UAE Corporate Tax Rate 2026: 0%, 9% and 15% Explained

The Short Answer

The UAE Corporate Tax rate in 2026 is 9%. That single number hides three rates that apply to different businesses:

• 0% on the first AED 375,000 of taxable profit, for every business.
• 9% on taxable profit above AED 375,000.
• 15% for large multinational groups with global revenue of EUR 750 million or more, through the Domestic Minimum Top-up Tax.

For almost every small and mid-sized business in the UAE, only the first two matter. The 15% rate exists for a few hundred groups, and if you are not part of one, you can stop thinking about it.

The 0% Band

Every taxable business gets its first AED 375,000 of taxable profit at 0%. This is not an exemption and it is not a threshold you cross. It is a band: the first AED 375,000 is always taxed at zero, and only the profit above it is taxed at 9%.

A business with AED 500,000 of taxable profit pays 9% on AED 125,000, which is AED 11,250. Not 9% on the whole AED 500,000.

Note that this is measured on profit, not revenue. The same AED 375,000 figure appears in VAT law as a revenue threshold for registration. Same number, two different taxes, two different measures. (See the AED 375,000 rule explained.)

The 9% Rate

Anything above the band is taxed at 9%. This is the headline rate, and it is low by international standards: the UK's main rate is 25% and the US charges 21% federally before state taxes.

Taxable profit is your accounting profit under IFRS, adjusted for the rules in the Corporate Tax law. Some expenses are only partly deductible (entertainment at 50%, for instance), some income is exempt (most dividends from UAE companies), and interest deductions are capped for larger businesses. For a small services business the adjustments are usually minor and taxable profit is close to book profit.

The 15% Top-up Tax

From financial years starting on or after 1 January 2025, the UAE applies a Domestic Minimum Top-up Tax to entities that belong to a multinational group with consolidated revenue of EUR 750 million or more in at least two of the previous four years. It lifts their effective UAE rate to a minimum of 15%, in line with the OECD's global minimum tax.

If your company is a standalone UAE business, or part of a group well below that revenue level, this does not apply to you at all. It is worth knowing only so that you are not confused when you see "UAE 15% tax" in a headline.

Two Routes to Paying Less Than 9%

Small Business Relief. If your revenue is at or below AED 3 million in a tax period, you can elect to have your taxable income treated as zero for that period. It was originally due to end after 2026 and was extended in August 2026 to tax periods ending on or before 31 December 2029. It has to be actively claimed on your return. (See Small Business Relief: do you qualify.)

The Free Zone 0% rate. A Free Zone company that meets the Qualifying Free Zone Person conditions pays 0% on its qualifying income, with the 9% rate applying only to non-qualifying income. The conditions are real: substance in the zone, audited accounts, transfer pricing compliance, and a limit on how much non-qualifying income you can earn before losing the status entirely. Software and IP income gets the closest scrutiny. (See does my business qualify for 0%.) If you are choosing a zone now, we set up companies in DMCC, IFZA, Dubai Internet City and Meydan through our tech business setup service.

What Has Not Changed in 2026

The 9% rate and the AED 375,000 band are unchanged since Corporate Tax began in June 2023. The only rate changes since then are the 15% top-up for large multinationals (2025) and the Small Business Relief extension (2026). There is no announced increase to the 9% rate.

The Part People Get Wrong

The rate is the easy part. Where businesses actually lose money is registration and filing: every UAE business has to register for Corporate Tax and file a return, including those paying 0%, including Free Zone companies, and including businesses making a loss. The late registration penalty is AED 10,000, and it applies regardless of whether any tax was due. (See who needs to register and by when.) Filing also needs accounts that reconcile, which is why most of our Corporate Tax clients start with bookkeeping. From 1 July 2027, the invoices behind those accounts must also pass through an accredited e-invoicing provider.

How Khizr UAE Helps

We handle Corporate Tax registration, the annual return, and the assessment of whether the 0% band, Small Business Relief or the Free Zone rate applies to you, for software and IT services businesses in the UAE. See our Corporate Tax services.

Not sure which rate you are actually on? Send us last year's numbers and we will tell you.

WhatsApp: +971 50 428 3999

Email: info@khizruae.com