UAE corporate tax is now a settled part of doing business in the Emirates, and 2026 is the year many companies file their second or third return under the regime introduced by Federal Decree-Law No. 47 of 2022. The headline 9% rate sits far below most global tax systems, but the details around free zones, Small Business Relief and registration deadlines are where owners get caught out.
This guide breaks down who pays, how the 0% and 9% brackets work, what free-zone companies and freelancers need to know, and the penalties for filing wrong. Every figure below reflects the Federal Tax Authority (FTA) and Ministry of Finance framework as it stands for 2026.
Who Has to Pay UAE Corporate Tax
Corporate tax applies to “taxable persons” carrying on business in the UAE: UAE-incorporated companies, free-zone entities, and foreign companies effectively managed here or with a permanent establishment. It also reaches individuals — natural persons — who run a business and earn more than AED 1 million a year from it. Salaried employment income, personal investment income and personal real estate income sit outside the tax.
The tax is administered by the FTA, and every taxable person must register regardless of whether they expect to owe anything. Registration is a legal obligation, not a function of profit.
The 0% and 9% Brackets
The rate structure is deliberately simple:
- 0% on taxable income up to and including AED 375,000.
- 9% on taxable income above AED 375,000.
So a business with AED 500,000 of taxable profit pays nothing on the first AED 375,000 and 9% only on the remaining AED 125,000 — a bill of AED 11,250. Taxable income is accounting profit adjusted for items the law disallows or exempts, not simply revenue.
Free Zone Qualifying Income
Free zones remain attractive, but the 0% benefit is narrower than the marketing often suggests. A Qualifying Free Zone Person (QFZP) pays 0% on its “qualifying income” and 9% on any income that is not qualifying — and once QFZP status applies, there is no AED 375,000 zero-rated band on the non-qualifying portion.
To keep QFZP status a company must maintain adequate substance in the UAE, earn qualifying income, comply with transfer-pricing rules, and stay within the de minimis limit. That limit caps non-qualifying revenue at the lower of 5% of total revenue or AED 5 million. Breach it and the entity loses QFZP status for that tax period and the following four tax periods, with all income taxed at 9%. If you are still weighing where to base a company, our complete guide to Dubai free zones in 2026 explains how the zones compare on cost and activity.
Small Business Relief
Small Business Relief is one of the most useful — and most time-limited — features of the regime. A resident business with revenue of AED 3 million or less in the relevant tax period (and in all previous periods) can elect to be treated as having no taxable income, meaning it pays no corporate tax and files a simplified return.
The catch is the sunset date. The relief applies to tax periods starting on or after 1 June 2023 and only continues for periods ending on or before 31 December 2026. Unless the Ministry of Finance extends it, assume it disappears after that point. The relief is also closed to Qualifying Free Zone Persons and members of large multinational groups.
EmaraTax Registration and Deadlines
Registration happens through EmaraTax, the FTA’s online portal. You create an account, submit the business’s trade licence and ownership details, and receive a Corporate Tax Registration Number.
The FTA set staggered deadlines for existing companies based on the month their licence was issued, and those windows have now largely passed — so most established businesses should already hold a registration number. New businesses and natural persons crossing the income threshold have their own deadlines and should register promptly rather than wait for the first filing. If you are setting up now, our walkthrough on setting up a business in Dubai in 2026 covers licensing before you reach the tax step.
Filing and Payment
Corporate tax works on a self-assessment basis. There is one return per tax period, filed through EmaraTax, and both the return and any payment are due within nine months of the end of the tax period. A company whose financial year ended on 31 December 2025 must therefore file and pay by 30 September 2026. Businesses must keep supporting records for at least seven years, even when no tax is due.
Penalties
The penalty regime is where inaction gets expensive:
- Late registration: a fixed administrative penalty of AED 10,000, payable even if no tax is owed.
- Late filing and late payment: separate penalties apply on top of registration fines, so missing several obligations compounds quickly.
The FTA has run a penalty-waiver initiative for late registration: a business can have the AED 10,000 penalty waived if it files its first corporate tax return (or annual declaration) within seven months of the end of its first tax period, rather than the usual nine. Registering late and then doing nothing does not trigger the waiver — you must file early to benefit.
The 15% DMTT for Large Multinationals
From financial years starting on or after 1 January 2025, the UAE applies a Domestic Minimum Top-up Tax (DMTT) aligned with the OECD Pillar Two global minimum tax rules. It targets multinational groups with consolidated global revenue of EUR 750 million or more in at least two of the four preceding financial years.
The DMTT ensures such groups pay an effective rate of at least 15% on their UAE profits. Where a group’s UAE effective rate falls below 15% — for example through free-zone benefits — a top-up tax lifts it to that floor. It does not touch ordinary UAE businesses; small and mid-sized companies remain on the standard 9% regime.
What It Means for Free-Zone Companies and Freelancers
Free-zone companies should not assume 0% is automatic. Confirm your activities count as qualifying income, watch the de minimis limit, and maintain real substance — otherwise the whole entity can drop to 9%. Freelancers only enter the tax net once business income tops AED 1 million a year, but should register and track revenue carefully, as many will qualify for Small Business Relief while it lasts. Anyone on a freelance permit can review the wider cost picture in our 2026 UAE freelance and remote-work visa guide.
Frequently Asked Questions
Do I still have to register if my profit is below AED 375,000?
Yes. Registration on EmaraTax is mandatory for taxable persons regardless of profit. The AED 375,000 threshold only sets where the 9% rate begins — it does not remove the obligation to register and file, and failing to register carries a AED 10,000 penalty.
Is Small Business Relief guaranteed to continue after 2026?
No. As the rules stand, Small Business Relief applies only to tax periods ending on or before 31 December 2026. Any continuation would require a new decision from the Ministry of Finance, so businesses should plan on the basis that it ends unless an extension is formally announced.
Does the 15% DMTT affect my small UAE company?
No. The DMTT applies only to large multinational groups with global revenue of at least EUR 750 million. Standard UAE businesses, free-zone SMEs and freelancers stay under the normal 0%/9% corporate tax rules and are not subject to the 15% top-up.
