0% Corporate Tax in UAE: What Small Businesses Need to Know?

Written By Akshaya Ashok, Reviewed By Nouphal P C

Published on 12/05/2025

Do you ever feel like you could do so much more with your hard-earned cash if it weren't for taxes? If you're running a small business right here in the UAE, you might be in for some seriously good news when it comes to UAE business tax!

The UAE has always been a cool place to set up Business, right? Great location, a real focus on helping small and medium-sized enterprises (SMEs) thrive. And now, they've introduced a tiered tax system that includes a fantastic 0% rate for those who qualify. Think of it as a real leg-up for your growth!

To give you the most accurate picture, it's important to know that the specifics of this 0% business tax threshold for small businesses were still being finalized and communicated by the UAE Federal Tax Authority (FTA). That means we can't give you exact figures right here.

Here's the lowdown on what the official UAE business tax guidelines for the 0% threshold should specify:

• The Official Definition of a "Small Business": The FTA will clearly define what constitutes a "small business" for business tax purposes in the UAE. This definition will likely include specific criteria. Keep an eye out for details on:
  • Revenue Threshold: A maximum annual revenue figure. This is the most likely key determinant.
  • Employee Count: Some definitions of SMEs also consider the number of employees.
  • Business Activity: Are certain sectors excluded from this 0% UAE business tax benefit?
  • Legal Structure: Does the legal form of your business (e.g., Sole Establishment, LLC) play a role in eligibility for the 0% business tax rate in the UAE?
• The Exact Revenue Limit for the 0% Tax: The official Corporate Tax Law and FTA guidance will state the precise annual taxable profit threshold that qualifies for the 0% business tax rate. Remember, this is about taxable profit, not just total revenue.
• Rules for Businesses in Free Zones: The interaction between the new UAE business tax regime and existing Free Zone regulations is crucial. Official information will clarify:
  • If Free Zone entities automatically qualify.
  • If they need to meet specific conditions.
  • If there are different thresholds or rules for Free Zone companies regarding tax.
• Definition of Taxable Profit: Understanding how taxable profit is calculated under business tax law is essential. This involves knowing what income is included and what deductions are allowed.
• Compliance Requirements (Even at 0%): Just because the tax rate might be 0%, there will still be compliance obligations under business tax, such as registration and filing. The FTA will outline these.
  
  

How to Find Accurate UAE Business Tax Information?

Instead of me giving you potentially incorrect figures, here's exactly where you need to go to get the reliable facts about  business tax:

• The Official Website of the UAE Federal Tax Authority (FTA): This is the primary source for all tax information. Look for sections specifically dedicated to Corporate Tax.
• The Official Corporate Tax Law: Review the full legal text of the Corporate Tax Law as published by the UAE government.
• FTA Guides and Clarifications: The FTA often releases detailed guides, FAQs, and clarifications on specific tax aspects. Look for these.
• Consult with reputable tax advisory firms in the UAE: They will have the most up-to-date and accurate understanding of the business tax regulations in the UAE.
  
  

Conclusion

While we cannot provide the specific figures and criteria for the 0% business tax threshold at this moment due to the need for reliance on official pronouncements, understanding the types of information you need and knowing where to find it is the most accurate and helpful approach. Head directly to the official sources mentioned above to get the precise details that apply to your business tax situation.

At Reyson Badger, we understand the intricacies of the business tax landscape and how it can directly impact your business objectives. Navigating these regulations while focusing on expansion can be complex.

Ready to capitalize on the favorable business tax environment and take your small business to the next level? Let us be your valued partner in attaining long-term growth. Contact us today for a consultation, and let's explore how our tailored Corporate tax Services can fuel your success in the UAE.

Written By

Akshaya Ashok

Akshaya Ashok is a content writer specializing in creating content focused on accounting and auditing. With over two years of experience, she has developed expertise in crafting professional content for the financial sector.