The Corporate Tax in UAE has become one of the most important compliance requirements for businesses operating in the country. Whether you run a mainland company, free zone entity, or a small consultancy, understanding UAE corporate tax rates, Small Business Relief (SBR), eligibility criteria, and filing requirements is essential.
In this detailed guide, we explain everything you need to know about:
UAE Corporate Tax structure
Small Business Relief (SBR)
Who is eligible
Revenue thresholds
Full corporate tax filing requirements
Registration and deadlines
What is Corporate Tax in UAE?
Corporate Tax is a federal tax imposed on the net profit of businesses operating in the UAE under the Federal Corporate Tax Law.
The tax is administered by the Federal Tax Authority (FTA) and applies to financial years starting on or after 1 June 2023.
UAE Corporate Tax Rate
The UAE corporate tax structure is:
0% on taxable income up to AED 375,000
9% on taxable income above AED 375,000
This makes UAE one of the most competitive tax environments globally.
Who is Subject to UAE Corporate Tax?
Corporate Tax applies to:
1. UAE Resident Companies
Mainland companies
Free zone companies
Civil companies
LLCs
Sole establishments (if conducting business activities)
2. Natural Persons (Individuals)
If an individual conducts business in UAE and their annual business revenue exceeds AED 1 million, they must register for corporate tax.
3. Foreign Companies
If they have:
A permanent establishment (branch) in UAE
UAE-sourced income
Small Business Relief (SBR) in UAE
One of the biggest advantages for startups and SMEs is Small Business Relief (SBR) under Article 21 of the Corporate Tax Law.
This relief is designed to reduce compliance burden and support small businesses.
What is Small Business Relief?
If eligible and elected, the business will be:
Treated as having no taxable income
Not required to calculate taxable profit
Not required to pay corporate tax
Allowed to file a simplified corporate tax return
However, registration is still mandatory.
Small Business Relief Eligibility Criteria (2023–2026)
1. Must Be a UAE Resident Person
Includes:
UAE incorporated companies
Individuals conducting business in UAE
2. Revenue Must Not Exceed AED 3 Million
The business must have:
Revenue of AED 3,000,000 or less
In the current tax period AND
In all previous tax periods
⚠️ Important:
If revenue exceeds AED 3 million even once, the business cannot claim SBR in future years.
3. Applicable Period
Small Business Relief applies to tax periods:
Starting on or after 1 June 2023
Ending on or before 31 December 2026
Who is NOT Eligible for Small Business Relief?
You cannot claim SBR if you are:
A Qualifying Free Zone Person enjoying 0% tax regime
A member of a large multinational group (consolidated revenue above AED 3.15 billion)
A non-resident person
Corporate Tax Filing in UAE – Full Filing vs SBR
Understanding the difference between full filing and Small Business Relief filing is critical.
1. Full Corporate Tax Filing (Standard Regime)
If your revenue exceeds AED 3 million OR you choose not to elect SBR:
You must:
Register with the FTA
Maintain proper accounting records
Prepare financial statements
Compute taxable income
Apply deductions and exemptions
File corporate tax return
Pay tax within 9 months from the end of financial year
Example:
If your financial year ends 31 December 2025,
Your corporate tax return is due by 30 September 2026.
2. Filing Under Small Business Relief (Simplified)
If eligible and electing SBR:
You must:
Register for corporate tax
Elect Small Business Relief in your return
Submit simplified tax return
You do NOT:
Calculate taxable income
Pay corporate tax
However:
You cannot carry forward losses for that period
You must maintain basic accounting records
Corporate Tax Registration in UAE
All taxable persons must register through the Federal Tax Authority portal.
Even if:
You made no profit
You qualify for Small Business Relief
Failure to register may result in administrative penalties.
Key Deadlines for Corporate Tax in UAE
Registration: As per FTA timeline
Filing deadline: Within 9 months after end of financial year
Payment deadline: Same as filing deadline
Practical Example
Example 1 – Small Consultancy Firm
Annual Revenue: AED 2.4 million
Net Profit: AED 400,000
Since revenue is below AED 3 million → Eligible for SBR
Result: No corporate tax payable (if SBR elected)
Example 2 – Trading Company
Annual Revenue: AED 5 million
Taxable Profit: AED 800,000
Tax Calculation:
0% on first AED 375,000
9% on remaining AED 425,000
Corporate Tax = AED 38,250
Why Small Businesses Should Plan Early
Even if you qualify for Small Business Relief, you should:
Maintain proper bookkeeping
Monitor revenue carefully
Prepare for transition once revenue exceeds AED 3 million
Plan tax strategy in advance
Professional tax planning ensures:
Compliance
Cash flow efficiency
Avoidance of penalties
Proper documentation