What is Small Business Relief in the UAE?

Allows businesses with revenue of AED 3 million or less to elect for zero corporate tax. Available for tax periods ending on or before 31 December 2026. Must be elected on the tax return. Exceeding AED 3M in any single period permanently disqualifies the business.

How is UAE corporate tax calculated?

Calculated on taxable income (net profit) not revenue. Start with accounting profit, subtract deductible expenses and exempt income, add back non-deductible expenses, subtract carried-forward losses capped at 75% of current income. Apply 0% on first AED 375,000 then 9% above.

When is the corporate tax filing deadline?

Within 9 months after financial year end. December year end means 30 September deadline. Late filing penalty is AED 500 per month for first 12 months then AED 1,000 per month.

What expenses are deductible for UAE corporate tax?

Employee salaries, office rent, utilities, insurance, marketing, professional services, depreciation, bad debts, and business travel. Non-deductible includes fines, penalties, personal expenses, and corporate tax itself.

Can I carry forward tax losses?

Yes, indefinitely, but capped at 75% of current taxable income per period. Losses from Small Business Relief elected periods cannot be carried forward. Losses are entity-specific unless in a qualifying tax group.

UAE Corporate Tax Calculator 2026 | Free Business Tax Calculator

Q: What is the UAE corporate tax rate?

0% on taxable income up to AED 375,000 and 9% on income above that threshold. The AED 375,000 is a tax band not an exemption. All businesses must register and file returns even if taxable income is zero. Qualifying Free Zone Persons pay 0% on qualifying income.

Q: Do Free Zone companies pay corporate tax?

Subject to corporate tax but may qualify for 0% on qualifying income as a Qualifying Free Zone Person. Must maintain substance, conduct activities in the free zone, and keep non-qualifying income below 5% of revenue or AED 5 million.

Q: Is there withholding tax in the UAE?

Currently 0% withholding tax on all cross-border payments including dividends, interest, royalties and service fees. No tax withheld at source when paying foreign entities.

How to Use the UAE Corporate Tax Calculator

Estimate your UAE corporate tax liability in seconds based on Federal Decree-Law No. 47 of 2022:

Select your business typeUAE Mainland, Free Zone, or Individual/Freelancer. Each has different rules — Free Zone entities check QFZP status, individuals see the AED 1M turnover threshold.

Enter your financial detailsInput annual revenue and deductible expenses for gross profit. Add exempt income (UAE dividends) and non-deductible expenses (fines). Toggle on tax loss carry-forward if applicable.

Select your financial year endChoose December, June, March, or September to calculate your specific filing and payment deadline.

Review your complete tax reportTotal liability, effective rate, SBR eligibility, bracket visualization, quarterly payment estimates, filing deadlines, and compliance tips.

How Does UAE Corporate Tax Work?

The UAE introduced corporate tax on 1 June 2023 under Federal Decree-Law No. 47 of 2022. After decades as a tax-free jurisdiction for businesses, the UAE now levies 9% on corporate profits — but with one of the most business-friendly structures globally. A generous zero-rate band, Small Business Relief, and Free Zone incentives mean many UAE businesses still pay little to no corporate tax.

Having helped dozens of business owners through their first corporate tax filings over the past two years, the most common mistake I see is confusing revenue with taxable income. A business doing AED 5 million in revenue with AED 4.8 million in expenses has only AED 200,000 in taxable income — entirely within the 0% band.

What Are the UAE Corporate Tax Rates?

Taxable Income	Rate	Tax Due
First AED 375,000	0%	AED 0
Above AED 375,000	9%	9% of excess
SBR (revenue ≤ AED 3M)	0%	AED 0 (until Dec 2026)
Free Zone QFZP (qualifying)	0%	AED 0

Key Point: Corporate tax is on taxable income (net profit), not revenue. Revenue size alone does not determine your tax bill. The AED 375,000 is a tax band, not an exemption — all businesses must register and file even if taxable income is zero.

How Is Taxable Income Calculated?

Start with accounting profit from financial statements. Subtract deductible expenses (salaries, rent, utilities, marketing, professional services, depreciation). Subtract exempt income (UAE dividends, qualifying shareholding gains). Add back non-deductible items (fines, penalties, personal expenses). Subtract carried-forward losses capped at 75% of current income. The result is your taxable income.

Worked Example

ABC Trading LLC — Mainland

Revenue: AED 4,000,000 | Expenses: AED 3,200,000 | Exempt: AED 50,000 | Non-deductible: AED 15,000

Taxable income: AED 4M − AED 3.2M − AED 50K + AED 15K = AED 765,000

Tax on first AED 375,000: 0% = AED 0 | Tax on AED 390,000: 9% = AED 35,100

Total tax: AED 35,100 (effective rate 4.59%)

What Is Small Business Relief and When Does It Expire?

Businesses with revenue of AED 3 million or less can elect for zero tax. Available for tax periods ending on or before 31 December 2026. After that, all businesses above AED 375,000 taxable income pay 9%. You must elect SBR on your return — it is not automatic.

Critical trap: If revenue exceeds AED 3M in any single period, SBR eligibility is permanently lost — even if revenue drops below in future years. Monitor carefully near the threshold.

Do Free Zone Companies Pay Corporate Tax?

Free Zone entities are subject to corporate tax but may qualify for 0% on qualifying income as a QFZP. Requirements: maintain real substance in the free zone, conduct core activities there, and keep non-qualifying income below 5% of revenue or AED 5 million. Losing QFZP status means 9% on all income for the current year plus the next four years.

Do Freelancers Pay Corporate Tax?

Only if business turnover exceeds AED 1 million annually. Wages, investment income, and unlicensed real estate income are excluded. Below AED 1M turnover means outside scope entirely. Above AED 1M but below AED 3M can elect SBR for zero tax. Use our VAT Calculator to handle the 5% VAT side of your business.

When Are Filing Deadlines and What Are the Penalties?

Returns are due within 9 months after financial year end. December year-end: 30 September. Late filing: AED 500/month for first 12 months, then AED 1,000/month. Every business subject to corporate tax must register with FTA and get a TRN — even if taxable income is zero.

Pro Tip: Run this calculator quarterly, not just at year-end. Regular estimates prevent cash flow surprises and help with provisioning.

Frequently Asked Questions

What is the UAE corporate tax rate?▼

0% on first AED 375,000 of taxable income, 9% above. All businesses must register and file even with zero liability. QFZPs in free zones pay 0% on qualifying income.

What is Small Business Relief?▼

Zero tax for businesses with revenue ≤ AED 3M. Available until tax periods ending Dec 2026. Must be elected on the return. Exceeding AED 3M in any period permanently disqualifies you.

How is corporate tax calculated?▼

On taxable income (net profit), not revenue. Accounting profit minus deductible expenses minus exempt income plus non-deductible items minus carried-forward losses. Then 0% on first AED 375K, 9% above.

Do Free Zone companies pay tax?▼

Subject to it, but QFZPs pay 0% on qualifying income. Must maintain substance, conduct activities in the zone, keep non-qualifying income below 5%. Losing status = 9% on all income for 5 years.

When is the filing deadline?▼

9 months after year-end. December = 30 September. Payment due same date. Late filing: AED 500/month first year, AED 1,000/month after.

What expenses are deductible?▼

Salaries, rent, utilities, insurance, marketing, professional services, depreciation, bad debts, business travel. Non-deductible: fines, penalties, personal expenses, entertainment over limits, corporate tax itself.

Do freelancers pay corporate tax?▼

Only if business turnover exceeds AED 1M. Below that = outside scope. Above AED 1M but below AED 3M = may elect SBR for zero tax. Wages and investment income are excluded.

Is there withholding tax?▼

Currently 0% on all cross-border payments including dividends, interest, royalties, and service fees. No tax withheld at source when paying foreign entities.

Can I carry forward losses?▼

Yes, indefinitely, but capped at 75% of current taxable income. Must pay tax on at least 25% of current income even with large losses. Losses from SBR periods cannot be carried forward.

More Free Business Tools & Resources

Manage your complete UAE business finances:

🧾UAE VAT CalculatorAdd or remove 5% VAT with batch mode 🏗️UAE Free Zone ComparisonCompare 15 free zones side by side 📋Business License Cost CalculatorEstimate your full setup costs ✅Corporate Tax Readiness ChecklistFree download — 36 compliance checks 📊Free Zone vs Mainland ComparisonFree download — side-by-side breakdown 💼Dubai Freelance Visa ChecklistFree download — step-by-step guide

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