UAE Corporate Tax in 2026: What Business Owners Must Know

Who Pays Corporate Tax in the UAE

Every mainland and free zone company that meets the turnover threshold must register and file corporate tax returns. The tax applies to juridical persons, including LLCs, branches of foreign companies, and most free zone entities. Individuals who run sole establishments or partnerships may also fall under the regime if their turnover exceeds the limit.

The standard rate is 9 percent on taxable income above AED 375,000. Income up to AED 375,000 is taxed at 0 percent. This applies for financial years starting on or after 1 January 2024 and remains unchanged in 2026.

Free Zone Exemptions

Qualifying free zone persons can still enjoy 0 percent tax on qualifying income. To keep this status, the entity must maintain adequate substance in the UAE, comply with transfer pricing rules, and derive qualifying income from qualifying activities listed by the Ministry of Finance. Non-qualifying income, such as income from the mainland or from excluded activities, is taxed at 9 percent.

Businesses should review their activities annually. If more than 5 percent of total revenue comes from non-qualifying sources, the entire entity loses qualifying free zone person status for that year.

Registration Requirements

Any business with taxable turnover above AED 375,000 must register for corporate tax within three months of the end of its first financial year. Registration is done through the EmaraTax portal managed by the Federal Tax Authority. Companies that fail to register on time face penalties starting at AED 10,000.

Even businesses below the threshold should register voluntarily if they expect future growth. Voluntary registration allows them to claim input tax credits and simplifies future compliance.

Filing and Payment Deadlines

Corporate tax returns must be filed within nine months after the end of the financial year. Payment of any tax due is required at the same time. For most calendar-year companies, the deadline is 30 September 2026 for the 2025 financial year.

Companies must prepare audited financial statements if their revenue exceeds AED 50 million. Smaller entities may use management accounts but still need to keep records for seven years.

Common Compliance Mistakes

• Assuming free zone status automatically gives 0 percent tax without checking qualifying activity lists.
• Missing the registration deadline because the company thought it was below the AED 375,000 threshold.
• Not maintaining transfer pricing documentation for related-party transactions above AED 200 million.
• Forgetting that foreign branch income may be taxable unless a double tax treaty provides relief.

Practical Steps for 2026

Review your qualifying income breakdown before the new financial year. Update your transfer pricing policy and ensure your free zone entity meets the 2026 substance requirements published by the Ministry of Finance. Engage a UAE-licensed tax advisor to prepare the first or revised corporate tax return.

Ask Tovi for more

Tovi knows current 2026 UAE rules, fees, and processes. Ask anything, visas, banking, housing, schools. Ask Tovi free →

Got more UAE questions?

Tovi knows current 2026 UAE rules, fees, and processes. Ask anything — visas, banking, housing, schools. Ask Tovi free →