UAE corporate tax at 9%: who pays and from when

Nine per cent is the headline. The figure underneath it is the one that gets misquoted. Article 3 of Federal Decree-Law No. 47 of 2022 sets 0% on the portion of taxable income up to a stated amount, and 9% on the portion above it. The law never names that amount. It hands the figure to the Cabinet, and Cabinet Decision No. 116 of 2022, effective from 1 February 2023, fixes it at AED 375,000.

The regime applies to tax periods commencing on or after 1 June 2023. That is Article 69. Nobody began paying in June 2023. A business enters at the start of its own first financial year beginning on or after that date, which for a company keeping a calendar year was 1 January 2024.

Where the rates sit

Cabinet Decision No. 116 of 2022 gives the 0% band to the taxable person, not to the licence. Article 2 says so in terms that close off the obvious workaround.

Article 2(2) goes further. Where the Authority establishes that one or more persons have artificially separated a business so that more than AED 375,000 in total has been taxed at 0%, that is treated as an arrangement to obtain a corporate tax benefit under Article 50, the general anti-abuse rule. The test is whether the arrangement had a legitimate commercial purpose and whether the persons substantially carry on the same business.

Working out the first tax period

Article 57 defines the tax period as the financial year, or part of it, for which a return must be filed. The financial year is the Gregorian calendar year, or the twelve-month period for which the person prepares financial statements. Article 58 allows an application to the Authority to change those dates, subject to conditions the Authority sets.

Filing and payment share a date. Article 53 requires the return no later than nine months from the end of the relevant tax period. Article 48 requires the tax itself to be settled within the same nine months. There is no separate payment window.

Registration, and the deadlines that have gone

Article 51 requires every taxable person to register and obtain a Tax Registration Number, in the form, manner and timeline the Authority prescribes. Those timelines are in FTA Decision No. 3 of 2024, effective from 1 March 2024. For a resident juridical person already in existence then, the deadline turns on the month the licence was issued, irrespective of the year of issue. Where there is more than one licence, the earliest issuance date governs.

Every one of those dates has passed. The live rule is the one for entities formed since. A juridical person incorporated in the UAE on or after 1 March 2024, a free zone person included, has three months from incorporation. A foreign company effectively managed and controlled in the UAE has three months from the end of its financial year. A non-resident whose permanent establishment arises after that date has six months from the date it came into existence; one with a nexus in the State has three.

Natural persons are treated separately. Under Cabinet Decision No. 49 of 2023, a natural person is subject to corporate tax only where turnover from business activities exceeds AED 1,000,000 in a Gregorian calendar year. Wage, personal investment income and real estate investment income sit outside that count. A resident crossing the threshold registers by 31 March of the following year.

Late registration is priced. Item 14 of the penalty table in Cabinet Decision No. 75 of 2023, inserted by Cabinet Decision No. 10 of 2024, sets an administrative penalty of AED 10,000 for failure to submit a tax registration application within the prescribed timeframe.

Free zones are inside the regime, not outside it

A free zone company is a taxable person and must register like any other. What it may get is a rate, not an exemption, and only as a qualifying free zone person. Article 18 sets the conditions: adequate substance in the State, qualifying income as specified by the Cabinet, no election out under Article 19, and compliance with Articles 34 and 55 on arm's length pricing and transfer pricing documentation.

Cabinet Decision No. 100 of 2023 lists the categories of qualifying income: income from transactions with another free zone person that is the beneficial recipient, income from qualifying activities carried on with a non-free zone person, income from qualifying intellectual property, and other income where the de minimis test is met. Ministerial Decision No. 265 of 2023 supplies the activity lists. Manufacturing, processing, trading of qualifying commodities, fund management, treasury services to related parties and logistics are qualifying. Banking, insurance, most transactions with natural persons and the ownership of immovable property outside narrow limits are excluded.

The de minimis test is in Article 3 of Ministerial Decision No. 265 of 2023. Non-qualifying revenue must not exceed 5% of total revenue in the tax period or AED 5,000,000, whichever is lower. For a free zone company with revenue of AED 40,000,000, the binding figure is AED 2,000,000, not five million.

Breaching a condition is not a partial failure. Article 18(2) removes the status from the beginning of the tax period in which the breach occurred, not from the date it happened. A company that fails the test in November loses the 0% rate for that January. Where the status holds, Article 18(4) applies the rate for the remainder of the tax incentive period in the free zone's own legislation, with no single period exceeding fifty years.

Small business relief expires sooner than most expect

Article 21 lets a resident person elect to be treated as having derived no taxable income for a tax period, if revenue stays under a threshold the Minister sets. Ministerial Decision No. 73 of 2023 sets it at AED 3,000,000 for each tax period, in the relevant period and in every previous one. Article 2(3) is absolute. Once revenue has exceeded that figure in any relevant or previous period, the election is gone permanently.

Two categories cannot elect at all. A constituent company of a multinational enterprises group is excluded, and the Federal Tax Authority states that test as consolidated group revenue above AED 3.15 billion. A qualifying free zone person is also excluded, which makes the free zone rate and the small business election alternatives rather than a pair.

Electing is not free. For a period in which the relief is claimed, exempt income, reliefs and deductions under Chapters Seven, Eight and Nine do not apply, and neither does Article 55. Tax losses incurred in that period cannot be carried forward. Nor can net interest expenditure. Losses from earlier periods do survive, provided no election is made in the year they are used.

The 15% that applies to large groups

Article 3(3) directs the Cabinet to impose a top-up tax on multinational enterprises so that the total effective rate reaches 15%. That decision is Cabinet Decision No. 142 of 2024. FTA Decision No. 12 of 2026 applies its registration rules to fiscal years starting on or after 1 January 2025, with registration due within seven months of the end of the first fiscal year in which the entity is in scope. An entity whose fiscal year ended before 30 April 2026 has until 30 November 2026.

What the published English text is

Each consolidated PDF on the Ministry of Finance and Federal Tax Authority sites carries a line at the top saying it is not an official translation. The Arabic text in the Official Gazette governs. The English files are re-issued often enough that the version date matters. The current consolidation carries four instruments in one document: the 2022 law, plus amendments made by Federal Decree-Law No. 60 of 2023, No. 40 of 2024 and No. 28 of 2025.

The structure also means the numbers move without the law changing. AED 375,000 sits in a Cabinet decision. AED 3,000,000 sits in a ministerial decision. Either can be replaced without a line of Federal Decree-Law No. 47 of 2022 being touched, so a figure quoted from a 2023 summary is worth little on its own.

This article is general information about how the rules are written, not advice on any particular business, and anyone applying it to their own affairs should take their own professional advice.

Before relying on any figure here, open the source file and read the date on it. The text used here was the January 2026 English consolidation of Federal Decree-Law No. 47 of 2022 and its amendments.