Someone who registers a company in Dubai or another emirate may assume the UAE has no taxes at all. That is no longer true. Since 2023 the UAE has had a "tax on corporations and businesses", and every company must register for it, even if it pays no tax. This article is based on the official pages of the UAE Ministry of Finance, the Federal Tax Authority and the UAE Government portal (`u.ae`), checked on 24 October 2026.
Legal basis and start date
The governing law is "Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses". The UAE Government portal says it was issued on 9 December 2022 and applies to financial years beginning on or after 1 June 2023. So for a company with a calendar financial year, the first tax period was 2024.
Rates
| Part | Rate | Source |
|---|---|---|
| Taxable income up to AED 375,000 | 0% | UAE Government portal |
| Taxable income above AED 375,000 | 9% | UAE Government portal |
| Qualifying income of a "Qualifying Free Zone Person" | 0% | UAE Ministry of Finance |
| Large multinational groups | Domestic Minimum Top-up Tax | UAE Ministry of Finance |
On the last row: the Ministry of Finance says the "Domestic Minimum Top-up Tax" applies to financial years starting on or after 1 January 2025, and only to multinational groups whose annual global revenue was EUR 750 million or more in at least two of the four preceding financial years. It does not concern small and medium-sized companies.
Who is taxed?
The UAE Government portal describes the taxable persons as "all businesses and individuals conducting business activities under a commercial licence in the UAE". Foreign companies and individuals are covered only if they carry on a trade or business in the UAE in an ongoing or regular manner.
Individuals
Under "Cabinet Decision No. 49 of 2023", an individual is subject to corporate tax only when the turnover of their business in the UAE exceeds AED 1,000,000 in a calendar year. Three kinds of income do not count:
- wages and salary;
- personal investment income;
- real estate investment income that needs no licence.
The Federal Tax Authority's guide defines "real estate investment" as an activity that is not conducted, and does not need to be conducted, through a licence. So a real estate activity that needs a licence does not fall within this exclusion.
Exemptions
The Ministry of Finance treats these groups as exempt: government entities and some government-controlled entities (automatically), extractive and non-extractive natural resource businesses, pension and social security funds, and qualifying investment funds. Some of these exemptions require notifying the Ministry or approval by the Federal Tax Authority.
Small business relief
"Small Business Relief" is for resident companies with annual revenue of up to AED 3 million. The Ministry of Finance announced "Ministerial Decision No. 73 of 2023" on 6 April 2023, and on 7 August 2026 it said that "Ministerial Decision No. 131" had extended the relief to tax periods ending on or before 31 December 2029; before that it ended on 31 December 2026.
| Topic | What the Ministry of Finance has said |
|---|---|
| Revenue cap | Up to AED 3 million in each tax period |
| Period | From tax periods starting on 1 June 2023 to tax periods ending on or before 31 December 2029 |
| Effect | The taxable person is treated as having no taxable income in that period |
| Election | The relief is not automatic; it must be elected |
| Not eligible | "Qualifying Free Zone Persons" and members of multinational groups with consolidated revenue above AED 3.15 billion |
| Losses | According to the Ministry, a business that does not elect the relief can carry its tax losses forward to later periods |
The last point matters: in a year when the company makes a loss, electing the relief may not be in your interest. Weigh this with your accountant.
Registration, return and penalty
| Topic | What the Federal Tax Authority has said |
|---|---|
| Registration fee | Free of charge |
| Processing time | 20 business days after the complete application is received |
| Main documents | Certificate of incorporation or memorandum of association, a valid trade licence, the Emirates ID and passport of owners above 25% and of the signatories, proof of the signatory's authority |
| Late registration penalty | AED 10,000 |
| Penalty waiver | If the first return is filed within 7 months of the end of the first tax period |
| Return and payment deadline | Within 9 months of the end of each tax period, according to the Ministry of Finance |
The registration deadline of each group of taxable persons is set in "Federal Tax Authority Decision No. 3 of 2024". The Federal Tax Authority says its services are only available through a UAE Pass account.
The end of "economic substance" reports
On 14 October 2024 the UAE Ministry of Finance announced that, under "Cabinet Decision No. 98 of 2024", economic substance notifications and reports are no longer required for financial years ending after 31 December 2022. The same announcement says companies remain responsible for the obligations of earlier years, for answering requests from regulators and the Federal Tax Authority, and for paying penalties already imposed.
Three worked examples
These examples are hypothetical and only show how the calculation works.
**Example 1: a trading company on the Dubai mainland.** Annual taxable income is AED 1,000,000 and total revenue is AED 5 million, so small business relief does not apply.
| Part of income | Rate | Tax |
|---|---|---|
| First AED 375,000 | 0% | Zero |
| Remaining AED 625,000 | 9% | AED 56,250 |
| Total | AED 56,250 |
**Example 2: a small service company.** Total revenue is AED 2.5 million and taxable income AED 400,000. Without the relief, the tax is 9% of the AED 25,000 excess, i.e. AED 2,250. If the company elects small business relief and meets the conditions, its taxable income is treated as zero.
**Example 3: an individual.** A person in Dubai earns a salary and rents out a personally owned flat without needing a licence. Neither income counts toward the AED 1 million threshold, and they are not subject to corporate tax on them. But if the same person works under a freelance licence and its turnover exceeds AED 1,000,000 in a year, they must register.
Practical points
- Even a company with taxable income below AED 375,000 must register; the 0% rate means no tax, not no registration.
- A free zone company reaches the 0% rate only on "qualifying income" and only if it meets the conditions; mainland activity can change that.
- If you are also tax resident in another country, your income may be taxable there too. For the UAE tax residency certificate, see our separate article.
- Keep accounting records from day one; claiming any relief needs evidence.
Royal Golden does not give tax advice. This article is general information and not tax or legal advice.
Sources
- UAE Government portal, corporate tax — https://u.ae/en/information-and-services/finance-and-investment/taxation/corporate-tax (checked on 24 October 2026)
- UAE Ministry of Finance, corporate tax in the UAE — https://mof.gov.ae/en/public-finance/tax/corporate-tax-in-the-uae/ (checked on 24 October 2026)
- UAE Ministry of Finance, extension of small business relief until 31 December 2029 (7 August 2026) — https://mof.gov.ae/en/news/ministry-of-finance-announces-extension-of-small-business-relief-for-corporate-tax-purposes-until-31-december-2029/ (checked on 24 October 2026)
- UAE Ministry of Finance, decision on small business relief (6 April 2023) — https://mof.gov.ae/en/news/ministry-of-finance-issues-decision-on-small-business-relief-for-corporate-tax-purposes/ (checked on 24 October 2026)
- UAE Ministry of Finance, Domestic Minimum Top-up Tax — https://mof.gov.ae/uae-domestic-minimum-top-up-tax/ (checked on 24 October 2026)
- UAE Federal Tax Authority, corporate tax registration — https://tax.gov.ae/en/services/corporate.tax.registration.aspx (checked on 24 October 2026)
- UAE Federal Tax Authority, real estate investment for natural persons guide (22 October 2024) — https://tax.gov.ae/Datafolder/Files/Pdf/2024/Real-Estate-Investment-for-natural-persons-22-10-2024.pdf (via the search index; checked on 24 October 2026)
- UAE Ministry of Finance, Cabinet Decision No. 49 of 2023 — https://mof.gov.ae/wp-content/uploads/2023/05/Cabinet-Decision-No.-49-of-2023.pdf (via the search index; checked on 24 October 2026)
- UAE Ministry of Finance, amendment of the Cabinet Decision on economic substance requirements (14 October 2024) — https://mof.gov.ae/en/news/ministry-of-finance-announces-amendment-to-cabinet-decision-on-economic-substance-requirements/ (checked on 24 October 2026)