0% Corporate Tax in the UAE — a legal way to keep profits

Since June 1, 2023, the UAE has introduced Corporate Tax at a rate of 9%. However, not all companies are required to pay it: under certain conditions, a 0% rate applies. This is a key advantage of the UAE jurisdiction, allowing tax optimization and profit retention. MIRAD supports clients at every stage: from eligibility check to structuring that withstands tax audits.

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Who can apply the 0% rate?

Small Business Relief:
— annual revenue up to AED 3M;
— company registered in Mainland or Free Zone;
— not part of an international structure;
— not engaged in excluded activities (banking, insurance, real estate).
Relief valid until 2026.
Qualifying Free Zone Person (QFZP):
— licensed in an official Free Zone;
— income from international trade, services, export;
— substance: office, employees, expenses;
— IFRS reporting, ESR compliance.
Qualified income taxed at 0%, other income at 9%.

Important nuances of applying 0%

QFZP status must be confirmed annually.
If conditions are not met, the relief is revoked for 4 years.
Even with 0% tax, a declaration must be filed with the FTA.
ESR and IFRS are mandatory elements of substance confirmation.
The FTA actively checks transfer pricing and deal structures.

Comparison: 0% vs 9% Corporate Tax

Criteria	0% Corporate Tax	9% Corporate Tax
Applicability	Small Business Relief / QFZP	All other companies
Annual Revenue	Up to AED 3M / qualified income	Above AED 3M
Requirements	Substance, ESR, IFRS reporting	General tax declaration
Risks of non-compliance	Relief cancellation for 4 years	Fines and tax reassessments
Benefit	9% profit savings	Full tax burden

Want to keep 0% tax legally?

MIRAD helps Mainland and Free Zone companies obtain the 0% rate, build a substance-based structure, and protect against FTA risks.

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What MIRAD does

Audit of company structure and eligibility for 0%.
FTA registration and filing of notifications.
Preparation of IFRS reporting and income segregation.
Support for substance: employees, office, expenses.
Communication with the FTA during audits.
Setup of accounting and control systems.

HowTo: how to get the 0% Corporate Tax rate

Check eligibility under Small Business Relief or QFZP.
Register the company with the FTA and obtain a TRN.
Set up IFRS-based accounting and substance model.
Prepare ESR and financial reporting.
File the tax return indicating the 0% relief.
Renew confirmations annually.

FAQ: 0% Corporate Tax in the UAE

❓ Do I need to file a return if the rate is 0%?
✅ Yes. Filing is mandatory even with zero tax.

❓ What income qualifies for QFZP?
✅ International trade, exports, services to non-residents. Local income is often taxed at 9%.

❓ How long is Small Business Relief valid?
✅ Until 2026 inclusive, after which it may be reviewed.

❓ Can ESR and Corporate Tax benefits be combined?
✅ Yes, ESR is integrated into Corporate Tax and affects QFZP status.

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0% Corporate Tax Rate