UAE 9% Corporate Tax & Free Zone 0% QFZP Rules: AED 375,000 Threshold & Small Business Relief
UAE Corporate Tax Brackets Under Federal Decree-Law No. 47 of 2022
Effective for financial years starting on or after 1 June 2023, the United Arab Emirates levies federal Corporate Tax (CT) across both Mainland and Free Zone entities:
| Taxpayer Category | Taxable Income Bracket | UAE Corporate Tax Rate |
|---|---|---|
| Resident Natural or Juridical Person (Mainland) | Up to AED 375,000 | 0% |
| Resident Natural or Juridical Person (Mainland) | Portion exceeding AED 375,000 | 9% |
| Qualifying Free Zone Person (QFZP) | Qualifying Income | 0% |
| Qualifying Free Zone Person (QFZP) | Non-Qualifying Income (above de minimis) | 9% |
Small Business Relief (Article 21): Revenue Up to AED 3,000,000
Under Article 21 of the Corporate Tax Law and Ministerial Decision No. 73 of 2023, a resident taxable person whose gross revenue does not exceed AED 3,000,000 in the relevant tax period and all previous tax periods (for periods ending on or before 31 December 2026) may elect Small Business Relief and be treated as having derived no taxable income for that period.
How Free Zone Companies Keep the 0% QFZP Rate
Holding a Free Zone license (such as DMCC, DIFC, ADGM, JAFZA, IFZA, or RAKEZ) does not automatically exempt a company from the 9% Corporate Tax. To qualify as a Qualifying Free Zone Person (QFZP) under Article 18:
- Adequate Substance in the UAE: Maintain core income-generating activities, employees, and operating expenditure inside the Free Zone.
- Qualifying Income: Derive income from transactions with other Free Zone persons (where the other Free Zone person is the beneficial recipient) or from listed Qualifying Activities (manufacturing, processing, holding of shares, logistics, headquarters services, treasury, aircraft financing, distribution in or from a Designated Zone).
- De Minimis Rule: Non-qualifying revenue must not exceed the lower of 5% of total revenue or AED 5,000,000.
- Audited Financial Statements: All QFZPs must prepare audited financial statements under Ministerial Decision No. 82 of 2023.
Doklad.ai UAE lets you tag every invoice as Qualifying vs Non-Qualifying Revenue so your de minimis ratio is tracked automatically before year-end.