UAE Corporate Tax for Freelancers & Small Businesses
Understand the AED 375,000 Corporate Tax rate threshold, the AED 1 million natural-person turnover test, and the temporary Small Business Relief rules applicable to qualifying Tax Periods ending on or before 31 December 2026.
Important: Small Business Relief is a statutory relief with eligibility conditions. It is not a blanket permanent “small business tax exemption”.
The three UAE rules you must not confuse
AED 375,000 Taxable Income threshold
The standard Corporate Tax rate is 0% on the portion of Taxable Income up to AED 375,000 and 9% on the portion above AED 375,000.
AED 1 million natural-person test
A natural person conducting Business or Business Activity becomes subject to Corporate Tax when total business turnover exceeds AED 1 million in a Gregorian calendar year.
AED 3 million SBR threshold
For 2026, qualifying Resident Persons can elect for SBR only when the current and relevant previous-period revenue test is satisfied and the other statutory conditions are met.
UAE Corporate Tax & SBR Evaluator
This calculator is an educational estimate. It is deliberately designed to separate the natural-person AED 1 million turnover rule from the Corporate Tax rate threshold and the temporary 2026 SBR eligibility rules.
Small Business Relief checks
Small Business Relief appears available for this scenario
The selections satisfy the core 2026 SBR conditions represented by this calculator: Resident Person status, the AED 3,000,000 current-and-previous-period revenue test, no listed SBR exclusion, and a Tax Period ending on or before 31 December 2026.
SBR treats the taxpayer as not having derived Taxable Income for the elected Tax Period. Other reliefs, deductions and loss/interest carry-forward consequences can apply, so the election should be considered carefully.
UAE Corporate Tax rate and relief comparison
| Rule | Threshold / condition | Result |
|---|---|---|
| Standard 0% rate band | Taxable Income up to and including AED 375,000 | 0% on that portion |
| Standard 9% rate band | Taxable Income exceeding AED 375,000 | 9% on the excess portion |
| Natural person Corporate Tax scope | Business or Business Activity turnover exceeding AED 1,000,000 in a Gregorian calendar year | Corporate Tax can apply |
| Small Business Relief | Revenue not exceeding AED 3,000,000 in the relevant and previous Tax Periods, subject to all statutory conditions | 0 Taxable Income under elected SBR |
Why the AED 3 million SBR test is more complicated than it looks
Current and previous Tax Periods matter
A business does not become SBR-eligible simply because its current-period revenue has fallen below AED 3,000,000. If its revenue exceeded AED 3,000,000 in a relevant or previous Tax Period, the statutory election is unavailable.
SBR is not available to every Free Zone business
A Qualifying Free Zone Person cannot elect for Small Business Relief merely because its revenue is below AED 3,000,000. Free Zone status therefore needs to be distinguished from Qualifying Free Zone Person status.
Multinational group exclusion
A Constituent Company of a Multinational Enterprises Group, as defined in the relevant legislation, is excluded from the SBR election.
The 2026 sunset matters
Ministerial Decision No. 73 of 2023 limits the AED 3,000,000 SBR threshold to subsequent Tax Periods ending on or before 31 December 2026. Do not carry the rule forward as a permanent 2027 exemption.
Freelancers and natural persons: the AED 1 million rule
Freelancers are not subject to Corporate Tax simply because they are individuals or because they have business expenses. For a natural person, the relevant scope test is whether total turnover from Business or Business Activities conducted in the UAE exceeds AED 1 million in a Gregorian calendar year.
The FTA specifically distinguishes Business or Business Activity income from salary, personal investment income and real-estate investment income that falls outside the business rules. The AED 1 million threshold should therefore not be described as a general “personal income” threshold.
| Natural-person situation | Corporate Tax scope |
|---|---|
| Business turnover does not exceed AED 1,000,000 in the Gregorian calendar year | The natural person is not subject to Corporate Tax on the basis of that business-turnover threshold. |
| Business turnover exceeds AED 1,000,000 in the Gregorian calendar year | The natural person is within Corporate Tax scope for the relevant Business or Business Activities and must comply with the applicable CT rules. |
| Salary or qualifying personal investment income | These are not counted as Business or Business Activity turnover for this natural-person threshold. |
Small Business Relief consequences to consider
Election is period-specific
SBR is elected for the relevant Tax Period. It should not be treated as a permanent status attached to a business.
Loss carry-forward consequences
A Tax Period in which SBR is elected has specific rules preventing Tax Losses incurred in that period from being carried forward into later periods.
Interest deduction consequences
Net Interest Expenditure incurred in an SBR period has specific carry-forward restrictions under Ministerial Decision No. 73 of 2023.
Corporate Tax filing and payment timeline
Register when legally required
Taxable Persons must obtain a Corporate Tax registration number when required by the Corporate Tax Law and its implementing decisions. Natural persons have a specific AED 1 million turnover threshold.
File within nine months
The FTA states that Corporate Tax Returns generally must be filed no later than nine months from the end of the relevant Tax Period.
Settle tax within the same legal window
Corporate Tax payable is generally due within nine months from the end of the relevant Tax Period, subject to any specific FTA-directed deadline.
Frequently Asked Questions
International Money Transfer & FX Rates
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Official UAE tax resources
Official rules and implementing decisions can change. For a live filing or election, use the current FTA material and applicable UAE legislation rather than relying only on a third-party summary.
Key 2026 numbers
| 0% rate band | AED 375,000 |
| 9% rate | Above AED 375,000 |
| Natural-person CT threshold | AED 1,000,000 turnover |
| SBR revenue threshold | AED 3,000,000 |
| SBR threshold end date | 31 Dec 2026 |
| General CT return/payment period | Within 9 months |
Important legal notes
- The AED 375,000 threshold is a Taxable Income rate threshold, not a gross-revenue exemption.
- Small Business Relief is an election with statutory conditions, not a universal entitlement for every business below AED 3 million.
- Qualifying Free Zone Persons and Constituent Companies of Multinational Enterprises Groups are excluded from SBR.
- Artificial separation of businesses to obtain a Corporate Tax advantage can have anti-abuse consequences.
- A natural person has a separate AED 1 million annual Business or Business Activity turnover threshold for Corporate Tax scope.