimum Tax). This ensures large MNEs pay at least 15% effective tax on their UAE profits; (5) Small businesses with revenue up to AED 3 million may elect for simplified small business relief with reduced compliance obligations through 2026; (6) Groups of companies may elect to form a tax group and file a single return; (7) Transfers within a qualifying group and business restructurings may benefit from relief provisions.
How United Arab Emirates Corporate Tax compares
United Arab Emirates’s corporate tax rate of 9% is the 189th highest of 203 countries TaxAtlas tracks, below the global average of 22.2% and Asia’s regional average of 19.7%.
