UAE Corporate Tax: What International Companies Need to Know
- 22 October 2026
- Posted by: Fourseas Global
- Category: Insights
For decades the UAE was known for having no federal corporate income tax for most businesses. That changed with Federal Decree-Law No. 47 of 2022, which introduced corporate tax for financial years starting on or after 1 June 2023. For international companies operating in or through the UAE, understanding the rules is now part of every expansion plan.
This article is general information, not tax advice. Rules and guidance are updated regularly by the UAE Ministry of Finance and the Federal Tax Authority (FTA); always check the current position for your case.
Who is subject to UAE corporate tax?
- Companies and other juridical persons incorporated in the UAE, including free zone entities
- Foreign companies effectively managed and controlled in the UAE
- Foreign companies with a permanent establishment or certain UAE-sourced income
- Individuals carrying on business in the UAE above the turnover threshold set by the rules
The rates
| Taxable income | Rate |
|---|---|
| Up to AED 375,000 | 0% |
| Above AED 375,000 | 9% |
| Qualifying income of a Qualifying Free Zone Person | 0% |
Large multinational groups within the scope of the OECD Pillar Two rules should also review the UAE’s domestic minimum top-up tax, which applies from 2025 to groups meeting the global revenue threshold.
Free zone companies
Free zone entities must register for corporate tax. To keep the 0% rate on qualifying income they need to meet conditions such as maintaining adequate substance in the free zone, earning qualifying income, complying with transfer pricing rules and preparing audited financial statements. Income that does not qualify is taxed at 9%.
Registration, filing and records
- Register with the FTA within the deadlines that apply to your entity type.
- File a corporate tax return and pay any tax within nine months of the end of the tax period.
- Keep financial records and supporting documents for the required retention period.
- Apply arm’s length pricing to transactions with related parties and connected persons.
Small business relief
Resident businesses with revenue below the threshold set by the Ministry of Finance can elect small business relief for eligible tax periods, which treats them as having no taxable income. Eligibility conditions and the periods covered should be checked carefully.
Planning points for international groups
- Structure: mainland, free zone or both? The choice affects tax, market access and substance requirements. See mainland vs free zone.
- Transfer pricing: document intra-group services, financing and IP charges.
- Double tax treaties: the UAE has an extensive treaty network that can reduce withholding taxes abroad.
- Audit readiness: clean, audited accounts support both compliance and future investors. Our audit service can help.
Fourseas Global provides international tax advisory and financial advisory to companies operating in the UAE. Contact our Dubai team to review your structure.
Frequently asked questions
What is the corporate tax rate in the UAE?
The standard rate is 9% on taxable income above AED 375,000, with 0% applying to taxable income up to that threshold. Qualifying free zone persons can benefit from 0% on qualifying income.
When did UAE corporate tax start?
It applies to financial years starting on or after 1 June 2023.
Do free zone companies pay corporate tax?
Free zone companies are within the corporate tax system and must register. Those that meet the conditions to be a Qualifying Free Zone Person can apply 0% to qualifying income, while other income is taxed at 9%.