How the formula works
The statutory rule is short. Under Federal Decree-Law 47 of 2022, as applied by Cabinet Decision 116 of 2022, taxable income up to AED 375,000 is taxed at 0% and taxable income above AED 375,000 is taxed at 9%. The Ministry of Finance announcement and the u.ae corporate tax page both state the two rates. The calculator therefore does three things:
- Tax before relief = (taxable income minus AED 375,000, floored at zero) multiplied by 9%.
- Small Business Relief test = revenue this period at or below AED 3,000,000, and revenue in every previous period at or below AED 3,000,000, and not a Qualifying Free Zone Person, and a tax period ending on or before 31 December 2029. If it passes and you tick the election, tax due is nil for the period.
- Filing and payment deadline = period end plus nine months. Where the same day number does not exist in the target month, the deadline falls on the month end, so 31 December becomes 30 September. The seven month waiver date is worked out the same way.
Effective rate is tax due divided by taxable income. On AED 1,000,000 of taxable income that is AED 56,250, or 5.63%, because only the AED 625,000 above the band is taxed.
The two rates: 0% to AED 375,000 and 9% above
Corporate tax applies to financial years starting on or after 1 June 2023. The 0% band is not an exemption that disappears once you cross it: every taxable person keeps the first AED 375,000 at 0% and pays 9% only on the excess. Taxable income is the accounting net profit in your financial statements adjusted under the law, so if you enter raw accounting profit the result is indicative rather than final. Sources: Ministry of Finance, u.ae.
Small business relief: the AED 3 million test and the 2029 extension
Ministerial Decision 73 of 2023, announced on 6 April 2023, lets a resident taxable person elect to be treated as having no taxable income for a tax period when revenue is AED 3,000,000 or less in that period and in every previous tax period. The FTA conditions page adds three practical points: the election is made for each tax period, other exemptions, reliefs and deductions are not available while the relief applies, and the relief cannot be used by a Qualifying Free Zone Person or by a member of a multinational group with consolidated revenue above AED 3.15 billion. Once revenue exceeds the ceiling in any period the relief is lost for that period and every later one, which is why the calculator asks for your highest previous revenue.
The original decision applied to tax periods starting on or after 1 June 2023 and ending on or before 31 December 2026. Ministerial Decision 131 of 2026, issued on 29 July 2026 and listed on the Ministry of Finance legislation page, replaces that clause so the threshold now applies to tax periods that end on or before 31 December 2029. The AED 3,000,000 ceiling is unchanged. The National reported the extension on 7 August 2026. The calculator uses the 2029 date.
Filing and payment: nine months after the tax period ends
The FTA states that every taxable person must file the return and settle the tax payable within a maximum of nine months from the end of the relevant tax period (FTA, 14 September 2025). Payment and filing share one deadline, so a 31 December 2025 year end means both are due by 30 September 2026, and a 30 June 2026 year end means 30 March 2027. Businesses that elect Small Business Relief still file a return; the election is made in it.
Registration deadlines and the AED 10,000 late registration penalty
FTA Decision 3 of 2024, effective 1 March 2024, sets the registration timeline. Entities incorporated on or after 1 March 2024 must apply within three months of incorporation. Entities that already held a licence on 1 March 2024 had 2024 deadlines tied to the month their licence was issued, running from 31 May 2024 to 31 December 2024. Resident natural persons who exceed the turnover threshold register by 31 March of the following calendar year. Missing the deadline triggers an administrative penalty of AED 10,000 under Cabinet Decision 10 of 2024, applicable from 1 March 2024 (Ministry of Finance).
Late filing and late payment penalties
Cabinet Decision 75 of 2023, effective 1 August 2023, lists the administrative penalties. Two matter most for a small business:
- Failure to submit a tax return on time: AED 500 for each month or part month for the first twelve months, then AED 1,000 for each month from the thirteenth month.
- Failure to settle the tax payable: a monthly penalty of 14% per annum on the unsettled amount, counted from the day after the due date.
The optional months late field in the calculator shows these schedule amounts. They are the published figures, not an assessment; the FTA calculates the actual penalty.
The seven month first return waiver
The FTA waives the AED 10,000 late registration penalty, and refunds it as a credit where already paid, for a taxable person who files the first tax return or annual declaration within seven months of the end of the first tax period rather than the usual nine (FTA announcement). The calculator shows this earlier date next to the standard deadline. It applies to the first tax period only.
Worked examples
Example 1: revenue above the ceiling
A Dubai trading company has revenue of AED 5,000,000 and taxable income of AED 1,000,000 for the year to 31 December 2025. Small Business Relief is not available. Tax = (1,000,000 minus 375,000) multiplied by 9% = AED 56,250. Effective rate 5.63%. Return and payment due by 30 September 2026; the first period waiver date is 31 July 2026.
Example 2: revenue under the ceiling every period
A consultancy has revenue of AED 2,400,000 in the current period and has never exceeded AED 3,000,000. It elects Small Business Relief in its return and is treated as having no taxable income, so tax due is nil, even if its accounting profit is AED 600,000 (which would otherwise attract AED 20,250).
Example 3: the ceiling was crossed last year
Revenue was AED 3,200,000 in the previous period and AED 1,000,000 this period. The relief is not available because the test covers all previous periods. Tax is charged on this period's taxable income at the two rates.
Assumptions and exclusions
- The calculator assumes a resident taxable person with a tax period that started on or after 1 June 2023 and that is not part of a multinational group above the AED 3.15 billion consolidated revenue test.
- Qualifying Free Zone Person status and the 0% rate on qualifying income are not modelled. Ticking the free zone box turns the relief test off and asks you to seek advice.
- The top-up tax on large multinational enterprises under Cabinet Decision 142 of 2024 (listed on the Ministry of Finance legislation page) is out of scope.
- Tax losses, group relief, transfer pricing, exempt income, interest limitation and foreign tax credits are not modelled. A negative taxable income simply produces no tax.
- The AED 3,000,000 ceiling is applied per tax period without pro-rating for short periods, matching the wording of the decision.
- Penalty figures are the schedule amounts in Cabinet Decision 75 of 2023 and its amendments. The FTA issues the actual assessment.
Where Axion Finance fits
The revenue figure in the relief test and the profit figure behind taxable income both come from your accounts, so they are only as clean as your ledger. In the Axion Finance box, every invoice and bill posts to the general ledger as it happens, so period revenue and net profit can be read from the ledger rather than rebuilt from spreadsheets at year end. Payroll costs from the People box land in the same set of numbers. Axion does not file your corporate tax return or connect to the FTA portal; it gives you the figures to put in it. See pricing for how boxes are bought, or the FAQ for what the platform covers.
Related guides: the UAE VAT compliance guide for SMEs covers the other federal tax you will be filing, and the UAE e-invoicing guide for SMEs explains what is coming for invoice data. You can also try the UAE VAT calculator for output and input tax on a single supply.
Frequently asked questions
What is the UAE corporate tax rate?
Corporate tax is 0% on taxable income up to AED 375,000 and 9% on taxable income above that. It applies to financial years starting on or after 1 June 2023. The AED 375,000 threshold is set by Cabinet Decision 116 of 2022.
Who can claim Small Business Relief?
A resident taxable person whose revenue is AED 3,000,000 or less in the current tax period and in every previous tax period can elect, in each tax period, to be treated as having no taxable income. The relief is not available to Qualifying Free Zone Persons or to members of multinational groups with consolidated revenue above AED 3.15 billion. Ministerial Decision 131 of 2026 extends it to tax periods ending on or before 31 December 2029.
When is the UAE corporate tax return due?
The return must be filed and the tax paid within nine months of the end of the tax period. A tax period ending 31 December 2025 is due by 30 September 2026. A period ending 31 March 2026 is due by 31 December 2026.
What is the penalty for registering late?
Late registration carries an administrative penalty of AED 10,000 under Cabinet Decision 10 of 2024, applicable from 1 March 2024. The FTA waives or refunds it when the first tax return or annual declaration is filed within seven months of the end of the first tax period.
Is taxable income the same as accounting profit?
No. Taxable income starts from the accounting net profit in your financial statements and applies the adjustments in the corporate tax law. If you only have accounting profit, enter it for a rough estimate and treat the result as indicative.
Does the calculator handle free zone companies or the top-up tax on multinationals?
No. Qualifying Free Zone Person status, the 0% rate on qualifying income, and the top-up tax on large multinational enterprises under Cabinet Decision 142 of 2024 are outside this tool. Ticking the free zone box only switches the relief test off and asks you to seek advice.
Sources
- Ministry of Finance, announcement of the introduction of corporate tax (0% to AED 375,000, 9% above)
- u.ae, corporate tax (CT): 0% on taxable income up to AED 375,000 and 9% above
- Ministry of Finance, Ministerial Decision 73 of 2023 on Small Business Relief (announced 6 April 2023)
- Federal Tax Authority, Small Business Relief conditions
- Ministry of Finance, Ministerial Decision 131 of 2026 amending MD 73 of 2023 (issued 29 July 2026, PDF)
- Ministry of Finance, financial legislation index listing MD 131 of 2026
- The National, UAE extends corporate tax relief for small businesses until 2029 (7 August 2026)
- Federal Tax Authority, returns and payment within nine months of the tax period end (14 September 2025)
- Federal Tax Authority, Decision 3 of 2024 on the registration timeline (PDF)
- Ministry of Finance, AED 10,000 penalty for late corporate tax registration
- Ministry of Finance, Cabinet Decision 75 of 2023 and its amendments on administrative penalties (PDF)
- Federal Tax Authority, waiver of the late registration penalty when the first return is filed within seven months
This calculator gives an estimate from the published rates and thresholds. It is not tax, accounting or legal advice, and it does not replace the return you file with the Federal Tax Authority. Confirm your position with a registered tax agent before relying on a figure. Checked against the sources above on 4 September 2026.