How to calculate UAE corporate tax at the 9 percent rate

What is the UAE corporate tax calculator 9 percent rule?

The UAE corporate tax calculator 9 percent rule applies the headline rate set by Federal Decree-Law 47 of 2022. Taxable income up to AED 375,000 is taxed at 0%. Income above AED 375,000 is taxed at 9%. Large multinationals with global revenue over EUR 750 million pay a 15% domestic minimum top-up tax (DMTT) from January 2025.

This guide walks UAE business owners and finance teams through the math step by step. You can apply it to a sole establishment, a mainland LLC, or a free zone company that is not a Qualifying Free Zone Person (QFZP). For the full regime overview, see our UAE Corporate Tax hub.

The UAE corporate tax brackets in plain English

There are three bands you need to know. They apply to taxable income, not revenue. Taxable income is accounting profit adjusted for items the Federal Tax Authority (FTA) requires you to add back or deduct.

The 0% band is not a personal allowance for owners. It is a per-entity threshold. Two related companies each get their own AED 375,000 band, unless anti-fragmentation rules apply.

What counts as taxable income

Start with accounting net profit prepared under IFRS or IFRS for SMEs. Then adjust for: unrealised gains and losses, exempt income such as qualifying dividends, non-deductible expenses (for example, 50% of client entertainment and all fines), interest deduction limits, and prior year tax losses carried forward.

What the 9 percent rate actually taxes

The 9% rate applies only to the slice of taxable income above AED 375,000. It is not a flat 9% on total profit. This bracketed approach is similar to a personal income tax band system, and it is the key to the worked examples below.

How to calculate UAE corporate tax at 9 percent step by step

Follow these five steps. Numbers are in digits, amounts in AED.

1. Take net accounting profit from your financial statements.
2. Add back non-deductible expenses and adjust for exempt income.
3. Deduct any allowed tax losses carried forward (capped at 75% of current taxable income).
4. Subtract AED 375,000 to find the taxable slice.
5. Multiply the taxable slice by 9% to get tax payable.

If the result is negative, your tax is zero and the loss can carry forward, subject to the FTA rules.

Worked example 1: small trading LLC

A Dubai trading LLC has net profit of AED 600,000. Assume no adjustments and no carried losses.

• Taxable income: AED 600,000
• 0% band: AED 375,000 taxed at 0% = AED 0
• 9% band: AED 225,000 taxed at 9% = AED 20,250
• Total corporate tax: AED 20,250
• Effective rate: 3.38%

Worked example 2: mid-size services company

A consultancy reports net profit of AED 2,000,000. It has AED 50,000 of non-deductible fines and AED 100,000 of exempt dividend income from a qualifying shareholding.

• Net profit: AED 2,000,000
• Add back fines: +AED 50,000
• Deduct exempt dividends: -AED 100,000
• Taxable income: AED 1,950,000
• 0% on first AED 375,000 = AED 0
• 9% on AED 1,575,000 = AED 141,750
• Total corporate tax: AED 141,750

Worked example 3: business at the threshold

A startup reports taxable income of exactly AED 375,000. Tax payable is AED 0. The full amount sits inside the 0% band. The business must still register, keep records, and file a return.

Small business relief and the AED 3 million revenue test

Small Business Relief is a separate path. If your revenue is AED 3,000,000 or less for the current tax period and all prior tax periods ending on or before December 31, 2026, you can elect to be treated as having no taxable income. That means 0% tax for that period, regardless of profit.

This relief is an election, not automatic. You still must register for corporate tax, file a return, and tick the relief box. It is not available to QFZPs or members of multinational enterprise groups.

For a quick desk reference of these rules, see our UAE Corporate Tax Cheatsheet.

Free zone companies and the 9 percent rate

Free zone companies are not automatically exempt. To get the 0% QFZP rate on qualifying income, the company must meet substance requirements, derive qualifying income, maintain audited financial statements, and not elect to be subject to the standard regime.

Non-qualifying income earned by a QFZP is taxed at 9% with no AED 375,000 threshold on that slice. If a free zone company fails the QFZP test in any year, it is taxed under the standard 0% and 9% bands for five years.

What is qualifying income

Qualifying income generally includes transactions with other free zone persons and specified activities such as fund management, holding shares, manufacturing, and logistics. Income from mainland UAE customers or natural persons usually is not qualifying. Check the FTA guidance and Cabinet Decisions for the current list.

Domestic minimum top-up tax at 15 percent

From January 1, 2025, the UAE applies a 15% DMTT to large multinational enterprise groups with consolidated global revenue of EUR 750 million or more in at least two of the four prior financial years. This implements the OECD Pillar Two rules.

If your group is below that threshold, the 15% rate does not apply. You continue under the 0% and 9% system. If your group is above the threshold, the 15% effective rate floor overrides the 9% headline rate on UAE profits.

Filing and payment timing

Corporate tax returns are filed within 9 months after the end of the financial year. A company with a December 31, 2024 year end files by September 30, 2025. Payment is due on the same date as the return. There are no advance payments or installments under the current rules.

Plan your cash flow around the filing month. For dated milestones across the corporate tax and e-invoicing regimes, see our UAE Corporate Tax Deadline Calendar.

Records you must keep

Keep accounting records and supporting documents for at least 7 years from the end of the tax period. The FTA can request them at any time during that window. Records include invoices, contracts, transfer pricing files, and bank statements.

Common mistakes when applying the 9 percent rate

• Applying 9% to total profit instead of only the slice above AED 375,000.
• Forgetting to add back non-deductible items like fines, donations to non-approved bodies, and 50% of entertainment costs.
• Assuming free zone status gives automatic 0% tax without meeting QFZP conditions.
• Splitting a single business across multiple entities to multiply the AED 375,000 band. The FTA can challenge this.
• Ignoring related party and connected person transfer pricing documentation.
• Missing the 9 month filing window and triggering penalties.

Tools to run the numbers

For a deeper estimate that includes adjustments and loss carry forward, try our UAE Corporate Tax Liability Calculator. When you are ready to draft your submission, our UAE Corporate Tax Return Template walks through each section. For the end to end filing flow, see UAE Corporate Tax Filing.

Where to verify the official rules

Always confirm figures against the source. The primary references are the UAE Ministry of Finance and the UAE Federal Tax Authority. Cabinet Decisions and Ministerial Decisions issued under Federal Decree-Law 47 of 2022 set the technical detail.

If you need to align corporate tax data with the upcoming Peppol based e-invoicing model, the UAE Corporate Tax hub explains how the two regimes connect.

Want a clear quote for software that handles UAE e-invoicing and connects to your accounting system so your corporate tax data stays clean? Get UAE e-invoicing pricing and see how EInvoice Direct fits your finance stack.