The UAE introduced a federal corporate tax for financial years starting on or after 1 June 2023. For most small businesses the rate is 9% on taxable profit above AED 375,000, with 0% below. Freelancers and sole establishments are only in scope once their business turnover passes AED 1 million in a calendar year. This calculator checks whether you're in scope and works out the tax. Rules checked September 2026.
Figures checked against UAE Corporate Tax Law (Federal Decree-Law No. 47 of 2022) and Federal Tax Authority guidance. Prices and rules change, so confirm with the official source before relying on them.
How it works
Individuals running a business in their own name, including freelancers with a freelance permit, are subject to corporate tax only when their business turnover exceeds AED 1 million in a calendar year. Salary, personal investments and property rental held personally are not business income for this test.
Once in scope, taxable income is broadly accounting profit after deductible expenses. The first AED 375,000 is taxed at 0% and everything above at 9%, so on AED 800,000 of profit the tax is 9% × AED 425,000 = AED 38,250.
Small Business Relief lets resident businesses with revenue of AED 3 million or less treat their taxable income as nil. It's an election, not automatic: you still register and file a simplified return, and it's available for tax periods ending on or before 31 December 2029, after the Ministry of Finance extended it from 2026.
Free-zone companies may pay 0% on qualifying income if they meet strict conditions, which this calculator doesn't model. VAT is separate: registration is required once taxable supplies pass the VAT threshold, whatever your corporate tax position.
A worked example
A freelance consultant with AED 1,500,000 of turnover and AED 700,000 of expenses has AED 800,000 of profit. Turnover is over AED 1 million, so corporate tax applies: 9% of the AED 425,000 above the threshold is AED 38,250, an effective 4.78% on profit. Electing Small Business Relief would bring the tax to zero.
Questions people ask
Do freelancers pay corporate tax in the UAE?
Only if their business turnover exceeds AED 1 million in a calendar year. Below that, freelance income isn't subject to corporate tax and no corporate tax registration is needed for it.
What is the UAE corporate tax rate?
0% on taxable income up to AED 375,000 and 9% on the amount above. Large multinational groups can face other rules, but those don't apply to freelancers or typical small businesses.
What is Small Business Relief?
An election that treats taxable income as nil for resident businesses with revenue of AED 3 million or less in the tax period and all previous periods. It's available for tax periods ending by 31 December 2029 (extended from 2026 by Ministerial Decision No. 131 of 2026), and you still have to register and file.
Is salary taxed in the UAE?
No. Employment income isn't subject to personal income tax or corporate tax in the UAE. Corporate tax applies to business income.
Is corporate tax the same as VAT?
No. VAT is 5% on most goods and services and has its own registration threshold. A business can be below the corporate tax thresholds and still need to charge VAT, or the other way round.
Guides
- Do Freelancers Pay Corporate Tax in the UAE? The AED 1 Million TestUAE corporate tax only reaches freelancers once business turnover passes AED 1 million a year, and then only profit above AED 375,000 is taxed at 9%. Here's how to check.
- Do You Get Gratuity If You Resign in the UAE? The 2026 RulesUnder the UAE's current Labour Law, resigning no longer cuts your end-of-service gratuity. Here's how it's calculated, what counts as basic salary, and when it's paid.