By the Finalytics finance team · Updated October 2026
Corporate tax has been part of doing business in the UAE since June 2023. Most founders now know it exists. Far fewer know exactly what it asks of them, and that gap is where penalties come from. This guide covers what you need to know in 2026, in plain English.
General information, current as of October 2026. It is not tax advice. Rules and penalty amounts change, so confirm your position with the Federal Tax Authority (tax.gov.ae) or a qualified adviser before you act.
Who has to register
Almost every UAE company must register for corporate tax and hold a tax registration number, including companies that expect to pay nothing. Mainland companies, free zone companies and individuals running a licensed business above the turnover threshold all fall in scope. Registration is separate from owing tax: a company with a small profit, or no profit at all, still has to register and file a return every year.
This is the single most common mistake we see. A founder assumes that because the business is small, corporate tax does not apply yet. It does, and late registration carries a penalty of AED 10,000. If you are already behind, see how we bring VAT and corporate tax up to date.
The rates
- 0% on taxable income up to AED 375,000.
- 9% on taxable income above AED 375,000.
- 15% domestic minimum top-up tax, which only applies to very large multinational groups with global revenue above roughly EUR 750 million.
Taxable income starts from the profit in your financial statements, adjusted for items the law treats differently, such as certain entertainment costs, fines and related-party charges that are not at arm's length. Clean, complete books are therefore the starting point for an accurate return. In one technology consultancy, a full review of those adjustments cut the corporate tax due by 44%.
Small Business Relief
If your revenue is AED 3 million or less, you can elect Small Business Relief and be treated as having no taxable income for that period. The relief has been extended to tax periods ending on or before 31 December 2029.
- It is measured on revenue, not profit.
- It is not automatic: you claim it in your return, and you must still register and file.
- Losses made in a period where you claim the relief cannot be carried forward.
- It is not available to a free zone company claiming the 0% qualifying rate.
Free zone companies
A Qualifying Free Zone Person can pay 0% on qualifying income. The rate is not automatic and is easy to lose. To keep it, a company generally needs real substance in the free zone, income that qualifies under the rules, non-qualifying income within the de minimis limits, arm's length pricing with related parties, and audited financial statements. Income that does not qualify is taxed at 9%, and a company that fails the conditions can lose the 0% rate for that year and the following four.
Related parties and transfer pricing
If you trade with a related party, such as a sister company, a parent abroad or the owners themselves, those transactions must be priced as if between independent parties. Above certain thresholds you also need transfer pricing documentation. Owner-led groups with several companies are the businesses most likely to get this wrong without realising.
Filing and paying
Corporate tax is filed once a year through the FTA's EmaraTax portal. The return and the payment are both due within nine months of your financial year end. A company with a 31 December year end therefore files and pays by 30 September of the following year. There are no quarterly instalments.
What it costs to get it wrong
- Late registration: AED 10,000.
- Late return: AED 500 a month for the first 12 months, then AED 1,000 a month.
- Late payment: a monthly charge on the unpaid tax until it is paid.
- Failure to keep proper records: AED 10,000, rising to AED 20,000 for a repeat.
Every one of these is avoidable by registering on time and filing to a calendar.
Keep your records
Keep accounting records and supporting documents for at least seven years. If a return is ever questioned, the burden is on you to show how the numbers were reached.
What is coming next: e-invoicing
The UAE is moving to mandatory e-invoicing through accredited service providers. Large businesses with revenue of AED 50 million or more must appoint a provider by 30 October 2026 and go live on 1 January 2027. Businesses below that threshold must appoint a provider by 31 March 2027 and go live on 1 July 2027. If your invoicing still runs on spreadsheets or a manual process, now is the time to plan the change.
Frequently asked questions
My company made a loss. Do I still file?
Yes. Registration and filing apply regardless of profit, and filing on time protects your right to carry losses forward (unless you claimed Small Business Relief).
I missed my registration deadline. What should I do?
Register immediately. The penalty does not grow while you wait, but every other obligation that depends on registration does.
Can I file the return myself?
If your books are clean and your affairs are simple, yes. The risk is not the form, it is the numbers behind it.
Do I need audited accounts?
Qualifying free zone companies do, and some others depending on licence and structure. Most mainland companies must appoint an auditor under the Commercial Companies Law, and any business with revenue above AED 50 million needs audited statements for corporate tax. If one is coming up, see how we prepare books for audit.
Related: Tax compliance · Audit preparation · Case study: 44% less corporate tax
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