Compliance guide
UAE Corporate Tax for Free Zone entities
The UAE corporate tax rate is 0% on taxable income up to AED 375,000 and 9% above it. Free Zone entities can keep 0% on qualifying income — but only as a Qualifying Free Zone Person. This is the registration and compliance roadmap, step by step.
UAE corporate tax rates at a glance
| Band | Rate |
|---|---|
| Taxable income up to AED 375,000 | 0% |
| Taxable income above AED 375,000 | 9% |
| Qualifying Free Zone Person — qualifying income | 0% |
| Qualifying Free Zone Person — non-qualifying income | 9% |
| Large multinationals in scope of Pillar Two (from 2025) | 15% (DMTT) |
How to register for corporate tax in the UAE
1. Confirm your tax obligation
Every UAE mainland and Free Zone entity — including Free Zone companies expecting 0% tax — must register for corporate tax with the Federal Tax Authority (FTA). Registration is mandatory even where no tax is payable.
2. Register on EmaraTax
Create or use your EmaraTax account, submit the trade licence, Memorandum of Association, Emirates ID and passport copies of owners and the authorised signatory, then obtain your Corporate Tax Registration Number (TRN).
3. Set your first tax period
Your first tax period follows your financial year. A financial year ending 31 December 2025 gives a first return due by 30 September 2026 — nine months after period end.
4. Test your Qualifying Free Zone Person (QFZP) status
A QFZP must maintain adequate substance in the Free Zone, earn qualifying income, comply with transfer pricing and documentation rules, prepare audited financial statements and not elect to be taxed at the standard rate.
5. Separate qualifying from non-qualifying income
Qualifying income keeps the 0% rate. Non-qualifying revenue is tested against the de minimis threshold — the lower of AED 5 million or 5% of total revenue. Breaching it forfeits QFZP status for that tax period and the following four.
6. Keep audit-ready records
QFZPs must file audited financial statements. Under Federal Decree-Law No. 17 of 2025 the FTA audit window now extends to 7 years for corporate tax, so records and transfer pricing files must be retained accordingly.
Qualifying vs non-qualifying income
Qualifying income generally covers transactions with other Free Zone Persons and defined qualifying activities — manufacturing and processing, holding of shares and securities, ownership and operation of ships, fund and wealth management, reinsurance, headquarters services to related parties, treasury and financing, and logistics and distribution from a Designated Zone.
- Revenue from mainland UAE customers is usually non-qualifying.
- Income attributable to a domestic or foreign permanent establishment is taxed at 9%.
- Income from immovable property in a Free Zone held with non-Free Zone persons is non-qualifying (commercial property aside).
- Breaching the de minimis threshold — the lower of AED 5m or 5% of revenue — forfeits QFZP status for five tax periods.
Frequently asked questions
What is the UAE corporate tax rate?
0% on taxable income up to AED 375,000 and 9% above that threshold under Federal Decree-Law No. 47 of 2022. Qualifying Free Zone Persons retain 0% on qualifying income, and large multinationals may fall under the 15% Domestic Minimum Top-up Tax.
How do I register for corporate tax in the UAE?
Register through the FTA's EmaraTax portal with your trade licence, Memorandum of Association, and the Emirates ID and passport of the owners and authorised signatory. The FTA issues a Corporate Tax Registration Number once approved.
Do Free Zone companies pay corporate tax in the UAE?
Free Zone companies must register and file. A Qualifying Free Zone Person pays 0% on qualifying income and 9% on non-qualifying income. Failing the substance, de minimis or audit conditions moves the whole entity to the 9% regime.
What is qualifying income for a Free Zone Person?
Broadly, income from transactions with other Free Zone Persons and from qualifying activities such as manufacturing, processing, holding of shares and securities, fund management, reinsurance, headquarters services and logistics — excluding excluded activities like most mainland UAE and natural-person transactions.
What is the corporate tax filing deadline?
The return and any payment are due within nine months of the end of the tax period. A 31 December year end means a 30 September deadline the following year.
What are the penalties for late corporate tax registration?
The FTA imposes an administrative penalty of AED 10,000 for late registration, with further penalties for late filing, late payment and incorrect returns.
Services referenced in this guide
- Corporate tax registrationFTA registration, TRN and first-return planning.
- Tax advisory & filingQualifying income reviews and annual CT returns.
- Transfer pricingLocal File, Master File and disclosure forms.
- Audit & assuranceAudited statements QFZPs must maintain.
- Accounting & bookkeepingIFRS books that stand up to an FTA review.
- Economic substance (ESR)Substance tests behind Free Zone relief.
More answers on the FAQ hub or browse all services.
Need your Free Zone entity assessed?
Our partners review substance, income streams and audit readiness before the FTA does.