UAE Corporate Tax Services
Understand what your business actually owes — and why. BizCafe supports Corporate Tax registration, assessment, accounting, return preparation and compliance for mainland, free zone, offshore and individual business structures.
How UAE Corporate Tax Works
UAE Corporate Tax is a federal direct tax on taxable business income. For ordinary taxable persons, the current rate is 0% on taxable income up to and including AED 375,000 and 9% on taxable income above AED 375,000.
Taxable Income — Not Turnover
Turnover is business revenue. Taxable income is determined from accounting income after applying the adjustments required by the Corporate Tax Law. The distinction is essential when estimating actual tax exposure.
Registration & Tax Return
Taxable persons must meet the applicable FTA registration requirements, maintain appropriate records and file Corporate Tax returns for their tax periods within the statutory deadlines.
Accounting Matters
Reliable bookkeeping and financial records form the starting point for determining taxable income, deductions, adjustments, tax losses and the final Corporate Tax liability.
Corporate Tax vs VAT
A company can have Corporate Tax obligations, VAT obligations, both, or different registration positions under each regime. They are separate taxes with different rules.
Corporate Tax
Direct tax on taxable business income. Under the ordinary regime, the first AED 375,000 of taxable income is subject to 0%, with 9% applying above that threshold. Corporate Tax is concerned with the profitability/taxable income of the business, subject to the law's adjustments and exemptions.
VAT
Indirect tax on taxable supplies. UAE VAT is generally charged at 5% on taxable supplies, subject to zero-rated and exempt treatments. A VAT-registered business collects and accounts for VAT according to the VAT rules; VAT is not a tax on the company's profit.
How Corporate Tax Applies Across UAE Business Types
The tax position should be assessed from the legal person, activity, income and facts — not simply from the words “mainland”, “free zone” or “offshore”.
Mainland Companies
UAE mainland companies are generally within the Corporate Tax regime and must comply with applicable registration, record-keeping, return and payment obligations. The ordinary 0% / 9% taxable-income bands apply unless another specific provision changes the treatment.
Ordinary CT regimeFree Zone Companies
A free zone licence does not automatically mean 0% Corporate Tax. A Qualifying Free Zone Person may benefit from 0% on Qualifying Income, while taxable income that is not Qualifying Income is subject to 9%, subject to the statutory conditions.
0% is conditionalOffshore Structures
“Offshore” should not be treated as a blanket tax exemption. Corporate Tax treatment depends on the entity's legal and tax-residence position, UAE presence or nexus, source of income and the particular facts of the structure.
Case-by-case reviewFreelancers & Individuals
A natural person conducting UAE business becomes subject to Corporate Tax when total turnover from their UAE business or business activities exceeds AED 1 million in a calendar year. Wages, personal investment income and real-estate investment income are excluded from this business test.
AED 1M turnover testFree Zone Does Not Automatically Mean “Tax Free”
This is one of the most important Corporate Tax issues for UAE entrepreneurs. Preferential treatment depends on qualifying as a Qualifying Free Zone Person and satisfying the relevant income and compliance conditions.
Qualifying Free Zone Person
FTA guidance requires, among other conditions, adequate substance in the UAE, Qualifying Income, compliance with transfer-pricing rules and relevant documentation, and no election to become fully subject to the ordinary Corporate Tax regime.
0% on Qualifying Income
Where the statutory requirements are satisfied, a Qualifying Free Zone Person can benefit from a 0% Corporate Tax rate on Qualifying Income.
9% on Non-Qualifying Taxable Income
Taxable income that does not meet the Qualifying Income definition is subject to 9% under the Free Zone Corporate Tax regime. Activities and transactions therefore need to be reviewed rather than assuming a blanket 0% rate.
Conditions to Keep the 0% Corporate Tax Benefit
A Free Zone company does not qualify for 0% merely because of its licence location. The entity must continue to satisfy the specific Qualifying Free Zone Person conditions for the relevant Tax Period.
Adequate Substance
The business must maintain adequate substance in a Free Zone, including sufficient core income-generating activity, assets, employees and operating expenditure appropriate to the activity.
Qualifying Income
The Free Zone Person must derive income that falls within the Corporate Tax definition of Qualifying Income. The nature of the customer, transaction and activity matters.
Transfer Pricing
The entity must comply with the arm's-length principle for related-party transactions and maintain the transfer-pricing documentation required under the Corporate Tax rules.
Audited Financial Statements
Qualifying Free Zone Persons are required to maintain audited financial statements in accordance with the applicable Corporate Tax requirements.
De Minimis Requirement
Non-qualifying Revenue must stay within the permitted de minimis limit: the lower of AED 5 million or 5% of total Revenue, subject to the rules for what is included or excluded from the calculation.
No Election for Standard CT
The Free Zone Person must not elect to be subject to the ordinary Corporate Tax regime if it wants to continue using the Qualifying Free Zone Person treatment.
Not Every Free Zone Transaction Receives 0%
The 0% rate is tied to Qualifying Income. That can include specified transactions with other Free Zone Persons, income from Qualifying Activities and certain qualifying intellectual-property income, subject to the detailed statutory conditions and exclusions.
Transactions With Free Zone Persons
Certain income from transactions with another Free Zone Person can be Qualifying Income where the recipient conditions are met and the transaction is not connected with an Excluded Activity or other excluded property/income treatment.
Qualifying Activities
Income from activities specifically recognised as Qualifying Activities can fall within the 0% regime where the other QFZP conditions are satisfied.
Excluded Activities
Income from Excluded Activities does not automatically benefit from the 0% rate. The activity and transaction must be reviewed against the current Corporate Tax decisions and guidance.
Qualifying Intellectual Property
Certain income from qualifying intellectual property developed by the Free Zone Person may qualify under the specific nexus-based rules and documentation requirements.
Permanent Establishments
Profits attributable to a UAE Domestic Permanent Establishment outside the Free Zone, or a Foreign Permanent Establishment, are generally subject to 9% rather than the 0% Free Zone rate.
De Minimis Protection
Limited non-qualifying Revenue can be tolerated without losing QFZP status where the de minimis threshold is not exceeded, but the underlying non-qualifying income remains subject to the applicable 9% treatment.
Free Zone vs Designated Zone
A Designated Zone is especially important under the UAE VAT rules and should not be confused with Qualifying Free Zone Person status for Corporate Tax. A business operating in a Free Zone or Designated Zone must still satisfy the separate Corporate Tax conditions to obtain the 0% rate on Qualifying Income.
Corporate Tax and VAT use different testsDesignated Zones Will Be Covered Under VAT
Our VAT Services page will separately explain the VAT treatment of Designated Zones, including relevant rules for goods, movement between zones, mainland transactions and other VAT consequences. Keeping the concepts separate avoids the misconception that Designated Zone status itself creates a 0% Corporate Tax entitlement.
Detailed VAT treatment belongs on the VAT pageThe AED 1 Million Rule Is About Business Turnover
The Corporate Tax rules for a natural person are different from those for a company. A freelancer, sole establishment owner or other individual conducting business should first determine whether the natural-person business threshold is crossed.
AED 1 Million Threshold
If total turnover from UAE business or business activities exceeds AED 1 million during the calendar year, the natural person comes within the Corporate Tax framework and must meet the applicable registration and compliance obligations.
Salary Is Excluded
Wages are not treated as a Business or Business Activity for this natural-person Corporate Tax test. An employee's salary therefore does not simply become Corporate Taxable Income because it exceeds AED 1 million.
Personal Investment Income
Personal investment income and real-estate investment income are also excluded from the natural-person business/activity test when they fall within the relevant definitions.
How Competitive Is the UAE's 9% Rate?
The UAE's ordinary 9% statutory rate sits well below the international average reported by the OECD, reinforcing the country's position as a competitive jurisdiction while maintaining a formal corporate-tax framework.
UAE Ordinary Corporate Tax Rate
Applied to the portion of ordinary taxable income exceeding AED 375,000. The first AED 375,000 is currently subject to 0%.
2026 International Average
The OECD's Corporate Tax Statistics 2026 reports an average statutory corporate income tax rate of approximately 21.2% across the Inclusive Framework jurisdictions covered.
From Registration to Tax Return
Tax Position Review
Identify the taxable person, structure, tax period and applicable regime.
FTA Registration
Support Corporate Tax registration and tax-registration requirements.
Accounting Review
Prepare or review financial records and identify required tax adjustments.
Tax Calculation
Determine taxable income, applicable reliefs and Corporate Tax exposure.
Return & Compliance
Prepare filing, payment support and ongoing Corporate Tax compliance.
Corporate Tax Areas Businesses Should Review
Deductible Expenses
Not every accounting expense is necessarily deductible in the same way for Corporate Tax. Business purpose, statutory limitations and supporting records matter.
Related Parties & Transfer Pricing
Transactions with related parties and connected persons can require arm's-length analysis and, where applicable, transfer-pricing documentation.
Tax Losses & Reliefs
Available tax losses and relief provisions can affect the final tax position, subject to the requirements and restrictions of the Corporate Tax Law.
Small Business Relief
Where the current statutory conditions are met, eligible resident persons may need to assess whether Small Business Relief is available for the relevant tax period.
Groups & Restructuring
Group structures, transfers, reorganisations and ownership changes can create tax consequences or potential relief opportunities that should be reviewed before implementation.
International Transactions
Cross-border income, permanent establishments, tax residence and treaty considerations can require analysis beyond the basic 0% / 9% headline rates.
UAE Corporate Tax FAQs
Is UAE Corporate Tax 9% on all company revenue?
No. Corporate Tax is based on taxable income, not simply gross turnover. Under the ordinary regime, taxable income up to AED 375,000 is subject to 0%, while the portion above AED 375,000 is subject to 9%.
Does every free zone company pay 0% Corporate Tax?
No. A free zone company must meet the conditions to be a Qualifying Free Zone Person. The 0% rate applies to Qualifying Income, while taxable income that does not meet the Qualifying Income definition is subject to 9%.
Is Corporate Tax the same as VAT?
No. Corporate Tax is a direct tax on taxable business income. VAT is an indirect tax generally charged at 5% on taxable supplies, subject to the VAT law's zero-rated, exempt and other rules.
Do freelancers have to register for Corporate Tax?
A natural person conducting a UAE Business or Business Activity is subject to Corporate Tax when total business turnover exceeds AED 1 million in a calendar year. Wages, personal investment income and qualifying real-estate investment income are excluded from this business test.
Are offshore companies automatically exempt from UAE Corporate Tax?
No blanket assumption should be made from the word “offshore”. The entity's incorporation, tax residence, UAE nexus or permanent establishment, income source and other facts must be assessed under the Corporate Tax rules.
Why is bookkeeping important for Corporate Tax?
Corporate Tax starts from financial/accounting information and then applies the adjustments required by tax law. Incomplete records can therefore affect both the accuracy of the return and the business's ability to support deductions and tax positions.
Can BizCafe handle both Corporate Tax and VAT?
Yes. BizCafe can support businesses with Corporate Tax and VAT compliance as separate tax regimes, including registration, accounting coordination, return preparation and ongoing compliance support according to the client's requirements.
Do Not Guess Whether 0%, 9% or a Special Rule Applies
Share your business structure, licence and activity with BizCafe. We can review whether you are mainland, free zone, offshore or operating as an individual and identify the Corporate Tax compliance route that applies.