Corporate tax rate UAE: the 0% band, the 9% rate and examples

Article 3(1) of Federal Decree-Law No. 47 of 2022 creates a 0% rate on taxable income up to an amount fixed by Cabinet decision, and 9% on taxable income above it. Cabinet Decision No. 116 of 2022 fixes that amount at AED 375,000. The band applies once per taxable person per tax period, even when the person runs several businesses.

Because it is a band and not a cliff, crossing AED 375,000 never makes the whole profit taxable at 9%. Only the slice above the line is charged.

Three Dubai companies with a calendar year:

• Taxable income AED 300,000: all inside the 0% band, tax payable AED 0, return still filed.
• Taxable income AED 1,000,000: AED 625,000 above the band at 9%, tax payable AED 56,250.
• Taxable income AED 2,400,000: AED 2,025,000 above the band at 9%, tax payable AED 182,250.

Article 3(2) gives a qualifying free zone person 0% on qualifying income and 9% on taxable income that is not qualifying income; the 375,000 band does not work the same way for them. A resident business that elects small business relief is treated as having no taxable income for that period, so no rate applies at all.

Large multinational groups may also face top-up taxes. The FTA publishes separate top-up tax guides, and those rules sit outside this page.

The effective rate depends on adjustments, not just the band. Entertainment costs are only 50% deductible, fines are not deductible, and net interest is capped. Ask the HelloBooks AI agent "estimate our corporate tax for this year to date" and it applies the bands to the ledger profit, lists the adjustments it assumed, and shows the AED figure. Your accountant confirms the adjustments before anything goes near EmaraTax.