9%
Standard CT rate above AED 375k
0%
Rate for qualifying free zone income
Jun 2023
Effective for FY starting on/after
AED 375k
Small business relief threshold
UAE Corporate Tax (CT) — introduced by Federal Decree-Law No. 47 of 2022 — is the most significant tax development in the UAE in decades. For businesses operating in or through the UAE, understanding the scope of the law, qualifying exemptions, the free zone regime, and ongoing compliance obligations is now a baseline requirement. Lexara indexes the full CT Law alongside FTA ministerial decisions, public clarifications, and corporate tax guides — making the entire corpus searchable with keyword search and AI Explorer for plain-language questions.
UAE Corporate Tax applies broadly. Understanding whether an entity is a taxable person — and at what rate — is the first compliance question every UAE business must answer.
UAE companies and legal persons incorporated in the UAE
Foreign legal persons that are effectively managed and controlled in the UAE
Individuals conducting business or business activity in the UAE
Non-residents with a UAE permanent establishment or UAE-sourced income
Exempted: UAE government entities, qualifying public benefit entities, qualifying investment funds under specific conditions
Natural resource extraction businesses (subject to Emirate-level taxation instead)
Free zone entities can access the 0% CT rate on qualifying income — but only if they meet the Qualifying Free Zone Person (QFZP) criteria set out in the law and FTA ministerial decisions. Failing to meet any criterion exposes non-qualifying income (and potentially all income) to the standard 9% rate.
Maintain adequate substance in a UAE designated free zone
Derive qualifying income from transactions with non-UAE persons or other QFZPs
Not have a mainland UAE permanent establishment
Meet de minimis requirements: non-qualifying income must not exceed 5% of revenue or AED 5 million
Comply with transfer pricing documentation requirements
Not elect to be subject to regular corporate tax
UAE CT requires registration, annual return filing, and payment within deadlines set by the FTA. Understanding the timeline by financial year-end date is essential — filing deadlines differ for entities with June, December, or other fiscal year-ends.
CT registration with FTA — required for all taxable persons
Tax return filing: 9 months from financial year-end
Tax payment: 9 months from financial year-end
Transfer pricing documentation: maintained and available on FTA request
Related party disclosure form: filed with the annual CT return
Audited financial statements may be required for large entities
How Lexara works
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What is the UAE Corporate Tax Law?
UAE Corporate Tax is governed by Federal Decree-Law No. 47 of 2022. It introduced a 9% federal corporate tax on taxable income above AED 375,000, effective for financial years beginning on or after 1 June 2023.
What is the corporate tax rate in the UAE?
9% on taxable income above AED 375,000. Income up to AED 375,000 is taxed at 0%. Qualifying Free Zone Persons are taxed at 0% on qualifying income. Multinationals may face a top-up tax under Pillar Two if below the 15% global minimum.
Do free zone companies pay UAE Corporate Tax?
Free zone entities qualifying as a Qualifying Free Zone Person (QFZP) pay 0% on qualifying income. Non-qualifying income is taxed at 9%. QFZP status requires adequate substance, qualifying income derivation, no mainland branch, and meeting de minimis thresholds.
When is the UAE CT return due?
The corporate tax return (and payment) is due 9 months from the end of the taxable person's financial year. For a 31 December year-end, the deadline is 30 September of the following year. For a 31 May year-end, the deadline is 28 February of the following year.
Is there a small business relief under UAE CT?
Yes. Revenue below AED 3 million may qualify for Small Business Relief (SBR) under specific FTA conditions, treating taxable income as zero. SBR is not available to members of multinational enterprise groups above the Pillar Two revenue threshold.