UAE corporate tax now applies at 0% up to AED 375,000 of taxable income and 9% above that, with special rules for qualifying free zone entities and large multinationals in 2025.
This playbook explains who must register, which rates and reliefs apply, key 2025 deadlines, and the compliance steps every new UAE business should plan for.
Why it matters
Corporate tax is a national framework designed to support competitiveness while aligning with global standards, so even startups should plan their structure, bookkeeping, and filings from day one.
Rates and reliefs are favorable for small businesses, but missing elections or deadlines can remove benefits and trigger penalties.
Who must register
Most UAE juridical persons (mainland or free zone) must register for corporate tax according to timeframes set by the Federal Tax Authority, based on license issuance dates or within three months of incorporation after March 1, 2024.
Natural persons conducting a business in the UAE must register if 2024 turnover exceeded AED 1,000,000, with a registration deadline of March 31, 2025 for that year.
Rates and thresholds
The standard regime applies 0% on taxable income up to AED 375,000 and 9% on amounts above that threshold.
Large multinational groups face a 15% minimum via top‑up mechanisms from 2025, aligning the UAE with the global Pillar Two framework.
Small business relief
Eligible resident businesses can elect Small Business Relief so that taxable income is treated as zero for a tax period when revenue does not exceed AED 3,000,000, available until December 31, 2026.
This relief is an election made in the return (not automatic) and may limit carry‑forward of tax losses and interest for periods where relief is claimed.
Free zone rules
Qualifying Free Zone Persons can benefit from 0% on qualifying income if they meet substance, audited accounts, activity, and other conditions set out in the latest ministerial decisions.
Income that is non‑qualifying (or if conditions are not met) is taxed under the standard corporate tax regime, so classification and substance planning are critical.
Key deadlines 2025
Juridical persons follow the FTA’s specified registration timeframes tied to their license month or within three months for new entities formed on or after March 1, 2024.
Natural persons with business turnover over AED 1,000,000 in 2024 must register by March 31, 2025, or face administrative penalties.
Compliance checklist
- Secure a corporate tax TRN in EmaraTax within the specified timeframe for your entity type and license month.
- Maintain robust accounts and financial statements to compute taxable income and support filings and any relief claims.
- Assess eligibility and, if applicable, elect Small Business Relief in your return for periods where revenue is within the AED 3,000,000 threshold.
- If in a free zone, test Qualifying Free Zone Person status, ensure adequate substance and audited accounts, and map income into qualifying versus non‑qualifying buckets.
- Prepare to meet filing and payment obligations on time to avoid penalties, even if your effective rate is 0% due to thresholds or reliefs.
Common pitfalls
- Assuming 0% applies automatically without considering elections, thresholds, or substance conditions.
- Misclassifying free zone income and losing 0% on qualifying income due to failing QFZP conditions.
- Missing registration windows tied to license dates (juridical persons) or the March 31, 2025 deadline for qualifying natural persons.
- Weak bookkeeping that undermines return accuracy, relief eligibility, and audit readiness.
