UAE Tax Rates, Allowances& Exemptions 2026.
A single-page reference for UAE Corporate Tax, VAT, Excise, Customs, Pillar Two / QDMTT, Transfer Pricing thresholds, withholding tax, visa thresholds, UK-UAE Double Tax Treaty rates, and the deadlines and penalties that go with them. Updated as rates change.
UAE Rates, Allowances & Exemptions in one paragraph. UAE Corporate Tax: 0% on first AED 375,000, 9% above (plus 15% QDMTT top-up for in-scope MNEs over EUR 750m). UAE VAT: 5% standard, 0% zero-rated, exempt; registration mandatory at AED 375,000 taxable turnover, voluntary from AED 187,500. Small Business Relief available on revenue up to AED 3m (sunset 31 Dec 2026). QFZP 0% on qualifying Free Zone income subject to 5-condition test. Excise: tobacco 100%, energy drinks 100%, sweetened drinks 50%. Natural persons in CT scope above AED 1m business revenue.
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1. UAE Corporate Tax
UAE Corporate Tax ("CT") was introduced by Federal Decree-Law No. 47 of 2022 and applies to financial years starting on or after 1 June 2023. Every UAE-resident juridical person is in scope, including dormant companies.
| Band | Threshold | Rate | Note |
|---|---|---|---|
| Standard — small profits | Taxable income up to AED 375,000 | 0% | Automatic, no election required |
| Standard — above threshold | Taxable income above AED 375,000 | 9% | Headline UAE CT rate |
| Pillar Two top-up (UAE QDMTT) | MNE groups above EUR 750m consolidated revenue, FYs starting 1 Jan 2025 onward | 15% | Effective rate on UAE in-scope profits after top-up; see §4 |
| QFZP qualifying income | Free Zone entities meeting the 5-condition test on qualifying income only | 0% | Non-qualifying income taxed at 9%; see §2 |
| Small Business Relief | Revenue up to AED 3m per tax period | 0% | Elected; tax periods ending on or before 31 Dec 2026; see §3 |
| Natural persons — business income | Business turnover above AED 1,000,000 per Gregorian year | 0% / 9% | Same AED 375k threshold applies; wages, personal investment income and real estate investment are outside scope |
| Qualifying investment fund / REIT distribution | Meeting FTA conditions in Cabinet Decision 81 of 2023 | 0% | Exempt person status; conditions tested annually |
| Extractive & non-extractive natural resource | Emirate-taxed activities | Exempt from federal CT | Taxed at Emirate level under existing concessions |
Source: Federal Decree-Law No. 47 of 2022; Ministerial Decision 73 of 2023 (SBR); Cabinet Decision 100 of 2023 (QFZP); Cabinet Decision 142 of 2024 (QDMTT).
Who is outside UAE Corporate Tax entirely
- Natural persons below the AED 1m annual business turnover threshold
- Government entities, government-controlled entities on their mandated activities, and sovereign investment vehicles meeting the exempt-person conditions
- Qualifying public benefit entities listed in the Cabinet Decision schedule
- Qualifying investment funds, pension funds and social security funds that pass the FTA conditions
- Personal investment income — dividends, capital gains, interest, royalties received by individuals in a personal capacity
- Wages & employment income — outside the scope of CT (there is no personal income tax)
- Personal real estate investment by natural persons, where the property is held in a personal capacity and not through a licence
Participation Exemption
Dividends and capital gains on a Participating Interest are exempt where:
- At least 5% ownership in the shares or capital of the participation,
- Minimum 12-month holding period (or intended), and
- The participation is subject to tax at 9% or more in its jurisdiction (or meets the alternative qualifying conditions in Article 23).
2. Qualifying Free Zone Person (QFZP)
A Qualifying Free Zone Person pays 0% CT on qualifying income and 9% on non-qualifying income, provided all five conditions in Cabinet Decision 100 of 2023 are met for the entire tax period.
| Condition | What it means |
|---|---|
| 1. Adequate substance | Core income-generating activities carried on in the Free Zone, with adequate staff, premises and OpEx |
| 2. Qualifying income | Income from the activities listed in Ministerial Decision 265 of 2023 — and derived from the right counterparties |
| 3. No election out | The QFZP has not elected to be subject to the standard 9% regime |
| 4. Arm’s length / TP compliance | Related-party transactions priced at arm’s length and TP documentation maintained |
| 5. Audited financial statements | IFRS financial statements audited by a UAE-licensed auditor, regardless of size |
De minimis rule
If non-qualifying revenue in a tax period exceeds the lower of:
- 5% of total revenue, or
- AED 5,000,000,
then QFZP status is lost for that tax period and the next four tax periods. The whole income of the Free Zone entity is then taxed at 9% (above AED 375k) for all five years — this is a cliff-edge rule, not a sliding adjustment.
We cover the condition-by-condition detail in the QFZP 5-condition test article.
3. Small Business Relief (SBR)
| Parameter | Value | Source |
|---|---|---|
| Revenue cap per tax period | AED 3,000,000 | Ministerial Decision 73 of 2023, Art 2 |
| Cumulative revenue test | Applies to the current tax period AND all previous tax periods | Same |
| Effect of election | Taxable income deemed nil for the tax period | Same |
| Sunset | Tax periods ending on or before 31 December 2026 | MD 73/2023, Art 2(3) |
| Not available to | Multinational Enterprise Group members (Pillar Two in-scope) and Qualifying Free Zone Persons | Art 3 |
| Tax losses carried forward | Suspended — cannot be used while SBR is elected | Art 2(2) |
4. Pillar Two / QDMTT
Under Cabinet Decision 142 of 2024, the UAE introduced the Domestic Minimum Top-up Tax (QDMTT) with effect from financial years starting on or after 1 January 2025. The regime implements the OECD GloBE rules into UAE law.
| Parameter | Value / Rule |
|---|---|
| Scope | Members of Multinational Enterprise Groups with consolidated revenue above EUR 750m in at least two of the preceding four fiscal years (OECD GloBE threshold) |
| Minimum effective tax rate | 15% |
| UAE QDMTT trigger | Where UAE jurisdictional effective tax rate is below 15%, UAE QDMTT applies to lift it to 15% on UAE in-scope income |
| Interaction with QFZP 0% | QFZP 0% is undisturbed on a standalone basis, but for in-scope MNE groups QDMTT re-captures the top-up at UAE level |
| Compliance | GloBE Information Return (GIR) and QDMTT return — filed with the FTA, timing to be confirmed in subsidiary legislation |
| IIR / UTPR | Not currently enacted in UAE domestic law — UAE operates QDMTT only, which is the GloBE primary rule for in-UAE top-up |
| Safe harbours | Transitional CbCR safe harbour available for FY 2024-2026 subject to conditions |
5. Value Added Tax (VAT)
VAT was introduced by Federal Decree-Law No. 8 of 2017 (replaced by Federal Decree-Law No. 18 of 2022). GCC-wide standard rate.
| Rate | Scope | Example supplies |
|---|---|---|
| 5% (standard) | Default rate on taxable supplies in the UAE | Most goods and services; retail, professional services, construction, hospitality |
| 0% (zero-rated) | Taxable but at 0% — input VAT recoverable | Exports outside GCC VAT territory, international transport, qualifying education, qualifying healthcare, residential property first supply (within 3 years of completion), investment-grade precious metals, international air passenger transport |
| Exempt | Not taxable — input VAT not recoverable | Local passenger transport, bare land, residential property leases, certain margin-based financial services |
| Out of scope | Transactions in Designated Zones treated as outside UAE for goods, subject to conditions | Designated Zones: JAFZA, DAFZA, DMCC, Al Hamra, DAFZ, Hamriyah, SAIF, Sharjah Airport Free Zone and others listed in Cabinet Decision |
VAT registration thresholds
| Type | Threshold (12-month rolling) | Note |
|---|---|---|
| Mandatory registration | AED 375,000 | Taxable supplies and imports; applies also to past 12 months and future 30 days |
| Voluntary registration | AED 187,500 | Taxable supplies, imports or taxable expenses |
| Tax group registration | Related entities under common control | Each member must be a legal person & UAE establishment |
| Deregistration (mandatory) | Below AED 187,500 for 12 consecutive months and no expectation of exceeding AED 375k in next 30 days | Within 20 business days of trigger |
6. Excise Tax & Customs Duty
Excise Tax (Federal Decree-Law No. 7 of 2017) applies to products deemed harmful to health or the environment.
| Excise product | Rate |
|---|---|
| Tobacco and tobacco products | 100% |
| Electronic smoking devices and tools | 100% |
| Liquids used in electronic smoking devices | 100% |
| Energy drinks | 100% |
| Carbonated drinks (excluding unflavoured aerated water) | 50% |
| Sweetened drinks (added sugar or sweeteners) | 50% |
Customs duty
| Category | Rate | Note |
|---|---|---|
| GCC Common Customs Tariff — standard | 5% | Applied on CIF value for goods entering the UAE from outside GCC |
| Tobacco products | 100% | Minimum specific duty may apply |
| Alcohol | 50% | Where importation is permitted |
| GCC origin goods | 0% | Duty-free under GCC Customs Union, subject to rules of origin |
| Free Zone import | 0% | No duty on import into a Free Zone; duty applies on movement to the UAE mainland |
7. Transfer Pricing
UAE TP rules are set out in Articles 34-36 of the CT Decree-Law and Ministerial Decision 97 of 2023, following the OECD TP Guidelines.
| Documentation | Trigger threshold | Note |
|---|---|---|
| Local File | Taxable Person is a Constituent Company of an MNE Group with consolidated revenue ≥ AED 3.15bn, or is a Taxable Person with revenue ≥ AED 200m in the tax period | MD 97/2023, Art 2 |
| Master File | Same two triggers as Local File | Same |
| Country-by-Country Report (CbCR) | UAE-parented MNE groups with consolidated revenue ≥ AED 3.15bn (EUR 750m-equivalent) | Cabinet Resolution 44 of 2020 |
| Related-party transactions schedule | Required within the CT return where aggregate related-party transactions exceed AED 40m, with any single category above AED 4m | FTA guidance |
| Connected persons schedule | Where payments / benefits to connected persons (directors, shareholders, their relatives) exceed AED 500k in the tax period | Same |
8. Withholding Tax
| Payment type (outbound) | UAE WHT | Note |
|---|---|---|
| Dividends | 0% | Article 45, Federal Decree-Law 47/2022 |
| Interest | 0% | Same |
| Royalties | 0% | Same |
| Services, management fees | 0% | Same |
9. UAE Tax Residence Certificate (TRC)
Issued by the FTA under Cabinet Decision 85 of 2022. Two parallel tests for individuals; one test for companies.
| Who | Test | Note |
|---|---|---|
| Individual — primary test | Physical presence in the UAE for 183 days or more in a 12-month period | Automatic qualification |
| Individual — secondary test | Physical presence 90 days or more AND a UAE national, UAE resident or GCC national, AND having a permanent place of residence in the UAE, AND carrying on employment or business in the UAE | Second-tier route for UAE residents who spend less time physically present |
| Individual — centre test | Having the usual or primary place of residence AND centre of financial and personal interests in the UAE | Third-tier route; fact-pattern test |
| Juridical person | Incorporated or formed in the UAE, or effectively managed and controlled in the UAE (POEM) | Different limbs apply for inbound DTT eligibility |
| TRC validity | 12 months from issue, specific to a defined financial year | Renewed annually |
| FTA fee | AED 500 (natural person) / AED 1,750 (legal person) application fee + AED 500 approval fee (approx) | Fees vary; confirm on EmaraTax at application time |
10. UK-UAE Double Tax Treaty (key rates)
The current UK-UAE DTT was signed 12 April 2016 and entered into force 25 December 2016. UK WHT rates on payments to UAE residents under the treaty:
| UK outbound to UAE resident | UK WHT under DTT | Condition |
|---|---|---|
| Dividends — qualifying direct holding | 0% | Beneficial owner is a company holding at least 10% of the capital for 365 days; or is a UAE Government body / sovereign wealth fund |
| Dividends — portfolio | 15% | Default DTT dividend article rate (UK charges no WHT on dividends domestically; relevant to future UK WHT regimes) |
| Interest — general | 0% | Beneficial ownership test; UK WHT on interest exists at 20% domestically subject to DTT reduction |
| Royalties | 0% | Beneficial ownership test; applies to copyright, patents, trademarks, know-how |
| Capital gains on immovable property | Taxable in situs country | Standard OECD-model allocation; UK NRCGT applies for UAE residents disposing of UK real estate |
| Capital gains on substantial participation | Taxable in situs country where >50% of value derives from UK immovable property | Anti-avoidance for property-rich companies |
| Pensions | Taxable in UK (state pension) / UAE (private pension subject to source rules) | Fact-dependent; always run alongside UK-UAE advisory |
| Dependent personal services | UAE resident taxed in UK on UK-source employment income unless 183-day rule and other conditions met | Standard Article 15 treaty position |
Source: UK-UAE Double Taxation Convention 2016. Treaty relief requires a valid UAE TRC for the relevant year and beneficial-ownership tests.
11. UAE Visa Thresholds
| Visa route | Threshold | Term |
|---|---|---|
| Golden Visa — property investor | Property worth at least AED 2,000,000 (ownership or off-plan with 50%+ paid) | 10 years, renewable |
| Golden Visa — business investor / entrepreneur | Business share worth at least AED 2m, licensed and audited, with tax commitments | 10 years |
| Golden Visa — specialists (doctors, scientists, engineers, PhDs, specialists) | Field-specific criteria; typically monthly salary AED 30,000+ plus formal qualifications | 10 years |
| Golden Visa — outstanding talent / culture / sports | Nomination-based | 10 years |
| Green Visa — skilled employee | Skill level 1, 2 or 3 under MoHRE classification; monthly salary at least AED 15,000 | 5 years |
| Green Visa — freelancer / self-employed | Freelance permit; annual income at least AED 360,000 for the last two years, or financial solvency | 5 years |
| Green Visa — investor / partner | Investment or partnership in a commercial activity meeting MoHRE criteria | 5 years |
| Standard employment residence visa | Employment contract; sponsored by employer | 2-3 years, renewable |
| Retirement visa (55+) | Monthly income AED 20,000 / savings AED 1m / property worth AED 1m | 5 years |
UAE visa criteria are set by the ICP and are periodically updated. Always confirm current criteria on ICP channels before building a plan around them.
12. Property-Related Fees
| Fee | Rate | Who pays |
|---|---|---|
| Dubai Land Department transfer fee | 4% | Of property value — split 4% buyer / 0% seller by DLD convention, often negotiated 50:50 |
| DLD admin fee | AED 580 | Flat |
| Agency commission | 2% | Of sale price, plus 5% VAT on the commission |
| Mortgage registration fee | 0.25% | Of loan amount, plus AED 290 admin |
| Oqood registration (off-plan) | 4% | Pre-handover transfer fee — same 4% rate |
| NOC fee (from developer) | AED 500 — AED 5,000 | Developer-specific |
| Service charges (annual) | AED 10 — AED 35 per sq ft | Development-specific; set via RERA Service Charge Index |
| Trustee office fee | AED 2,000 — AED 4,000 | Flat; depends on property value band |
| Ejari registration (annual rental) | AED 220 | Flat |
13. Payroll, Social Security & End of Service
| Item | Rate / Amount | Who |
|---|---|---|
| Personal income tax | 0% | No personal income tax in the UAE |
| Pension (UAE nationals) — employer contribution | 12.5% | Of monthly contribution salary; private sector |
| Pension (UAE nationals) — employee contribution | 5% | Private sector; higher in Abu Dhabi (12.5% / 5% + government) |
| Pension (UAE nationals) — government top-up | 2.5% | Federal government contribution |
| Pension (GCC nationals) | Home-country rates | GCC Protected Persons Agreement |
| Social security (expats) | None | No employer or employee contributions |
| End of Service Gratuity — first 5 years | 21 calendar days of basic salary per year | Expat employees under Federal Decree-Law 33 of 2021 |
| End of Service Gratuity — after 5 years | 30 calendar days of basic salary per subsequent year | Capped at 2 years’ total basic salary |
| DIFC Employee Workplace Savings (DEWS) | 5.83% / 8.33% | DIFC-registered employers — replaces EoS gratuity accrual |
| Unemployment insurance (ILOE) | AED 5 or AED 10 / month | Mandatory for most employees; low (≤AED 16k salary) or high band |
| Health insurance | Mandatory, employer-funded | Dubai & Abu Dhabi minimums vary by Emirate |
14. Free Zone Fees (Indicative)
Free Zone pricing changes regularly — the figures below are indicative starting points as at the update date. Always get a current quote from the specific Free Zone before deciding.
| Free Zone | License & registration (year 1, indicative) | Note |
|---|---|---|
| IFZA (International Free Zone Authority, Dubai) | From AED 12,500 | Flexi-desk included; competitive for SMEs |
| DMCC (Dubai Multi Commodities Centre) | From AED 20,000 — AED 35,000 | Depending on activity & office package |
| JAFZA (Jebel Ali Free Zone) | From AED 25,000 | Trading / logistics-focused |
| DAFZ (Dubai Airport Free Zone) | From AED 25,000 | Logistics, trade, light industrial |
| Meydan Free Zone | From AED 12,500 | Virtual office options |
| SHAMS (Sharjah Media City) | From AED 5,750 | Media & creative |
| SPC Free Zone (Sharjah Publishing City) | From AED 6,900 | Broad activity list |
| RAK Free Trade Zone | From AED 6,500 | Trading / general |
| DIFC (Dubai International Financial Centre) | From USD 12,000 (financial activity) + regulatory fees | Regulated financial services; DFSA licensing additional |
| ADGM (Abu Dhabi Global Market) | From USD 10,000 (financial activity) + regulatory fees | Common-law jurisdiction; FSRA licensing additional |
| Mainland DED (Dubai) | From AED 15,000 — AED 30,000 | Depends on activity; may require UAE national service agent or physical office |
Figures are indicative setup costs for a single-licence single-shareholder entity with the minimum qualifying office package. Multi-shareholder, multi-activity or office-upgrade packages are higher. We model the real total cost of ownership (not the brochure headline) under business setup & formation.
15. Deadlines & Penalties
| Obligation | Deadline | Penalty for breach |
|---|---|---|
| UAE CT registration | Per FTA Decision 3 of 2024 schedule, based on licence issuance month (3 or 7 months after month of issue, depending on when the licence was issued) | AED 10,000 flat (late registration) |
| UAE CT return filing | Within 9 months of the end of the relevant financial year | AED 500/month for first 12 months, AED 1,000/month thereafter; plus % of unpaid tax |
| UAE CT final payment | Same date as the return — 9 months after financial year end | 14% annual late-payment penalty on unpaid balance |
| VAT registration (mandatory) | Within 30 days of exceeding the AED 375k threshold | AED 10,000 flat |
| VAT return & payment | Within 28 days of the end of the tax period (monthly or quarterly, as assigned) | AED 1,000 first offence, AED 2,000 repeat within 24 months; plus % of unpaid tax |
| Record keeping | CT: 7 years. VAT: 5 years (15 years for real estate records). AML: 5 years | AED 10,000 first offence; AED 20,000 repeat |
| Economic Substance (ESR) | Where still applicable — notification 6 months and report 12 months after financial year end | AED 20,000-50,000 depending on offence |
| CbCR filing | Within 12 months of financial year end | AED 100,000 for failure to file; AED 50,000 for failure to notify |
| UBO disclosure | Changes within 15 days; annual confirmation at licence renewal | Up to AED 100,000 depending on offence |
| Trade licence renewal | Annually, before expiry date | Fines escalate; licence suspension after grace period |
Sources: Cabinet Decision 75 of 2023 and Cabinet Decision 10 of 2024 on administrative penalties; FTA Decision 3 of 2024 on CT registration deadlines. Penalties are revised periodically — this page is updated when they change.
Disclaimer
This reference page is a snapshot of the rates, thresholds and allowances in force as at the stated update date. It is written for general information only and is not personalised tax advice. UAE and GCC tax rules are evolving; penalties, subsidiary legislation and FTA guidance change through the year. Always confirm your position with a qualified adviser before acting on anything on this page. If you want us to confirm it, book a Discovery Call.
What to do with this
If you want to model your own position, our three live calculators are the quickest way in:
- UAE Corporate Tax Calculator — SBR vs QFZP vs 9% on your own numbers
- Free Zone vs Mainland Decision Tool — 8-question diagnostic
- UK SRT Day Counter — for the UK-side residence question for UK expats in UAE
For a scoped quote, book a Discovery Call — 20 free minutes, written fixed-fee quote within two business days.
Rest of the UAE Tax Cluster.
These five articles sit alongside the rate card and give the detail behind each table.
UAE Corporate Tax Explained: A 2026 Practical Guide
The 9% regime in plain English — scope, SBR, QFZP, first-return pitfalls.
15 min read →QFZP 5-Condition Test
How Free Zone companies qualify for 0% UAE CT — condition by condition.
8 min read →SBR vs QFZP: A Worked Example
Side-by-side modelling for a sub-AED 3m SME considering both routes.
7 min read →UAE CT Registration Pitfalls
Seven mistakes we see most often — the AED 10k penalty, timing, grouping.
6 min read →UAE CT First Return Walkthrough
Step-by-step through a first UAE CT return with HowTo schema.
7 min read →UAE Rates, Allowances & Exemptions 2026
The reference card — CT, VAT, Excise, Pillar Two, TP, DTT, visas, deadlines.
ReferenceUK Rates? On the UK Side.
Our UK sister firm The Tax Lead Limited maintains the UK equivalent of this reference card — UK Income Tax bands, NIC, UK CT main & marginal rates, UK CGT, UK IHT, SDLT, UK VAT, HMRC penalties and the full UK statutory allowance table. Same Chartered Tax Adviser working both sides.
Visit UK Rates & Allowances →Discovery Call First.Written Quote Within 2 Days.
This page tells you what the rates are. A Discovery Call tells you which ones apply to you, in what order, and what to do about them.