Corporate Tax is now a fact of life for every UAE business — but for most small companies it is far less painful than founders fear. Here is what actually applies in 2026, in plain English.
The rates
- 0% on taxable profit up to AED 375,000
- 9% on taxable profit above that threshold
- 0% personal income tax remains — salaries and personal investment income are untouched
A company netting AED 500,000 profit pays 9% only on the AED 125,000 above the threshold — AED 11,250, an effective rate of just 2.25%.
Who must register?
Practically every UAE licensee — mainland, free zone, even many freelancers — must register for Corporate Tax with the Federal Tax Authority via EmaraTax and obtain a Tax Registration Number. Registration is required even if you will owe zero tax. Late registration attracts a penalty, so this is the first box to tick after licence issuance.
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 — no tax, simplified compliance. This is the single most valuable election for startups and small consultancies, and many miss it simply because nobody told them.
What about free zone companies?
Free zone entities can still enjoy a 0% rate as a Qualifying Free Zone Person (QFZP) — but only on qualifying income (broadly, trade with other free zone entities and foreign markets, plus certain qualifying activities), and only if substance and transfer-pricing conditions are met. Selling into the UAE mainland generally taints that income. QFZP status is powerful but technical — get it assessed rather than assumed.
Filing deadlines
- Tax period: usually your financial year
- Return + payment: due within 9 months of the financial year end
- Example: year ending 31 December 2025 → file and pay by 30 September 2026
You file once per year; there are no quarterly Corporate Tax instalments for typical SMEs.
Records you must keep
Proper accounting records are now mandatory — invoices, expenses, payroll and bank statements — retained for at least 7 years. If your revenue exceeds AED 50 million (or you claim QFZP status), audited financial statements are required.
The practical to-do list
- Register on EmaraTax and get your TRN
- Decide: Small Business Relief or standard calculation
- Keep clean books from day one (bookkeeping is cheaper than reconstruction)
- Diarise your filing deadline — 9 months after year end
- If you're in a free zone, get a QFZP assessment before assuming 0%
Get registered and compliant
Smartgic Visa handles Corporate Tax and VAT registration, bookkeeping referrals and filing support alongside your licence and visas — one team, everything compliant. Talk to an advisor today.