UAE Corporate Tax (CT) at 9% applies to most businesses from their financial year starting on or after June 1, 2023. However, rates and exemptions vary significantly by entity type and location. This guide compares CT across the most common UAE business structures.
UAE Corporate Tax Rate Summary
| Entity Type | Tax Rate | Conditions |
|---|---|---|
| Small business (turnover < AED 1M) | 0% | Small Business Relief applies |
| Any entity (taxable income < AED 375,000) | 0% | Standard exemption threshold |
| Mainland company (taxable income > AED 375K) | 9% | Standard rate |
| Qualifying Free Zone Person (QFZP) | 0% | On qualifying income only |
| QFZP non-qualifying income | 9% | Standard rate applies |
| Large Multinationals (Pillar Two) | 15% | Revenue > EUR 750M globally |
Qualifying Free Zone Person (QFZP) Status
Free zone companies can earn 0% CT on qualifying income if they: maintain adequate substance in the UAE, derive income from qualifying activities (trading with other free zone companies, certain financial services, manufacturing), do not elect for the standard 9% rate, and have audited financial statements. Trading with UAE mainland companies generally generates non-qualifying income taxed at 9%.
DIFC and ADGM
DIFC and ADGM companies incorporated in these financial centres follow the same UAE CT rules as other free zone companies. They can qualify for QFZP status if they meet the substance and activity requirements. DIFC Companies Law allows for 50-year tax holiday guarantees enshrined in legislation — but these only protect against local DIFC taxes, not UAE federal corporate tax.