UAE corporate tax and VAT basics for founders
9% corporate tax above AED 375,000, 5% VAT, and what free zone companies should know. A plain-English starting point.
The UAE is still one of the most tax-efficient places to run a company, but tax now needs planning from day one.
Corporate tax
Corporate tax applies at 9% on taxable profit above AED 375,000, with 0% below that. Businesses generally need to register with the Federal Tax Authority, even if they owe nothing.
Free zone companies
Qualifying free zone persons can benefit from 0% on qualifying income, if they meet the conditions, including substance and keeping proper records. Income from mainland customers may be treated differently.
VAT
VAT is 5%. Registration is mandatory once taxable supplies pass the threshold set by the Federal Tax Authority, and voluntary below it.
Set up systems early
Use invoicing and payment systems that record VAT correctly from your first sale. It is far easier than fixing records later.
This is general information, not tax advice. Speak to a registered tax agent about your situation.
