Yes, the UAE now has a corporate tax. For financial years beginning on or after 1 June 2023, businesses pay 9% on taxable profits above AED 375,000 and 0% on the first AED 375,000 (UAE Government Portal, 2026). Personal income stays untaxed. Salaries, personal investment returns and personal real-estate income sit outside the tax, so an employee or private investor in Dubai still pays 0%.
This is a profits tax on businesses, not a turnover tax and not a personal income tax. It applies to mainland and free zone companies, to foreign entities with a UAE presence, and to individuals who run a business above a turnover threshold. Below we explain the rate, who falls in scope, what changed in 2025, and how the UAE compares with the UK and Europe. For where this sits in a wider structuring decision, see our guide on company formation in Dubai across mainland, free zone and offshore.
Key Takeaways
- UAE corporate tax is a banded rate: 0% on taxable income up to AED 375,000, then 9% above it, for financial years from 1 June 2023 (UAE Government Portal, 2026).
- There is no personal income tax in the UAE. Salary, personal investment income and personal real-estate income are outside the corporate tax base (UAE Government Portal, 2026).
- The legal basis is Federal Decree-Law No. 47 of 2022, issued December 2022 (Federal Tax Authority, 2026).
- A natural person running a business with turnover above AED 1,000,000 in a Gregorian year is in scope under Cabinet Decision 49 of 2023 (Federal Tax Authority, 2023).
- A 15% Domestic Minimum Top-up Tax applies to large multinational groups with revenue of EUR 750 million or more, for financial years from 1 January 2025 (UAE Ministry of Finance, 2026; EY, 2025).
- Free zone 0% is conditional, not automatic, and every taxable person must still register with the Federal Tax Authority even at a 0% rate.
What is the corporate tax rate in the UAE?
The UAE corporate tax rate is 9%, but it applies only to taxable income above AED 375,000. The first AED 375,000 is always taxed at 0% (UAE Government Portal, 2026). So this is a banded rate, not a flat one. A business with AED 400,000 of taxable profit pays 9% on AED 25,000, not on the whole amount.
Why does that distinction matter so much? Because it changes the real liability for almost every small and mid-sized business. Calling it a "9% flat tax" overstates what most companies owe. The 0% band protects start-ups and smaller operators, while the headline 9% only ever bites on profit above the threshold. Read the rate as two layers stacked together, not one number.
It is also a tax on profit, not revenue. Taxable income is calculated from accounting profit, then adjusted under the law. Turnover alone does not create a liability; profit does. That is a key contrast with VAT, which the UAE charges separately at 5% on most goods and services. Corporate tax and VAT are two different systems, and a business can owe one without the other.
Citation capsule: The UAE corporate tax rate is 9%, but it is banded: taxable income up to AED 375,000 is taxed at 0%, and only profit above AED 375,000 is taxed at 9%, for financial years beginning on or after 1 June 2023 (UAE Government Portal, 2026). It is a tax on business profit, not on turnover or personal income.
Do you pay tax in Dubai?
As an employee or private investor in Dubai, you pay no income tax. The UAE charges 0% personal income tax, so salaries, personal investment income such as dividends or capital gains held personally, and personal real-estate income all sit outside the tax (UAE Government Portal, 2026). That answer holds for most residents.
There is one important distinction, though. The 0% on personal income does not make the UAE a place with no business tax. If you run a business as a sole proprietor or freelancer and your turnover passes AED 1,000,000 in a Gregorian year, you fall within corporate tax on those business profits (Federal Tax Authority, 2023). That is corporate tax on business income, not a personal income tax.
So the clean version is this. Your salary: 0%. Your personal share portfolio: 0%. A flat you rent out in your own name: 0%. A trading business you run that clears AED 1m in turnover: in scope for 9% above the AED 375,000 band. Keeping personal income and business profit separate is the whole game here, and it is where most confusion starts.
The UAE also charges VAT at 5% and certain excise taxes, which residents and businesses pay on spending. Those are consumption taxes, not income taxes. So "no income tax" is accurate for individuals, while businesses still navigate corporate tax and VAT depending on what they do and what they sell.
Citation capsule: In Dubai, individuals pay 0% personal income tax on salary, personal investment income and personal real-estate income (UAE Government Portal, 2026). However, a natural person running a business with turnover above AED 1,000,000 in a Gregorian year is subject to corporate tax on those business profits under Cabinet Decision 49 of 2023 (Federal Tax Authority, 2023).
Who has to pay corporate tax in the UAE?
UAE corporate tax applies to businesses, not to individuals as such. In scope are UAE juridical persons, meaning incorporated companies on the mainland and in free zones; foreign entities that have a permanent establishment in the UAE; and natural persons conducting a business above AED 1,000,000 in turnover per Gregorian year (UAE Government Portal, 2026; Federal Tax Authority, 2023).
Businesses and individuals that are in scope
Three groups fall inside corporate tax. First, UAE companies, on the mainland and in free zones alike. A free zone company is a taxable person; its rate just depends on whether it qualifies for the free zone 0% regime, covered below. Second, foreign companies that operate through a permanent establishment in the UAE, broadly a fixed place of business or a dependent agent. Third, individuals running a business or commercial activity above the AED 1m turnover line.
Income and persons that are not in scope
Several things stay outside the tax entirely. Employment income is not in scope, so a salaried employee owes nothing. Personal investment income, held in a private capacity, is outside it. Personal real-estate income, where you let property in your own name rather than as a licensed business, is outside it too (UAE Government Portal, 2026). These are the carve-outs that keep personal wealth untaxed even though businesses now pay.
Exempt persons
A separate category, exempt persons, sits outside the charge by status rather than by income type. It includes government and government-controlled entities, businesses engaged in the extraction of natural resources (taxed at Emirate level instead), qualifying public-benefit entities, and qualifying investment funds and pension funds (UAE Government Portal, 2026). Some exemptions are automatic; others need approval from the authorities. The detail belongs in a dedicated guide, but the headline is that exemption is the exception, not the rule.
Citation capsule: UAE corporate tax applies to juridical persons on the mainland and in free zones, to foreign entities with a UAE permanent establishment, and to natural persons running a business above AED 1,000,000 turnover per Gregorian year (UAE Government Portal, 2026; Federal Tax Authority, 2023). Salary, personal investment and personal real-estate income are not in scope, and exempt persons sit outside the charge.
For the detail on how free zone companies keep a 0% rate, when registration is mandatory, and which small businesses can elect relief, see the dedicated spokes linked through the next sections. To map your own entity to the right structure first, our guide to Dubai company formation across mainland, free zone and offshore sets out the options.
Are free zone companies tax free in the UAE?
No, free zone companies are not automatically tax free. A free zone company is a taxable person, and the 0% rate applies only to a Qualifying Free Zone Person on its Qualifying Income; income that does not qualify is taxed at 9% (UAE Ministry of Finance, 2023). So the free zone 0% is conditional, not a blanket exemption.
To keep the 0% rate, a company must meet the conditions for a Qualifying Free Zone Person, including earning Qualifying Income and staying within a de-minimis limit on non-qualifying revenue. That limit is the lower of 5% of total revenue or AED 5 million (UAE Ministry of Finance, 2023). Cross that line and the company loses the regime, with 9% applying. The qualifying and excluded activities are set out in Ministerial Decision 229 of 2025, which replaced the earlier 2023 list.
Here is the practical takeaway. A free zone licence does not, by itself, deliver 0%. The company has to do qualifying activities, keep adequate substance, and watch its non-qualifying revenue against the de-minimis test. Getting this wrong can push the entire profit to 9%. The mechanics matter enough that we give them their own guide: see our spoke on the UAE free zone corporate tax and the Qualifying Free Zone Person rules.
Citation capsule: Free zone companies in the UAE are not automatically tax free. A free zone company is a taxable person, and the 0% rate applies only to a Qualifying Free Zone Person on its Qualifying Income, with non-qualifying revenue capped at the lower of 5% of total revenue or AED 5 million; above that the 9% rate applies (UAE Ministry of Finance, 2023).
What changed in 2025, and what is the Domestic Minimum Top-up Tax?
From 1 January 2025, the UAE introduced a Domestic Minimum Top-up Tax of 15% for very large multinational groups. It applies to groups with consolidated revenue of EUR 750 million or more in at least two of the four preceding financial years (UAE Ministry of Finance, 2026; EY, 2025). It sits above the 9% regime and affects only the largest players.
Keep two dates apart. The 9% corporate tax started for financial years beginning on or after 1 June 2023. The DMTT is a separate, later measure, effective for financial years starting on or after 1 January 2025 under Cabinet Decision 142 of 2024, released on 11 February 2025 (EY, 2025). They are not the same thing, and most businesses are touched only by the 9% regime.
What is the DMTT actually for? It aligns the UAE with the OECD's global minimum tax framework, often called Pillar Two or GloBE. The idea is that very large multinational groups pay an effective rate of at least 15% in each country where they operate. If a UAE entity in such a group would otherwise sit below 15%, the DMTT tops it up to that floor. For a UK or European group with UAE operations, this is the rule to check; for a single owner-managed company, it almost never applies.
Citation capsule: The UAE Domestic Minimum Top-up Tax is a 15% minimum effective rate for multinational groups with consolidated revenue of EUR 750 million or more, effective for financial years starting on or after 1 January 2025 under Cabinet Decision 142 of 2024 (UAE Ministry of Finance, 2026; EY, 2025). It sits above, and is distinct from, the 9% corporate tax that began for financial years from 1 June 2023.
Do you still have to register, and what about small business relief?
Yes, every taxable person must register, even at a 0% rate. Registration with the Federal Tax Authority through EmaraTax and obtaining a Tax Registration Number is mandatory regardless of the rate that applies, and late registration carries a penalty of AED 10,000 (KPMG, 2026). A 0% rate does not remove the obligation to register and file.
Registration is separate from the rate
This trips up a lot of owners. The rate you pay and the duty to register are two different things. A free zone company on 0%, a small business that elects relief, a start-up below the threshold: all still register, obtain a TRN, and file a return. Returns are filed and tax paid within nine months of the financial-year end, so a year ending 31 December 2025 has a deadline of 30 September 2026 (Federal Tax Authority, 2026). Miss the registration step and the penalty applies even when the tax due is zero. The mechanics live in our spoke on UAE corporate tax registration and EmaraTax.
Small Business Relief and its sunset
Small Business Relief lets a resident business with revenue at or below AED 3,000,000, in the current and all prior periods, elect to be treated as having no taxable income (Reed Smith, 2023). It eases the burden on smaller operators. Importantly, it is currently available for tax periods ending on or before 31 December 2026 unless extended, so it is time-limited and worth confirming before you rely on it. Our spoke on UAE Small Business Relief and the AED 3 million threshold covers the election and its conditions.
Citation capsule: Every taxable person in the UAE must register for corporate tax with the Federal Tax Authority and obtain a Tax Registration Number even at a 0% rate, with a late-registration penalty of AED 10,000 (KPMG, 2026). Small Business Relief lets residents with revenue at or below AED 3,000,000 elect no taxable income, currently for periods ending on or before 31 December 2026 unless extended (Reed Smith, 2023).
How does the UAE 9% compare with the UK and Europe?
Even at 9%, the UAE rate sits well below the UK and major European economies. For the financial year from April 2026 the UK main corporate tax rate is 25%, with a 19% small-profits rate; France charges 25% and Germany sits at roughly 30% on a combined basis (PwC Worldwide Tax Summaries, 2026). The UAE 9% is materially lower, though not zero.
This is where a common label needs correcting. The UAE is not a zero-corporate-tax country; it runs a 9% regime with a 0% band on the first AED 375,000. So it no longer belongs in the same bucket as jurisdictions that levy no corporate tax at all. For a worldwide list of genuinely zero-rate jurisdictions, and how the UAE differs, see our explainer on zero corporate tax countries.
The comparison above is a teaser, not the full picture. Effective tax burden depends on the base, on reliefs, on free zone status and on the DMTT for large groups, so a headline-rate table only takes you so far. We work through the real comparison, including effective rates and what it means for a UK or European business relocating, in our spoke on UAE corporate tax versus the UK and EU.
Citation capsule: The UAE 9% corporate tax rate sits well below the UK main rate of 25%, France at 25% and Germany at around 30% combined (PwC Worldwide Tax Summaries, 2026). The UAE is not a zero-corporate-tax country; it runs a 9% regime with a 0% band on the first AED 375,000 of taxable income.
Rules change, and tax is a YMYL area where getting it right matters. The figures here are current as at June 2026; confirm your own position with the Federal Tax Authority or a qualified adviser before you act. If you need help registering, filing, or assessing whether your free zone company qualifies for the 0% rate, you can talk to Ancova's tax team about your structure and obligations before a deadline lands.
Frequently asked questions
What is the corporate tax rate in the UAE?
The UAE corporate tax rate is 9%, but it is banded. Taxable income up to AED 375,000 is taxed at 0%, and only profit above AED 375,000 is taxed at 9%, for financial years beginning on or after 1 June 2023 (UAE Government Portal, 2026). It is a tax on business profit, not on turnover or personal income.
Do you pay tax in Dubai?
As an employee or private investor, no. The UAE charges 0% personal income tax, so salary, personal investment income and personal real-estate income are untaxed (UAE Government Portal, 2026). But a natural person running a business with turnover above AED 1,000,000 a year pays corporate tax on those business profits.
Who has to pay corporate tax in the UAE?
UAE companies on the mainland and in free zones, foreign entities with a UAE permanent establishment, and individuals running a business above AED 1,000,000 turnover in a Gregorian year (Federal Tax Authority, 2023). Salary, personal investment and personal real-estate income stay outside the tax, and exempt persons sit outside the charge.
Are free zone companies tax free in the UAE?
Not automatically. A free zone company is a taxable person, and the 0% rate applies only to a Qualifying Free Zone Person on its Qualifying Income; non-qualifying income is taxed at 9% (UAE Ministry of Finance, 2023). The de-minimis cap on non-qualifying revenue is the lower of 5% of total revenue or AED 5 million.
When was corporate tax introduced in the UAE?
The legal basis is Federal Decree-Law No. 47 of 2022, issued in December 2022, and the tax took effect for financial years beginning on or after 1 June 2023 (Federal Tax Authority, 2026). A company on a calendar financial year first fell in scope from 1 January 2024.
Sources
- UAE Government Portal (u.ae), "Corporate tax (CT)," updated 30 March 2026, retrieved 13 June 2026, https://u.ae/en/information-and-services/finance-and-investment/taxation/corporate-tax
- Federal Tax Authority, "Legislation" (Federal Decree-Law No. 47 of 2022 and related decisions), retrieved 13 June 2026, https://tax.gov.ae/en/legislation.aspx
- Federal Tax Authority, "Cabinet Decision No. 49 of 2023" (natural persons in scope), retrieved 13 June 2026, https://tax.gov.ae/DataFolder/Files/Legislation/05-06-2023/3/Cabinet%20Decision%20No.%2049%20of%202023%20-%20for%20publishing.pdf
- UAE Ministry of Finance, "Cabinet Decision No. 100 of 2023 on Determining Qualifying Income for the Qualifying Free Zone Person," retrieved 13 June 2026, https://mof.gov.ae/wp-content/uploads/2023/11/Cabinet-Decision-No.-100-of-2023-on-Determining-Qualifying-Income-for-the-Qualifying-Free-Zone-Person.pdf
- UAE Ministry of Finance, "UAE Domestic Minimum Top-up Tax," retrieved 13 June 2026, https://mof.gov.ae/en/public-finance/tax/uae-domestic-minimum-top-up-tax/
- EY Global, "UAE issues domestic minimum top-up tax legislation," 2025, retrieved 13 June 2026, https://www.ey.com/en_gl/technical/tax-alerts/uae-issues-domestic-minimum-top-up-tax-legislation
- KPMG UAE, "Insights" (corporate tax registration and EmaraTax), retrieved 13 June 2026, https://kpmg.com/ae/en/home/insights.html
- Reed Smith, "UAE Ministry of Finance issues decision on Small Business Relief" (Ministerial Decision 73 of 2023), 2023, retrieved 13 June 2026, https://www.reedsmith.com/en/perspectives/2023/04/uae-ministry-of-finance-issues-decision-on-small-business-relief
- PwC Worldwide Tax Summaries, "Corporate income tax (CIT) rates," retrieved 13 June 2026, https://taxsummaries.pwc.com/quick-charts/corporate-income-tax-cit-rates
Written by
Amine Derag
Director of Strategy, Ancova Associates
Amine Derag is Director of Strategy at Ancova Associates, the Dubai advisory firm for company formation, residency, citizenship by investment, and cross-border tax structuring. He advises founders and private clients relocating to the UAE on how a UAE structure interacts with their home-country tax and reporting obligations.
Connect on LinkedInThis article is general information for educational purposes only and is not legal, tax, financial, or immigration advice. Investment thresholds, processing times, and program terms change — speak with a qualified Ancova adviser before acting.
