A company set up in the UAE, free zone companies included, is a resident taxable person§ from its first financial year starting on or after 1 June 2023§. A sole trader or freelancer is only in scope once business turnover passes AED 1,000,000§ in a calendar year. For those in scope, the first AED 375,000§ of taxable income is charged at 0%§ and the rest at 9%§, with the return and payment due 9 months§ after the tax period ends.
Does corporate tax apply to my business?
It depends first on what kind of person holds the licence, and the law treats the two cases very differently.
If you trade through a company
A limited liability company, a branch or any other juridical person incorporated or recognised in the UAE is a resident taxable person, and that includes a company in a free zone. Free zone businesses are taxable persons§ in the same way; a Qualifying Free Zone Person can get 0% on its Qualifying Income, which is narrower than everything it earns. That case has its own free zone guide. For a company, being small does not take you out of scope. It changes what you pay, not whether you register and file.
If you are a sole trader or freelancer
A natural person is only subject to corporate tax on business activity when total turnover from that activity exceeds AED 1,000,000§ within a Gregorian calendar year. Some income never counts towards that figure, whatever the amount: wages, personal investment income and real estate investment income§. A person whose business activity is not caught by the rule is not required to register§.
In practice this means a large number of sole establishment and freelance licence holders have nothing to do for corporate tax at all. Take a hypothetical freelance designer invoicing AED 800,000 in 2026 while also drawing a salary from a part-time job: the salary is ignored, the business turnover is under AED 1,000,000, and there is no registration. If the same designer invoices AED 1.2 million the following year, the business is in scope for that year and the registration clock starts.
When do I have to register?
The FTA sets the timeframes by decision. A resident company incorporated on or after 1 March 2024 must apply within three months§ of incorporation. A resident natural person whose business turnover crosses the threshold must apply by 31 March of the following calendar year§. Companies licensed before March 2024 were given dates by licence month during 2024, and those dates have passed.
Missing the registration deadline carries an administrative penalty of AED 10,000§. The FTA runs a waiver: the penalty is removed if the first tax return is filed within 7 months§ of the end of the first tax period. The details, and the other penalty amounts, are in the penalties guide.
How do the 0% and 9% bands work?
The bands apply to one figure: taxable income for the period. Take a Dubai design studio run as a company, with AED 640,000 of taxable income. The first AED 375,000 is charged at nothing. The remaining AED 265,000 is charged at 9%, which is AED 23,850. The effective rate on the whole amount is 3.7%, and it climbs towards 9% as profit grows without ever reaching it.
Chart data
| Taxable income | Corporate tax due |
|---|---|
| Taxable income AED 375,000 | AED 0 |
| Taxable income AED 600,000 | AED 20,250 |
| Taxable income AED 1,000,000 | AED 56,250 |
| Taxable income AED 2,000,000 | AED 146,250 |
Is taxable income the same as my revenue?
No, and this is where most early estimates go wrong. Taxable income starts from accounting profit and is then adjusted under the Corporate Tax Law. An invented but typical case: a trading business invoices AED 2 million, feels busy all year, and lands under the threshold once cost of sales and overheads are counted. Another holds AED 400,000 in the bank on 31 December and owes nothing, because a cash balance is not profit.
You cannot know your tax until the books for the period are closed properly. If bookkeeping runs a quarter behind, the tax position is a guess. The bookkeeping cost guide shows what keeping that current costs at different transaction volumes.
Can Small Business Relief bring the tax to zero?
Often, yes. A resident person whose revenue stays at AED 3,000,000§ or below, in this tax period and every earlier one, can elect Small Business Relief and be treated as having no taxable income§. It now covers tax periods ending on or before 31 December 2029§. The relief is elected in the tax return§, so it does not happen on its own, and it does not remove registration or filing. The relief guide covers who is excluded and the revenue history test.
When is the return due, and how long do I keep records?
File and pay within 9 months§ of the end of the tax period. A business whose financial year is the calendar year therefore works to 30 September of the following year. The deadlines guide works that through for March and June year ends too.
Records that support the return must be kept for 7 years§. That is longer than most small businesses keep anything, and longer than many cloud accounting plans hold history after a downgrade, so export an archive at each year end.
What does it cost to have someone file?
Published fees for an annual corporate tax filing sit at AED 2,500–5,000 a year¤. Where the firm also prepares supporting documentation and gives advice, the same market quotes AED 5,000–10,000¤. Some providers sell the return inside an annual package with the bookkeeping: one online provider lists AED 829–3,238 a month¤, rising with the number of transactions. All of these assume books that are already in order; none is the price of rebuilding a year of unreconciled transactions in August.
Filing without a firm is allowed. The FTA states that returns can be filed through EmaraTax or an approved tax agent§. Whether that is sensible depends less on the form than on your confidence in the adjustments behind the number. The decision guide sets out when each route fits.
Questions owners ask
My company made a loss. Do I still file? Yes. The return obligation sits on the taxable person, and a company is one whether it made money or not. A loss year is also the year you want on record, because it can matter for later periods.
I hold a freelance permit and have a salaried job. Is my salary taxed? No. Wages are excluded from the natural person rule, and only business turnover counts towards the AED 1,000,000 test.
Do I pay 9% on everything once I pass AED 375,000? No. The 0% band always applies to the first AED 375,000 of taxable income; only the part above it is charged at 9%.
Where do I check my own dates? Start with your own EmaraTax account, and ask an FTA-registered tax agent if anything about your structure is unusual.
To put your own figure through the bands, use the corporate tax calculator.