Does my UAE company pay corporate tax?

UAE corporate tax is 9% on taxable profits above AED 375,000; profits up to that threshold are effectively taxed at 0%. Some qualifying freezone income can still qualify for a 0% rate if strict conditions are met. Most companies must register and file regardless of whether tax is due.

Is there VAT in the UAE?

Yes, VAT is 5%. Businesses must register for VAT once their taxable turnover passes the mandatory registration threshold, and may register voluntarily below it. Registered businesses charge VAT and file periodic returns.

UAE corporate tax and VAT: the essentials for business owners

By Alan Underwood, Founder — Dubai Transition Consultants · Last reviewed 4 June 2026

In shortThe UAE has 0% personal income tax, but businesses face 9% corporate tax on profits above AED 375,000 and 5% VAT once turnover passes the registration threshold. Some qualifying freezone income can still benefit from a 0% corporate-tax rate if strict conditions are met. Most companies also have annual filing and record-keeping duties.

The UAE is still highly tax-efficient, but “tax-free” is out of date for businesses. Two taxes matter, plus the obligations that come with them.

Corporate tax

UAE corporate tax is 9% on taxable profits above AED 375,000 — profits up to that threshold are effectively at 0%. Crucially, registration and filing are generally required even if no tax is due, so this isn’t something to ignore just because you’re small.

There’s a freezone angle: a “qualifying free zone person” earning “qualifying income” can still benefit from a 0% corporate-tax rate — but the conditions are strict and specific, and not every freezone company qualifies. It’s worth checking rather than assuming.

VAT

VAT is 5%. Once your taxable turnover passes the mandatory registration threshold, you must register, charge VAT, and file periodic returns. You can register voluntarily below the threshold if it suits your business.

The obligations behind the taxes

Both taxes come with record-keeping and filing duties, and many companies also fall under economic substance and ultimate beneficial owner (UBO) rules. Staying compliant is mostly about good records and meeting deadlines — not difficult, but not optional.

What it means for you

For most owners the UAE is still very competitive — but the days of “set up and forget” are over. Build registration, filing and bookkeeping into your plan from day one, and the tax side stays simple.

General guidance, not personal legal, tax or financial advice. UAE rules and fees change and individual circumstances differ — speak to us, or another suitably qualified professional, before acting. See our full disclaimer.

Where this gets specific to you: the general route is one thing — the right structure, freezone and visa for you depend on your activity, where your customers are, your nationality, and your residency goals. That's exactly what a short conversation pins down.