A mainland company in the UAE pays 9% corporate tax on the slice of its taxable income above AED 375,000 and 0% on the first AED 375,000 — the calculation runs through four steps: accounting profit, tax adjustments, the rate band, and payment, with the return due within nine months of your financial year-end (Federal Decree-Law No. 47 of 2022, Articles 8 and 53). Those four steps are everything a mainland company needs for the 2026 tax year.
Step 1: Start with accounting profit
Your corporate tax return starts from the profit in your financial statements, prepared under IFRS or IFRS for SMEs. Companies with revenue above AED 50 million and Qualifying Free Zone Persons must file audited financial statements (Ministerial Decision No. 125 of 2023); other mainland companies can file from IFRS-based accounts, but every figure in the return must trace back to them.
Step 2: Apply the tax adjustments
- Add back non-deductible costs: fines and penalties, and 50% of entertainment expenditure.
- Deduct exempt income: dividends and gains from qualifying shareholdings under the participation exemption.
- Deduct carried-forward tax losses, capped at 60% of the year's taxable income.
- Apply the general interest deduction limitation (30% of EBITDA) where the company carries related-party or third-party debt.
Expenses are deductible when incurred wholly and exclusively for the business (Article 32 of the Corporate Tax Law).
Step 3: Apply the rate bands
| Taxable income | Rate | What it means |
|---|---|---|
| AED 0 – 375,000 | 0% | No tax on the first band |
| Above AED 375,000 | 9% | 9% on the portion above AED 375,000 |
Worked example for a 2026 financial year: accounting profit AED 900,000, add-backs AED 25,000, exempt dividend income AED 50,000. Taxable income = AED 875,000. Corporate tax = 9% × (875,000 − 375,000) = AED 45,000.
Step 4: Register, file and pay
- Registration: companies incorporated on or after 1 March 2024 must register within three months of incorporation; earlier companies worked to a licence-month deadline table (FTA Decision No. 3 of 2024).
- Filing: within nine months of financial year-end (Article 53). A 31 December 2026 year-end is due by 30 September 2027.
- Penalties: AED 10,000 for late registration; AED 500 per month for the first 12 months and AED 1,000 per month thereafter for a late return; 14% per year on unpaid tax (Cabinet Decision No. 75 of 2023, as amended).
- Records: keep accounting and tax records for seven years from the end of the tax period (Article 55).
Mainland vs free zone at a glance
| Question | Mainland company | Free zone (QFZP route) |
|---|---|---|
| Rate | 0% / 9% bands | 0% on qualifying income, 9% otherwise |
| Audited financial statements | Required if revenue exceeds AED 50 million | Always required for QFZP status |
| Small Business Relief | Available if revenue does not exceed AED 3 million (tax periods ending on or before 31 December 2026) | Available on the same revenue test |
| Key risk | Missing the registration or filing deadline | Breaking a QFZP condition |
Small Business Relief is elected per tax period and, as currently legislated (Cabinet Decision No. 73 of 2023), is available for tax periods ending on or before 31 December 2026 — confirm with the Ministry of Finance whether any extension applies to your period before relying on it.
Decision checklist for 2026
- Confirm your registration deadline under FTA Decision No. 3 of 2024 — the AED 10,000 late-registration penalty is the cheapest mistake to avoid.
- Fix your financial year-end and diary the nine-month filing date.
- Test Small Business Relief eligibility if revenue sits near AED 3 million.
- Decide whether an audit is required (revenue above AED 50 million).
- Build the adjustment schedule before preparing the return.
FAQ
Does a mainland company pay 9% on its whole profit once it passes AED 375,000? No — the 9% rate applies to the portion of taxable income above AED 375,000; the first AED 375,000 stays at 0%.
When is the corporate tax return for a 2026 financial year due? Nine months after financial year-end: a 31 December 2026 year-end is due by 30 September 2027.
Do mainland companies qualify for Small Business Relief? Yes, where revenue does not exceed AED 3 million in the relevant tax period and the period ends on or before 31 December 2026.
Finanshels provides bookkeeping services and audit services for mainland companies — see also how to file corporate tax returns in the UAE, how to calculate corporate tax for free zone companies and preparing financial statements for corporate tax filing.
