Company Liquidation Service in UAE
15/10/2026
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The standard UAE Corporate Tax rate is 9% on taxable income exceeding AED 375,000, while taxable income up to AED 375,000 is generally subject to a 0% rate. The United Arab Emirates introduced federal Corporate Tax for financial years beginning on or after 1 June 2023.
Understanding the Corporate Tax rate in the UAE is important for companies, entrepreneurs, startups and free zone businesses. The amount of tax payable depends on taxable income, the business's legal status, applicable deductions and whether any special tax treatment applies.
Young & Right helps businesses understand UAE Corporate Tax requirements, prepare financial records and manage tax compliance.
The UAE Corporate Tax system generally applies the following rates to taxable persons under the standard regime:
|
Taxable income |
Corporate Tax rate |
|
Up to AED 375,000 |
0% |
|
Above AED 375,000 |
9% on the portion exceeding AED 375,000 |
These rates apply to taxable income calculated under UAE Corporate Tax legislation, not automatically to total revenue or sales.
For example, a company may generate AED 1 million in revenue but have a much lower taxable income after accounting for allowable expenses and relevant tax adjustments.
The final tax liability depends on the company's financial results and the applicable rules.
Understanding the calculation can help businesses estimate their potential tax liability.
Suppose a company has AED 300,000 in taxable income.
The company may still have registration, filing and record-keeping obligations even when no Corporate Tax is payable.
Suppose a company has AED 500,000 in taxable income.
The calculation is:
AED 125,000 × 9% = AED 11,250.
Suppose a company has AED 1 million in taxable income under the standard regime.
These are simplified examples. The actual calculation may differ because of tax adjustments, reliefs, exemptions or other applicable rules.
UAE Corporate Tax is generally calculated on taxable income rather than gross revenue.
Revenue is the total amount earned from selling goods or providing services. Accounting profit is calculated using accounting rules, while taxable income is determined according to UAE Corporate Tax legislation.
Taxable income may differ from accounting profit because certain expenses, exempt income, deductions and other adjustments receive specific treatment under tax law.
For example, a business with AED 2 million in revenue and AED 400,000 in accounting profit should not automatically calculate its tax as 9% of AED 2 million. It must first determine its taxable income.
Maintaining accurate accounting records is therefore essential for calculating the correct Corporate Tax liability.
Corporate Tax applies to many businesses operating in the UAE, although the exact treatment depends on their legal structure, activities and circumstances.
UAE mainland companies, including many limited liability companies, generally fall within the Corporate Tax regime.
They should determine their taxable income, assess relevant deductions and reliefs, register where required and submit their tax returns within the applicable deadlines.
Free zone companies are also within the UAE Corporate Tax framework. However, a company that qualifies as a Qualifying Free Zone Person (QFZP) may benefit from a 0% Corporate Tax rate on qualifying income if it meets the statutory conditions.
Taxable income that does not qualify for the special treatment is generally subject to the 9% rate. The standard AED 375,000 threshold does not provide a separate 0% band for a QFZP's non-qualifying taxable income.
Free zone status alone does not automatically guarantee a 0% rate. Businesses must review their qualifying activities, income, substance and other applicable conditions.
Businesses with taxable income up to AED 375,000 generally benefit from the 0% rate under the standard regime.
Eligible businesses may also consider Small Business Relief, subject to the applicable revenue threshold, tax-period rules and other statutory conditions. This relief is not automatic for every small business, and an eligible business generally must make the required election.
Small businesses should check the applicable requirements before assuming that they qualify for relief.
Individuals are not automatically subject to Corporate Tax on all their personal income.
Under the applicable rules, a natural person conducting business or business activities in the UAE generally falls within the Corporate Tax regime when annual business turnover exceeds AED 1 million in a Gregorian calendar year, subject to the relevant conditions and exclusions.
Employment salary, personal investment income and qualifying real estate investment income are generally excluded from the relevant business-turnover calculation.
Certain entities and activities may qualify for exemption under the legislation. Depending on the category, exemption may be automatic or conditional on meeting requirements, obtaining approval or being listed in a relevant Cabinet Decision.
Categories can include certain government entities, specified government-controlled entities, qualifying public benefit entities and qualifying investment funds, subject to the applicable rules.
Some extractive and non-extractive natural resource businesses may also qualify for specific treatment where the statutory conditions are met.
An exemption should never be assumed simply because a business operates in a particular sector. Businesses should confirm their eligibility and any registration or filing requirements with reference to current Federal Tax Authority (FTA) guidance.
The UAE introduced its federal Corporate Tax framework through Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses.
The regime applies to financial years beginning on or after 1 June 2023.
For example, a company with a financial year beginning on 1 January 2024 generally falls within the regime for that financial year, subject to the applicable rules.
Businesses should identify their first relevant tax period and confirm the registration, filing and payment deadlines that apply to their circumstances.
The general deadline for filing a UAE Corporate Tax return and paying any tax due is within nine months after the end of the relevant tax period.
For example, a company whose tax period ends on 31 December 2025 would generally need to file its return and pay the tax due by 30 September 2026.
The actual deadline depends on the company's tax period and applicable requirements. Businesses should confirm their own deadline and prepare financial records in advance.
Missing filing or payment deadlines can lead to administrative penalties under the applicable rules.
Businesses that are required to register should complete the relevant registration process with the Federal Tax Authority through its EmaraTax platform.
The general steps include:
Registration deadlines vary according to the type of taxable person and the applicable FTA decisions. Businesses should confirm the deadline relevant to their legal status.
Young & Right can assist businesses with Corporate Tax registration and related compliance requirements.
Preparing appropriate financial records helps businesses calculate taxable income and support their tax returns.
Commonly required records may include:
The documents required depend on the business's activities and tax position. Businesses should retain records for the applicable statutory period.
Understanding the Corporate Tax rate is only one part of tax compliance. Businesses must also maintain financial records, calculate taxable income, monitor filing deadlines and understand whether special reliefs or exemptions apply.
Young & Right can support businesses with:
The support required will depend on the business's legal structure, financial position and applicable tax rules.
Explore Young & Right's Corporate Tax Services in the UAE or Corporate Tax Registration Services for further information.
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