UAE Corporate Tax Calculator
Calculate your potential tax liability based on annual net profit.
The United Arab Emirates (UAE) has historically been known as a tax-free haven for businesses. However, the financial landscape shifted significantly with the introduction of the Federal Decree-Law No. 47 of 2022. As of June 1, 2023, the UAE has implemented a standard Corporate Tax (CT) on business profits.
For business owners, CFOs, and investors, this transition brings a new challenge: accurate financial planning. Understanding exactly how much tax you owe is no longer optional—it is a legal necessity. This is where our UAE Corporate Tax Calculator becomes your most valuable digital asset.
In this guide, we will explore why you need this tool, how to use it effectively, and answer the most pressing questions regarding the new tax regime.
What is the UAE Corporate Tax Regime?
Before diving into the calculator, it is crucial to understand the logic behind the numbers. The UAE Corporate Tax is a form of direct tax levied on the net income (profit) of corporations and other businesses.
The Federal Tax Authority (FTA) has designed the system to be competitive and business-friendly, establishing one of the lowest corporate tax rates in the world.
The Key Tax Brackets:
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0% Tax Rate: Applies to taxable income up to AED 375,000. This is designed to support small businesses and startups.
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9% Tax Rate: Applies to taxable income exceeding AED 375,000.
Note: Large multinational corporations with global revenues exceeding EUR 750 million are subject to a different rate under the OECD Base Erosion and Profit Shifting (BEPS) framework, usually 15%.
Why You Need a UAE Corporate Tax Calculator
Navigating tax laws can be complex. While the “9% rate” sounds simple, applying it to your specific financial situation involves several variables. Here is why using an automated UAE Corporate Tax Calculator is essential for your business:
1. Instant Financial Clarity
Manual calculations can lead to errors, especially when you are trying to separate the exempt amount from the taxable amount. This tool gives you an instant estimate of your liability, allowing you to forecast your cash flow for the upcoming year accurately.
2. Strategic “Small Business Relief” Planning
The UAE offers “Small Business Relief” for entities with revenue below AED 3 million (subject to specific conditions). By inputting your projected profits, you can assess whether you are approaching thresholds that might change your tax status.
3. Error-Free Budgeting
Tax is an expense that must be accounted for in your P&L (Profit and Loss) statement. Using a reliable calculator ensures that you are setting aside the correct amount of capital, preventing liquidity issues when the tax deadline arrives.
4. Saves Time and Consultant Fees
While hiring a tax consultant is recommended for filing, you shouldn’t need to pay an expert just to get a rough estimate of your liability. This free tool empowers you to run your own preliminary numbers anytime.
Who Benefits from This Tool?
The UAE Corporate Tax applies to a wide range of entities. This calculator is specifically designed for:
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Mainland Companies: All businesses registered in the UAE mainland are subject to the new tax law.
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Freelancers: Individuals with a freelance license generating income over AED 1 million annually are considered to be conducting “Business or Business Activity” and may be subject to tax.
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Free Zone Persons: While many Free Zone entities benefit from 0% tax on “Qualifying Income,” they are still required to register and file. If they earn “Non-Qualifying Income,” the standard 9% rate applies, making this calculator vital for them as well.
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Foreign Entities: Foreign companies that have a “Permanent Establishment” in the UAE and earn income from within the country.
How to Use the UAE Corporate Tax Calculator
We have designed our tool to be user-friendly, responsive, and fast. You don’t need to be an accountant to use it. Follow these simple steps:
Step 1: Determine Your Net Profit
Corporate tax is charged on Net Profit, not total revenue (sales).
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Formula: Total Revenue – Total Deductible Expenses = Net Profit.
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Gather your financial statements to get this figure.
Step 2: Enter the Amount
Input your annual Net Profit figure into the calculator’s input field (in AED).
Step 3: Click “Calculate”
Hit the calculate button. The tool uses the built-in logic of the UAE tax law to process the numbers instantly.
Step 4: Analyze the Breakdown
The tool will display three key figures:
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Total Profit: The amount you entered.
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Tax-Free Allowance: It will automatically deduct the AED 375,000 exemption.
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Taxable Amount: The remaining profit that is subject to tax.
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Total Tax Payable: The final amount you owe (calculated at 9% of the Taxable Amount).
Example Calculation
Let’s look at a practical example to understand how the calculator works behind the scenes.
Scenario:
A marketing agency in Dubai Mainland generates a Net Profit of AED 500,000 in the financial year.
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Total Profit: AED 500,000.
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Exempt Amount: First AED 375,000 is taxed at 0%.
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Taxable Income: AED 500,000 – AED 375,000 = AED 125,000.
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Tax Calculation: 9% of AED 125,000.
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Final Tax to Pay: AED 11,250.
Without the calculator, a common mistake is to calculate 9% on the full 500k (which would be 45,000)—a massive difference!
Frequently Asked Questions (FAQ)
Here are the most common questions users have when using the UAE Corporate Tax Calculator.
1. Is my salary subject to Corporate Tax?
No. Wages and salaries earned by individuals in their capacity as employees are not subject to Corporate Tax. This tax is strictly for business profits.
2. Do Free Zone companies have to pay Corporate Tax?
It depends. Free Zone companies (Qualifying Free Zone Persons) can benefit from a 0% Corporate Tax rate on Qualifying Income. However, if they generate income from the mainland that is not “qualifying,” that specific income may be taxed at 9%. They must still register and file a return.
3. What expenses can I deduct before calculating tax?
You can deduct all “wholly and exclusively” incurred business expenses. This includes rent, salaries, software subscriptions, and marketing costs. However, entertainment expenses are only 50% deductible, and fines/penalties are not deductible at all.
4. Is there a deadline for registration?
Yes. The FTA has set deadlines based on the month your trade license was issued. Failing to register on time can result in an administrative penalty of AED 10,000. Check the FTA website for your specific deadline.
5. Does this tax apply to personal real estate investment?
Generally, no. Investment in real estate by individuals in their personal capacity is not subject to Corporate Tax, provided it is not considered a business activity requiring a license.
6. What is “Small Business Relief”?
If your business revenue (sales) is below AED 3 million for the relevant tax period (and previous periods ending by Dec 2026), you may elect to be treated as having no taxable income. This means you pay AED 0 tax, regardless of profit margins, but you must still file a tax return.
7. Can I pay the tax in installments?
Currently, the standard practice is to pay the corporate tax liability when filing the tax return, which is due within 9 months from the end of the relevant tax period.
Conclusion
The transition to a corporate tax environment marks a maturing of the UAE economy. While no business owner enjoys paying taxes, the rates are transparent and competitive.
Using a UAE Corporate Tax Calculator is the first step in ensuring your business remains compliant and financially healthy. Don’t wait until the filing deadline approaches—use the tool above to estimate your liability today and set aside the necessary funds.
