Taxes in the Emirates — 0 %, 9 % and the conditions in between.
For individuals it stays at zero. For companies a 9 % rate has applied since 2023 — with one exception tied to substance and tested every year.
Individuals in the UAE pay 0 % income tax on salary, dividends and capital gains. Companies pay 9 % corporate tax on taxable profit above AED 375,000, 0 % below. Qualifying Free Zone Persons pay 0 % on qualifying income where substance and de-minimis conditions are met. VAT is 5 %. As of 09/2026.
UAE corporate tax is a federal tax on the taxable profit of companies and business activities above a threshold of AED 375,000; it applies to tax periods starting on or after 1 June 2023 in all seven emirates.
Updated: 01/09/2026
The tax matrix
| Who or what | Rate | Condition | Obligations |
|---|---|---|---|
| Individual — salary, dividends, capital gains | 0 % | none | no UAE income tax return |
| Individual — business activity above AED 1m turnover | 9 % | on taxable profit above AED 375,000 | registration and return |
| Mainland company | 9 % | above AED 375,000 taxable profit, 0 % below | registration, bookkeeping, return |
| Qualifying Free Zone Person | 0 % | on qualifying income, with substance and de-minimis threshold | audited accounts, transfer pricing, return |
| Free zone company without QFZP status | 9 % | above AED 375,000 taxable profit | as mainland |
| Group above EUR 750m revenue | 15 % | Domestic Minimum Top-up Tax | additional reporting |
| Turnover — VAT | 5 % | registration above AED 375,000 taxable turnover | quarterly or monthly filing |
As of 09/2026. Sources: UAE Federal Tax Authority, Federal Decree-Law No. 47 of 2022, Cabinet Decision No. 100 of 2023.
Worked example: AED 1,000,000 taxable profit
A mainland company with AED 1,000,000 of taxable profit pays nothing on the first AED 375,000. On the remaining AED 625,000, 9 % applies — AED 56,250. The effective burden is therefore 5.6 %.
The same company as a Qualifying Free Zone Person whose entire profit is qualifying income pays AED 0 — provided substance, de-minimis threshold and documentation are in order.
Breach the de-minimis threshold and the regular rate applies to the entire taxable profit: AED 56,250, and QFZP status is lost for the current and the following four tax years.
Distribution to the shareholder remains untaxed in the UAE in all cases. What happens in the shareholder’s country of residence is a separate question — answered by their tax adviser.
What often gets overlooked
Small Business Relief is expiring
Companies with up to AED 3m revenue may elect 0 % — only for tax periods ending on or before 31 Dec 2026 and only if the election is made actively. After that the regular rate applies.
Registration always applies
Even at 0 % you must register for corporate tax and file a return. Failures attract penalties regardless of the amount of tax.
VAT is a separate matter
5 % on taxable supplies, mandatory registration above AED 375,000 taxable turnover, voluntary from AED 187,500. Exports and certain services can be zero-rated — which is not the same as exempt.
DMTT concerns groups only
The 15 % minimum tax applies to multinational groups above EUR 750m consolidated revenue. It plays no role for the typical owner-managed business.
Bookkeeping is mandatory
Financial statements under IFRS, records kept seven years. For QFZP status audited accounts are a requirement, not an option.
Tax residency is not automatic
A visa alone does not make you UAE tax resident. A tax residency certificate depends on days present, housing and centre of life.
Deadlines and duties at a glance
- Corporate tax registration: within the deadline set by the FTA after licence issuance
- Corporate tax return: within nine months after the end of the tax period
- VAT registration: above AED 375,000 taxable turnover in twelve months
- VAT filing: quarterly, monthly for larger turnover
- Financial statements: under IFRS, retention period seven years
- Transfer pricing documentation: for transactions with related parties
- Ultimate beneficial owners: filing with the free zone or authority register
Frequently asked questions
Do I really pay no income tax in Dubai?
No income tax arises in the UAE on salary, dividends and capital gains of individuals, regardless of amount. Corporate tax concerns companies and larger business activities.
How high is corporate tax?
9 % on taxable profit above AED 375,000, 0 % below. Both are reflected in the same return.
When do I pay 0 % as a free zone company?
When you are a Qualifying Free Zone Person: adequate substance in the zone, income from qualifying activities, compliance with the de-minimis threshold of 5 % or AED 5m, and audited accounts. Tested annually.
What happens if I breach the de-minimis threshold?
The 9 % rate applies to the entire taxable profit, and QFZP status falls away for the current and the following four tax years.
Do I have to register even at 0 %?
Yes. Registration and filing duties apply regardless of the rate. Late filings cost penalties even where no tax is due.
How does VAT work in the UAE?
5 % on taxable supplies. Mandatory registration above AED 375,000 taxable turnover in twelve months, voluntary from AED 187,500. Filing is quarterly or monthly.
What is the DMTT?
The 15 % Domestic Minimum Top-up Tax for multinational groups above EUR 750m consolidated revenue. It is the implementation of the global minimum tax and does not affect mid-sized structures.
Does a visa make me UAE tax resident automatically?
No. Residency depends on days present, housing and centre of life. A tax residency certificate has its own evidence requirements — and your home country assesses independently.
Exit Palm does not provide legal or tax advice. For legal and tax questions we work with licensed partners in Germany and the UAE. All information without warranty, as of the date shown.
Which rate applies to your structure — and what does it depend on?
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