What is the corporate tax rate in the UAE?
9% on taxable income above AED 375,000, and 0% on the first AED 375,000. Article 3 of Federal Decree-Law No. 47 of 2022 sets 0% up to a threshold fixed by Cabinet decision and 9% above it, and the FTA's general guide states the threshold as AED 375,000. Qualifying free zone persons have separate rates.
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How the band works
The band is marginal. A company with AED 1,000,000 of taxable income pays 0% on the first AED 375,000 and 9% on the remaining AED 625,000, AED 56,250 in total. It is applied automatically and is separate from small business relief, which is a revenue-based election.
Taxable income is not revenue
Taxable income starts from the accounting net profit, adjusted for items the law specifies, such as the 50% limit on entertainment and non-deductible fines. For a contractor, how revenue on long contracts is recognised in the accounts directly affects taxable income.
How SupaJack Construct helps
The tax module calculates corporate tax on taxable income with the AED 375,000 zero band and 9% above it, and treats client entertainment as 50% non-deductible. Taxable income starts from the ledger the projects post to, so job costs, certificates and payroll already sit in the accounts.
Related tools and guides
See the answers on the corporate tax rate, small business relief, the corporate tax return deadline, carrying tax losses forward and whether fines are deductible, plus finance and VAT in SupaJack Construct, the VAT guide for contractors and the construction accounting software page.
Worked example
A fit-out contractor's accounts show a net profit of AED 2,000,000 with no tax adjustments. Corporate tax is 9% of AED 1,625,000, the amount above AED 375,000, which is AED 146,250.
Questions people ask
Is the 9% on all profit?
No. The first AED 375,000 of taxable income is at 0%.
Is the AED 375,000 the same as small business relief?
No. Small business relief is a separate election based on revenue of AED 3 million or less.
When did corporate tax start?
For tax periods starting on or after 1 June 2023.