Corporate tax applies from the first financial year that began on or after 1 June 2023. The first AED 375,000 of taxable income is charged at 0%, and everything above that at 9%. The return and the payment are both due 9 months after the tax period ends.
Who this actually applies to
If you hold a commercial licence in the UAE and run a business through it, you are in scope. So is a company in a free zone: free zone businesses are taxable persons for corporate tax, and a Qualifying Free Zone Person gets 0% only on its Qualifying Income, which is a narrower thing than "everything we earn". That case has its own guide.
Being in scope is not the same as owing money. A large share of small UAE businesses will compute a tax of zero and still have to register, file and keep records. That administrative work is where the cost sits for most readers of this page.
How the two bands work
The bands apply to one figure: taxable income for the period. Take a Dubai design studio 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 |
Taxable income is not your revenue, or your bank balance
This is the step that catches people. Taxable income starts from accounting profit and is then adjusted under the Corporate Tax Law. A business can invoice AED 2 million, feel busy all year, and land well under the threshold once costs are counted. Another can hold AED 400,000 in the bank on 31 December and owe nothing, because cash in an account is not profit.
The practical consequence: you cannot know your tax until the books for the period are closed properly. If your bookkeeping runs a quarter behind, your tax position is a guess. Our bookkeeping cost guide covers what keeping that current is worth paying for.
Small Business Relief, if your revenue is modest
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 runs to 31 December 2029. It is elected in the return, so the election happens on the form, not automatically, and the obligation to file does not disappear. The relief guide has the exclusions.
When you file, and how long you keep things
File and pay within 9 months of the end of the tax period. A calendar-year business therefore works to 30 September. Records that support the return must be kept for 7 years, which is longer than most small businesses keep anything, and longer than many cloud accounting plans retain history on a downgrade.
What it costs to have someone do it
Published fees for an annual corporate tax filing sit at AED 2,500–5,000 a year. Where a firm is also preparing documentation and giving advice, the same market quotes AED 5,000–10,000. Both are prices firms advertise rather than quotes to you, and both assume your books are already in order. They are not the price of rescuing a year of unreconciled transactions in August.
Filing without a firm is allowed: the FTA states 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.
What we have deliberately left out
Registration deadlines and penalty amounts. Both are set by decisions we could not verify in their current form on 12 September 2026, and on a page about a tax we would rather show a gap than a number we cannot stand behind. The FTA's legislation page is the place to check them, and a registered tax agent can confirm your own dates.
To put your own figure through the bands, use the corporate tax calculator.