A trading company in Deira closes its books with AED 560,000 of profit and the owner asks the obvious question: how much of that goes to the Federal Tax Authority? The answer isn’t 9% of AED 560,000. It isn’t 9% of the amount above AED 375,000 either, not until you’ve adjusted for the client dinners, the fine from the municipality and the dividend from a subsidiary. This corporate tax calculator UAE does those adjustments for you, then applies the 0% and 9% bands and shows the figure that belongs on your return.
Corporate tax is now a fact of life for most UAE companies. The FTA’s 2025 annual report, published in June 2026, records more than 245,000 corporate tax registrations during 2025 alone (Federal Tax Authority). Every one of those businesses has to turn an accounting profit into a taxable one, and that’s where the mistakes happen.
The calculator handles the arithmetic. The rest of this page covers what most tools leave out. Which expenses the law actually disallows. When Small Business Relief takes the whole bill to zero. How free zone status, tax losses and foreign income change the number.
How does this corporate tax calculator UAE work?
Pick your business type, tax period and revenue. The Quick calculator takes your taxable income; the Detailed calculator builds it from accounting profit. Both test Small Business Relief before applying it, tax the first AED 375,000 at 0% and the rest at 9%, and show the tax payable and your effective rate.
What you enter
The questions follow the order of a corporate tax return: who you are, the period, your revenue, then the profit and the adjustments that turn it into taxable income.
- Your business type: mainland company, free zone company, natural person or sole establishment, tax group, non-resident with a UAE permanent establishment, or a government, public benefit, fund or extractive business.
- The tax period, as a calendar year or your own financial year dates.
- Revenue for the period, and whether revenue passed AED 3 million in any earlier period since June 2023.
- Whether the business belongs to a group with worldwide revenue of EUR 750 million or more.
- Quick calculator: your taxable income. Detailed calculator: the accounting net profit or loss from your financial statements.
- Exempt income included in that profit, such as dividends from UAE companies, so it can be taken back out.
- Client entertainment, which the calculator restricts to 50%, and fines, penalties, donations to non-approved bodies and recoverable VAT, which it disallows in full.
- Net interest expense, tax losses brought forward, and foreign tax paid on income that’s also taxed here.
Free zone companies also answer whether they meet the Qualifying Free Zone Person conditions, then give their non-qualifying revenue and qualifying income.
What the result shows
- Your position: standard rules, Small Business Relief applied, Qualifying Free Zone Person, or outside corporate tax.
- Taxable income: accounting profit after exempt income is removed, disallowed expenses are added back, and brought-forward losses are used (capped at 75% of the year’s income).
- Corporate tax: 0% on the first AED 375,000 and 9% on everything above it, each band shown on its own line.
- Foreign tax credit and Corporate Tax payable: what you actually owe the FTA.
- Effective tax rate: tax payable as a percentage of taxable income.
Elect Small Business Relief and the calculator checks every condition before it shows AED 0: revenue of AED 3 million or less in this period and every earlier one, UAE residence, no membership of a group with worldwide revenue of EUR 750 million or more, no Qualifying Free Zone Person status, and a tax period ending by 31 December 2029. If one fails, it tells you which. Choose Free zone company and it asks whether the Qualifying Free Zone Person conditions are met before it splits qualifying income from the rest.
How is corporate tax calculated in the UAE?
Start with the net profit in your financial statements. Remove exempt income, add back non-deductible expenses and deduct any tax losses brought forward. That’s taxable income. The first AED 375,000 is taxed at 0% and the remainder at 9%. Foreign tax credits then reduce the bill.
The UAE deliberately built the system on accounting profit under IFRS so businesses don’t keep two sets of books. Federal Decree-Law No. 47 of 2022 sets the rates and Article 20 lists the adjustments (Ministry of Finance). A single-entity trading company usually has three or four adjustments a year. A multinational group has dozens.
Written as a formula:
Taxable income = Accounting profit − Exempt income + Disallowed expenses − Tax losses used
Corporate tax = (Taxable income − 375,000) × 9%, never below zero, less any foreign tax credit
A Qualifying Free Zone Person works differently: qualifying income is taxed at 0% and everything else at 9% from the first dirham, with no AED 375,000 band.
A worked example that gets the bands right
ABC Trading LLC, mainland Dubai, reports accounting profit of AED 560,000 for the year to 31 December 2025. Inside that figure are AED 20,000 of client entertainment, a AED 5,000 municipality fine and a AED 15,000 dividend from a UAE subsidiary.
| Step | AED |
|---|---|
| Accounting profit | 560,000 |
| Less: exempt UAE dividend | (15,000) |
| Add: 50% of client entertainment disallowed | 10,000 |
| Add: fine disallowed | 5,000 |
| Taxable income | 560,000 |
| Tax on first 375,000 at 0% | 0 |
| Tax on remaining 185,000 at 9% | 16,650 |
| Corporate tax payable | 16,650 |
| Effective rate on taxable income | 2.97% |
Notice the adjustments cancelled out here. They won’t always. Leave the exempt dividend in and taxable income rises to AED 575,000, with a bill of AED 18,000. That’s the point of running the numbers rather than guessing.
Tax on common taxable income levels
| Taxable income (AED) | Tax at 0% band | Tax at 9% | Total tax (AED) | Effective rate |
|---|---|---|---|---|
| 300,000 | 0 | 0 | 0 | 0.00% |
| 375,000 | 0 | 0 | 0 | 0.00% |
| 400,000 | 0 | 2,250 | 2,250 | 0.56% |
| 500,000 | 0 | 11,250 | 11,250 | 2.25% |
| 750,000 | 0 | 33,750 | 33,750 | 4.50% |
| 1,000,000 | 0 | 56,250 | 56,250 | 5.63% |
| 2,000,000 | 0 | 146,250 | 146,250 | 7.31% |
| 5,000,000 | 0 | 416,250 | 416,250 | 8.33% |
A company on AED 500,000 of taxable income pays AED 11,250, not AED 45,000. We still see that second figure quoted on forums and even on some accounting firms’ pages, and it comes from ignoring the 0% band entirely. The effective rate only creeps toward 9% at very high profits. Anyone calculating taxable income in the UAE for the first time should test their figure against this table before filing.
Which expenses are deductible and which are not?
Any expense incurred wholly and exclusively for the business is deductible. That covers salaries, rent, utilities, professional fees, bank charges and accounting depreciation. Client entertainment is limited to 50%. Fines, penalties, bribes, dividends, donations to non-approved bodies and recoverable VAT are not deductible at all.
The table below is what the calculator applies behind the scenes.
| Expense | Treatment | Legal basis |
|---|---|---|
| Cost of goods sold, purchases | Fully deductible | Art. 28 |
| Salaries, wages, end-of-service | Fully deductible (owner’s salary too, if arm’s length) | Art. 28 |
| Rent, utilities, insurance | Fully deductible | Art. 28 |
| Legal, audit, accounting fees | Fully deductible | Art. 28 |
| Depreciation and amortisation (IFRS) | Fully deductible | Art. 20 (no separate capital allowance regime) |
| Staff entertainment, team events | Fully deductible as staff cost | Art. 28 |
| Client, supplier, shareholder entertainment | 50% deductible | Art. 32 |
| Interest and bank charges | Deductible; net interest above AED 12 million capped at 30% of tax EBITDA | Art. 30, MD 126/2023 |
| Fines and penalties | Not deductible | Art. 33 |
| Donations to non-qualifying bodies | Not deductible | Art. 33 |
| Recoverable input VAT | Not deductible | Art. 33 |
| Dividends and profit distributions | Not deductible | Art. 33 |
| Personal expenses of owners | Not deductible | Art. 28 |
The depreciation mistake
Depreciation is deductible. Several calculator pages, including the old version of this one, listed it as a disallowed expense. That idea seems borrowed from countries that run separate capital allowance systems. The UAE doesn’t. Your IFRS depreciation charge stays in the profit figure and reduces taxable income. The one wrinkle is investment property held at fair value, which carries no depreciation charge. Since Ministerial Decision 173 of 2025, owners can elect a 4% annual tax depreciation on cost for tax periods starting on or after 1 January 2025. The election can’t be undone.
The entertainment rule
Only half of what you spend entertaining customers, suppliers, shareholders or business partners is deductible. Meals, hotel stays, event tickets and gifts all count. A AED 20,000 client hospitality budget gives you a AED 10,000 deduction. Staff parties and team lunches aren’t caught, because they’re an employee cost.
The interest cap
Net interest expense above AED 12 million a year is deductible only up to the greater of AED 12 million and 30% of tax-adjusted EBITDA, with the excess carried forward for 10 years. Most trading and service companies never touch this. Property developers and leveraged holding companies do. Once net interest passes the AED 12 million line, the Detailed calculator asks for depreciation and amortisation and applies the cap for the year; carrying the excess forward is outside its scope.
Which corporate tax scenario applies to your business?
A UAE resident business with revenue of AED 3 million or less, in this period and every earlier one, can elect Small Business Relief for periods ending by 31 December 2029. Other companies pay 9% above AED 375,000. A Qualifying Free Zone Person pays 0% on qualifying income. Freelancers pay only once turnover passes AED 1 million.
The 0% and 9% bands are the same for everyone, but who reaches them and on what income differs sharply by business type. The calculator’s business-type question exists because these are different calculations, not different rates.
Businesses with revenue up to AED 3 million
Elect Small Business Relief on your return and you’re treated as having no taxable income at all. Ministerial Decision 131 of 2026 extended the relief to tax periods ending on or before 31 December 2029, where it had been due to run out at the end of 2026. The conditions: revenue of AED 3 million or less in this period and in every earlier one since June 2023; UAE residence; no membership of a multinational group with worldwide revenue of EUR 750 million (about AED 3.15 billion) or more; and no Qualifying Free Zone Person status. You still register and file a simplified return.
The trade-off is real. A loss-making year under the relief creates no tax loss to carry forward, and disallowed interest from that year can’t be carried forward either. A startup expecting big profits in year three sometimes does better skipping the relief in a loss year to bank the loss. Run both versions in the calculator; it takes a minute.
Mainland company above AED 3 million revenue
Standard treatment: full adjustments, 0% on the first AED 375,000 of taxable income, 9% above. Revenue above AED 50 million also triggers mandatory audited financial statements. Related-party dealings need arm’s length pricing and, above certain thresholds, transfer pricing documentation.
Free zone company
Free zone status alone changes nothing; a Dubai South or RAKEZ company with mainland customers pays the same 9% as a Deira LLC. The 0% rate belongs only to a Qualifying Free Zone Person. That means real substance in the zone, audited accounts, transfer pricing compliance, and income from a defined list of activities: trading with other free zone businesses, manufacturing, logistics, fund management and a few more. Non-qualifying revenue must stay within the de minimis limit, which is 5% of total revenue or AED 5 million, whichever is lower. Breach it and you lose the status for that year and the four after it.
Two details trip people up. Non-qualifying income of a Qualifying Free Zone Person is taxed at 9% from the first dirham; the AED 375,000 band doesn’t apply. And a Qualifying Free Zone Person can’t elect Small Business Relief. Choose Free zone company in the calculator, answer Yes to the conditions, and it handles both.
Freelancers, sole proprietors and other natural persons
Individuals running a business are only in scope once turnover from that business passes AED 1 million in a calendar year. Salary, personal investment income and personal real estate income don’t count. A freelance designer on AED 800,000 of fees has no corporate tax registration, return or bill. Cross AED 1 million and everything above applies, including the 0% band and, for revenue up to AED 3 million, Small Business Relief.
Loss-making companies and start-ups
Tax losses carry forward indefinitely. They can offset up to 75% of taxable income in any later year, as long as the same owners hold at least 50% throughout or the business stays broadly the same. Say a company has AED 500,000 of brought-forward losses and AED 400,000 of profit this year. It can use only AED 300,000 of them (75% of 400,000). That leaves AED 100,000 taxable, inside the 0% band, and AED 200,000 of losses for next year. Enter losses in the Detailed calculator and it applies the cap.
Companies with foreign income
Dividends from UAE companies are exempt. Dividends and capital gains from shareholdings of 5% or more held for 12 months are exempt under the participation exemption, provided the company paying them is taxed at 9% or more (or meets the equivalent tests). Where foreign income is taxable here and was already taxed abroad, the foreign tax credit in the UAE cuts your UAE bill. The credit is the lower of the foreign tax paid and the UAE tax on that income. Unused credit is lost, not carried forward.
Large multinational groups
Groups with consolidated revenue of EUR 750 million or more in two of the last four years fall under the Domestic Minimum Top-up Tax. It applies from financial years starting 1 January 2025 and lifts their effective UAE rate to 15%. The calculator flags this but doesn’t model it; a Pillar Two computation isn’t a web form job.
| Business type | Rate on taxable income | 0% band applies? | Special relief | Calculator setting |
|---|---|---|---|---|
| Resident business, revenue ≤ AED 3m (every period) | No taxable income if Small Business Relief is elected | n/a | Small Business Relief to 31 Dec 2029 | Mainland company, elect relief |
| Mainland company, revenue > AED 3m | 0% to 375k, 9% above | Yes | Losses, foreign tax credit | Mainland company |
| Free zone company (not a Qualifying Free Zone Person) | 0% to 375k, 9% above | Yes | Small Business Relief if ≤ AED 3m | Free zone company, conditions No |
| Qualifying Free Zone Person | 0% qualifying, 9% non-qualifying | No | None | Free zone company, conditions Yes |
| Natural person, turnover ≤ AED 1m | Out of scope | n/a | n/a | Natural person |
| Natural person, turnover > AED 1m | 0% to 375k, 9% above | Yes | Small Business Relief if ≤ AED 3m | Natural person |
| Group with revenue ≥ EUR 750m | 9% plus top-up to 15% | Yes | None | Group question Yes (top-up flagged) |
| Tax group (95% owned) | Single return on group taxable income | Yes, once | Losses shared | Tax group |
When do you have to register, file and pay?
Every company must register for corporate tax, whether or not it will owe anything. The return and payment are due within nine months of the end of the tax period. A company with a 31 December 2025 year end files and pays by 30 September 2026.
Registration is still the step businesses miss. Late registration carries a AED 10,000 penalty. The FTA’s waiver initiative cancels it if you file your first return within seven months of your first period end instead of nine. The FTA reported more than 68,000 businesses benefiting from that waiver by early 2026. If you’re behind, the corporate tax registration services in the UAE team can usually get it done in days.
| Obligation | Deadline or amount |
|---|---|
| Register for corporate tax | Per FTA timeline by licence issue month; AED 10,000 if late |
| File return and pay | 9 months after tax period end |
| Late return | AED 500 per month for 12 months, then AED 1,000 per month |
| Late payment | 14% per year, accrued monthly |
| Audited financial statements | Mandatory if revenue exceeds AED 50 million, and for every Qualifying Free Zone Person |
| Keep records | 7 years; AED 10,000 penalty, AED 20,000 if repeated |
| Transfer pricing disclosure form | With the return, if related-party transactions exceed AED 40 million |
The UAE corporate tax deadline for most calendar-year companies falls on 30 September, right when VAT returns and audit sign-offs pile up. Firms that estimate the liability early with a calculator, then set the cash aside, don’t get caught. Firms that wait for the auditor do.
The tool above is free and needs no login. It’s built for estimates, not filings. When your year involves a free zone split, a loss carry-forward, related-party transactions or foreign income, a senior chartered accountant should check the computation before it becomes a return. That check is what corporate tax return filing services are for.
