How the AED 375,000 0% band and Small Business Relief work, who qualifies, and what you still need to file even when no tax is due.
The two rates you need to know
UAE Corporate Tax applies at 0% on the first AED 375,000 of taxable income and 9% on everything above it. The 0% band applies to every taxable person, so a company with AED 500,000 of taxable income pays 9% only on the AED 125,000 above the threshold.
Taxable income starts from your accounting net profit and is then adjusted for items such as non-deductible expenses, exempt income and transfer pricing adjustments.
Small Business Relief explained
Resident businesses with revenue of AED 3 million or less in the relevant and all previous tax periods can elect Small Business Relief. When elected, the business is treated as having no taxable income for that period.
The relief is available for tax periods ending on or before 31 December 2026, and it must be elected in the tax return. Qualifying Free Zone Persons and members of multinational groups cannot use it.
MOULAY tip: Not sure which option applies to you? Run your numbers in our tax compliance simulator before you commit.
What you still have to file
Even with 0% tax due, every taxable person must register for Corporate Tax, obtain a Corporate Tax registration number and file an annual return within nine months of the end of the financial year.
Late registration and late filing attract fixed penalties, so a zero liability is not a reason to skip compliance.
How MOULAY helps
We register your entity with the FTA, assess whether Small Business Relief or the Free Zone regime gives the better outcome, and prepare and file your annual return.