UAE Corporate Tax Exemptions
Not all businesses pay UAE Corporate Tax. Several categories of entity are either fully exempt or benefit from a 0% rate.
Fully Exempt Entities
These entities do not pay CT at all:
- UAE Government and government bodies — federal and emirate-level
- Extractive businesses — companies engaged in the extraction of UAE natural resources (oil, gas, minerals) subject to emirate-level taxation
- Qualifying public benefit entities — charities, foundations, and non-profit organisations that meet FTA criteria
- Qualifying investment funds — collective investment funds meeting specific conditions under CT Law
- Pension funds and social security funds established under UAE law
0% Rate for Qualifying Free Zone Persons (QFZPs)
Free zone companies that meet the QFZP conditions pay 0% on their qualifying income. This is not a full exemption — non-qualifying income is still taxed at 9%. QFZP conditions include:
- Adequate substance in the free zone (employees, operations, assets)
- Qualifying income from qualifying activities (list in CT Decision No. 55 of 2023)
- Audited financial statements
- No election into the standard CT regime
Small Business Relief (Not an Exemption — an Election)
Companies with revenue ≤ AED 3 million may elect Small Business Relief, resulting in nil taxable income for the period. This is an annual election, not an automatic exemption.
What Is Not Exempt
- UAE mainland companies (any size)
- Free zone companies that do not qualify as QFZPs
- Foreign companies with a UAE permanent establishment
- Individuals earning business income above AED 1 million
If you believe your business may qualify for an exemption or the QFZP 0% rate, Kounted can assess your eligibility and handle the necessary filings.