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UAE Clarifies 2026 Corporate Tax Rules for Mainland and Free Zone Firms

Mainland UAE companies are subject to a 0% tax rate on taxable profits up to AED 375,000 and 9% thereafter, while Qualifying Free Zone Persons face different rules. Free zone entities receive a 0% rate on qualifying income, but non-qualifying revenue is taxed at 9% without the AED 375,000 threshold. Companies with financial years ending December 31, 2025, must submit returns and pay tax by September 30, 2026.

Published Source: Arabian Business
Issuing authority
Federal Tax Authority
Jurisdiction
United Arab Emirates
Stage
Final rule
Low-angle upward view of modern urban skyscrapers against a clear blue sky

UAE businesses operating under mainland and free zone frameworks face distinct Corporate Tax obligations in 2026, according to a report by Arabian Business citing Federal Tax Authority regulations.

Mainland companies pay a 0% corporate tax rate on taxable profits up to AED 375,000, with income above that threshold taxed at 9%. In contrast, Qualifying Free Zone Persons are entitled to a 0% rate exclusively on Qualifying Income. Any non-qualifying income earned by such entities is taxed at 9% without access to the AED 375,000 nil-rate band.

Federal Tax Authority regulations also specify that Qualifying Free Zone Persons are ineligible to elect for Small Business Relief.

Entities whose financial year concluded on December 31, 2025, face a deadline of September 30, 2026, to file their corporate tax returns and settle their tax liabilities.

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