Question 1

How is UAE Corporate Tax calculated on business profits?

Accepted Answer

UAE Corporate Tax is calculated at: 1) 0% on net taxable profit up to AED 375,000, and 2) 9% on net taxable profit exceeding AED 375,000. Small Business Relief (SBR) allows eligible resident businesses with annual revenue of AED 3 Million or less to elect for 0% corporate tax.

Question 2

What is Small Business Relief (SBR) in UAE Corporate Tax?

Accepted Answer

Under Ministerial Decision No. 73 of 2023, resident businesses with revenue below AED 3,000,000 (AED 3 Million) in a tax period can elect to be treated as having no taxable income, effectively paying 0% corporate tax for tax periods ending on or before 31 December 2026.

Question 3

Do freezone companies pay 0% corporate tax in the UAE?

Accepted Answer

Freezone companies classified as 'Qualifying Free Zone Persons' (QFZP) pay 0% Corporate Tax on qualifying income (such as transactions with other freezone entities, international trading, manufacturing, and logistics). Non-qualifying income is taxed at the standard 9% rate.

Tax Bracket / Category	Taxable Profit Threshold	Applicable Tax Rate
Small Business Relief (SBR)	Annual Revenue <= 3,000,000 AED	0% Tax Rate (Elective)
Standard First Tier	Net Taxable Profit up to 375,000 AED	0% Tax Rate
Standard Second Tier	Net Taxable Profit > 375,000 AED	9% Tax Rate
Qualifying Free Zone Person (QFZP)	Qualifying Freezone Revenue	0% Tax Rate
Multinational Enterprises (GloBE)	Global Consolidated Revenue > EUR 750M	15% Tax Rate

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