UAE Corporate Tax & VAT

The United Arab Emirates spent most of its modern history without a federal corporate income tax. That changed with Federal Decree-Law No. 47 of 2022, which introduced corporate tax for financial years beginning on or after 1 June 2023, administered by the Federal Tax Authority (FTA) through its EmaraTax portal. Value Added Tax has applied since 1 January 2018. The two are separate systems with separate registrations and filings, and most internationally active businesses in the UAE now have to consider both.

This guide sets out the headline position as it stands in 2026. It is general information, not tax advice — the rules contain conditions and exceptions that turn on your specific structure, and figures change. Always confirm against the official sources linked throughout, or speak with an advisor before acting.

Corporate Tax

The rate and the threshold

UAE corporate tax is charged on taxable profit (net profit after adjustments), not on revenue. There are two headline rates:

The 0% band on the first AED 375,000 acts as a built-in relief for smaller profits. The 9% rate applies only to the portion of taxable income above that line.

Who it applies to

Corporate tax reaches UAE-incorporated companies and businesses effectively managed in the UAE (on their worldwide income), and non-resident persons on income sourced in the UAE or earned through a permanent establishment here. Individuals are generally outside the net — but a natural person carrying on a business or business activity becomes subject to corporate tax once that activity's turnover exceeds AED 1 million in a calendar year. Personal salary, personal investment income and personal real-estate income are not taxed.

Free zones — the QFZP question

Free-zone companies are not automatically tax-free. A business can access a 0% rate on its qualifying income only if it meets the conditions of a Qualifying Free Zone Person (QFZP) — broadly, maintaining adequate substance in the UAE, earning qualifying income, staying within the permitted limits on non-qualifying ("de minimis") revenue, preparing audited financial statements and complying with transfer-pricing rules. Income that does not qualify is taxed at 9%. Losing QFZP status can apply the 9% rate to the whole of that period's income, so the conditions are worth getting right.

Small Business Relief

Resident businesses with revenue at or below AED 3 million in the current and all previous relevant tax periods may elect Small Business Relief, under which they are treated as having no taxable income for the period. As the framework currently stands, this relief is available for tax periods ending on or before 31 December 2026.

Large multinational groups — the 15% top-up tax

Separately from the 9% regime, the UAE has introduced a Domestic Minimum Top-up Tax (DMTT) aligned with the OECD's Pillar Two global minimum tax. For financial years beginning on or after 1 January 2025, large multinational groups — broadly those with consolidated global revenue of at least EUR 750 million — can face an effective minimum tax of 15% in the UAE. This affects a small number of very large groups, not the typical SME or holding company.

Registration, filing and deadlines

Taxable persons must register for corporate tax with the FTA and obtain a Corporate Tax Registration Number — registration is required even where the expected tax is 0%. One corporate tax return is filed per tax period, and both the return and any payment are due within nine months of the end of the financial year. So a business with a 31 December 2025 year-end files and pays by 30 September 2026. Audited financial statements and proper records underpin the whole process.

Value Added Tax (VAT)

The rate

VAT has applied in the UAE since 1 January 2018, originally under Federal Decree-Law No. 8 of 2017 (since amended). The standard rate is 5%. A 0% rate applies to certain supplies — notably most exports of goods and services and international transport — while some supplies are exempt, including certain financial services, residential property (after first supply), bare land and local passenger transport. Zero-rated and exempt are not the same: zero-rated supplies still count towards your registration turnover and let you recover input VAT; exempt supplies do not.

When you must register

The mandatory test looks at taxable supplies and imports over any rolling 12-month period, or what you reasonably expect over the next 30 days. Registration is done through the FTA's EmaraTax portal, which issues a 15-digit Tax Registration Number. Voluntary registration from AED 187,500 is often used by early-stage businesses that want to recover input VAT.

Filing, records and what's changing

VAT returns are filed online through EmaraTax — usually quarterly, though the FTA may set monthly periods for larger registrants — and records must be kept for at least five years. Two developments matter for 2026: mandatory e-invoicing is being phased in for B2B and B2G transactions from July 2026, and the VAT penalty framework was reformed under Cabinet Decision No. 129 of 2025. Late registration carries a fixed AED 10,000 penalty, so the registration timing above is worth watching closely.

Frequently asked questions

Official sources

• UAE Federal Tax Authority (FTA) — corporate tax and VAT law, registration and EmaraTax
• UAE Government Portal — Corporate Tax
• UAE Government Portal — Value Added Tax
• UAE Ministry of Finance — Pillar Two / DMTT policy

This guide is general information prepared by ARM Management and is current as at June 2026. It is not legal or tax advice, and tax rules, rates and thresholds change. Verify any figure against the official Federal Tax Authority sources above, and obtain advice on your specific circumstances before acting.