A zero rate for the first AED 375,000 does not mean that the company is exempt from registration, accounting and declaration. UAE corporate tax is a full-fledged self-assessment regime, in which accounting profits are adjusted according to tax rules, and the report and tax are submitted within nine months after the end of the period.
- For ordinary business, 0% applies to taxable income up to AED 375,000 and 9% on excess.
- The calculation starts with the accounting result and requires tax adjustments.
- The tax return and payment are usually filed no later than nine months after the end of the tax period.
- Small Business Relief can be applied to revenues of AED 3 million or less, but only for periods ending no later than 31 December 2026 and subject to conditions being met.
01
Who is in the tax sphere
The regime covers companies and other legal entities established in the UAE, as well as foreign legal entities if they are effectively managed and controlled from the UAE. A non-resident may be taxed through a permanent establishment, nexus or other statutory nexus.
A free zone company is also a Taxable Person and is required to register. A 0% rate for it is possible only with the Qualifying Free Zone Person status and only in relation to Qualifying Income.
02
Rates 0% and 9%
For an ordinary taxable person, the rate is 0% on the portion of taxable income up to AED 375,000 and 9% on the excess. The threshold relates to taxable income, not turnover or the amount of money in the bank account.
For large international groups, global minimum tax rules are assessed separately; they do not reduce to the usual 0%/9% scale.
03
How is the tax base calculated?
The starting point is accounting income - net profit or loss before tax on financial statements. Adjustments are then applied to exclude statutory exempt income, examine deductions, related party transactions, loss carryforwards, and applicable relief.
04
Costs, Interest and Limits
An expense generally must be incurred solely for business purposes and not be included in exempt income. Fines, bribes, profit sharing and other expressly excluded amounts do not reduce the basis. Entertainment expenses are subject to a partial limit, and net interest expenses are subject to a total limit.
The general interest limitation applies to amounts in excess of the de minimis and limits the deduction to generally 30% of adjusted EBITDA. For certain loans from a related party, the commercial purpose is additionally verified.
05
Small Business Relief and other reliefs
A Resident Person with revenue of no more than AED 3 million in the current and each previous relevant period can choose Small Business Relief, unless he falls into the excluded categories. The choice is made in the declaration; There is no automatic application.
In the current version, the threshold applies to tax periods ending no later than December 31, 2026. Qualifying Free Zone Person and a member of a large international group with consolidated revenues in excess of AED 3.15 billion cannot take advantage of the regime.
Even if you choose relief, you must register, file a return, and keep proof of eligibility. Exceeding AED 3 million in any previous relevant period denies access to relief.
06
Losses and group companies
Tax losses can be carried forward to future periods if conditions are met, but the amount of use in a given period is limited by law. It is possible to transfer losses between qualifying group companies, and resident companies, when meeting the requirements, can create a Tax Group and report as one taxable person.
Intra-group restructurings and business transfers may receive special relief, but usually require continuity of ownership, fulfillment of formal conditions and subsequent monitoring of events that could eliminate the relief.
07
Registration, declaration and deadlines
The taxable person registers with the FTA through EmaraTax and receives a Corporate Tax Registration Number. The declaration is submitted electronically, and the tax is paid within nine months after the end of the tax period.
The end of the financial and tax period in a typical calendar example.
The deadline for filing a return and paying taxes for such a period.
The general retention period for supporting tax records and documents.
The FTA emphasizes that the obligation to file a return remains regardless of income level, as long as the person is a registered Taxable Person and does not have a special exception.
08
Work plan for the company
- 01
Determine resident status, tax period and registration deadlines.
- 02
Close financial statements and reconcile them with EmaraTax data.
- 03
Separate taxable, exempt and foreign income.
- 04
Review deductions, interest expenses, entertainment expenses and related party transactions.
- 05
Evaluate tax credits, losses, foreign tax credits, and tax brackets.
- 06
Prepare the declaration, confirmation file and payment in advance.