UAE Corporate Tax Rates Explained
The 0% threshold, the 9% rate, and the reliefs that change what you actually pay.
By Shihabudeen Pattasseri, FTA-Registered Tax Agent (TAAN 20056925) · Updated 2026-11-03
UAE Corporate Tax is often described in one line — “9% above AED 375,000” — but the rate that actually applies to your business depends on your income, your structure and whether you qualify for relief. Here is how the rates work in practice.
The standard rates
- 0% on taxable income up to AED 375,000
- 9% on taxable income above AED 375,000
So a company with AED 500,000 of taxable income pays 9% on AED 125,000 — about AED 11,250 — and 0% on the first AED 375,000. The threshold applies per tax period.
The free zone rate
A Qualifying Free Zone Person (QFZP) pays 0% on qualifying income and 9% on non-qualifying income, provided it meets all the conditions, including adequate substance, qualifying activities and transfer pricing compliance. The 375,000 threshold does not create a separate band for a QFZP; it is the 0%/9% qualifying split that matters.
The global minimum tax
Large multinational groups with consolidated revenue of EUR 750 million or more fall under the OECD Pillar Two rules and a Domestic Minimum Top-up Tax, designed to bring their effective rate to 15%. This affects only the largest groups; most UAE businesses are on the 0%/9% system.
What changes your effective rate
- Small Business Relief, which can treat eligible businesses as having no taxable income
- Deductible versus non-deductible expenses
- Exempt income such as qualifying dividends
- Free zone qualifying income rules
The headline rate is simple; the effective rate is where planning pays. A short review before your tax period ends usually finds the reliefs you are entitled to.
Frequently asked questions
What is the UAE Corporate Tax rate?
0% on taxable income up to AED 375,000 and 9% above it. Qualifying Free Zone Persons pay 0% on qualifying income, and the largest multinationals face a 15% minimum under Pillar Two.
Is the AED 375,000 threshold per year?
Yes, it applies per tax period, which is normally your 12-month financial year.
Do free zone companies really pay 0%?
Only on qualifying income, and only if they meet all the Qualifying Free Zone Person conditions. Non-qualifying income is taxed at 9%.
Need help with this?
Safeway is an FTA-approved tax agent in Ajman serving businesses across the UAE. Talk to us for practical, compliant advice.
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