UAE Corporate Tax Basics for Small Business

What UAE Corporate Tax is

Corporate Tax is a federal tax on the profits of businesses in the UAE. It took effect for financial years starting on or after 1 June 2023, so it is a relatively new part of running a business here.

It is separate from VAT. VAT is charged on sales and passed to the FTA; Corporate Tax is charged on your profit at the end of the year. A business can be affected by both, one, or neither depending on its size and activity.

Who pays it

Corporate Tax applies broadly to businesses and commercial activities in the UAE, including mainland companies and, in many cases, free zone businesses (which have their own rules). Individuals earning salary or personal investment income are generally not caught, but a person running a business or trade under a licence usually is.

The key point for a small business owner: being small does not automatically mean you are outside the system. You may still need to register even if your profit means you pay 0%.

The 9% and 0% rates

The rate is 0% on taxable profit up to AED 375,000 and 9% on taxable profit above that. So a business with AED 400,000 of taxable profit pays nothing on the first AED 375,000 and 9% only on the AED 25,000 above the threshold.

Taxable profit is not the same as revenue. It is broadly your accounting profit with certain tax adjustments. This is why clean, accurate accounts matter — the tax is calculated on the profit figure, not on your sales.

• Taxable profit up to AED 375,000: 0%.
• Taxable profit above AED 375,000: 9% on the excess.
• Larger multinationals may face separate global-minimum-tax rules — that is beyond most small businesses.

Registering for Corporate Tax

Registration is done through the FTA's EmaraTax portal, the same system used for VAT. Once registered you receive a Corporate Tax registration number and a filing obligation.

The FTA has set registration deadlines, and missing them can lead to penalties, so it is worth checking your deadline early rather than assuming you have plenty of time. Even businesses expecting to pay 0% generally still need to register and file a return.

Small Business Relief

To ease the burden on smaller businesses, the UAE introduced Small Business Relief. Where it applies, an eligible business can elect to be treated as having no taxable income for the period, which simplifies its obligations.

Eligibility is based on a revenue threshold set by the Ministry of Finance and the relief applies for a limited window of tax periods. The exact figure and end date can change, so confirm the current threshold and whether you qualify on the FTA website before relying on it.

Records, deadlines and staying ready

You must keep accounting records and supporting documents so your taxable profit can be worked out and checked. In practice that means proper bookkeeping throughout the year, not a scramble at year-end.

The Corporate Tax return is filed after your financial year ends, within the window set by the FTA. Keeping your books current all year makes filing straightforward and reduces the risk of errors. Tallium keeps your accounts organised and helps prepare your Corporate Tax figures alongside your VAT, so year-end is calmer.

A note on tax advice

This is general information, not advice for your specific situation. Corporate Tax rules, thresholds and reliefs can change and depend on your business structure and free-zone status. Always confirm the current position with the FTA or a qualified tax adviser.