UAE tax system guide 2026: corporate tax, VAT, excise and e-invoicing

The UAE has no personal income tax on salaries, but businesses deal with corporate tax at 9% above AED 375,000 of taxable income, VAT at 5% and excise tax on certain goods. Large multinational groups also face a 15% Domestic Minimum Top-up Tax, and e-invoicing goes live in phases from January 2027. This guide sets out each tax, who it applies to and the deadlines that matter in 2026 and 2027.

Key points

• Corporate tax: 0% up to AED 375,000 of taxable income, 9% above.
• VAT: 5% standard rate, mandatory registration above AED 375,000 of taxable supplies.
• Excise tax: 50% or 100% on specific goods, with a tiered sugar-based model for sweetened drinks from 2026.
• No personal income tax on employment, personal investments or personal property income.
• E-invoicing: AED 50 million+ businesses go live 1 January 2027, others 1 July 2027 (per current MoF guidance).

The UAE tax system at a glance

Tax	Rate	Who it applies to
Corporate tax	0% up to AED 375,000, 9% above	Companies, and individuals with business turnover above AED 1 million
Corporate tax for Qualifying Free Zone Persons	0% on qualifying income, 9% on non-qualifying income	Free zone companies meeting the conditions
Domestic Minimum Top-up Tax (DMTT)	Top-up to a 15% effective rate	Multinational groups with revenue of €750 million or more
VAT	5% (some supplies zero-rated or exempt)	Businesses with taxable supplies above AED 375,000
Excise tax	50% or 100%; tiered model for sweetened drinks	Importers, producers and stockpilers of excise goods
Customs duty	Generally 5% on imports	Importers
Personal income tax	None	Not applicable

The Ministry of Finance (MoF) sets policy. The Federal Tax Authority (FTA) runs registration, returns and audits, mostly through the EmaraTax portal.

Corporate tax

Corporate tax applies to financial years starting on or after 1 June 2023.

• Rates: 0% on taxable income up to AED 375,000 and 9% above.
• Who registers: every resident company, including free zone companies and companies with no revenue. Individuals register when business turnover passes AED 1 million in a calendar year.
• Registration deadline: within 3 months of incorporation for companies incorporated from 1 March 2024. Late registration costs AED 10,000.
• Returns: one return per tax period, filed with any payment within 9 months of the period end.
• Small Business Relief (SBR): businesses with revenue of AED 3 million or less in the current and all previous periods can elect to be treated as having no taxable income. Ministerial Decision No. 131 of 2026 extended SBR to tax periods ending on or before 31 December 2029. A return is still required.
• Free zones: Qualifying Free Zone Persons (QFZPs) need adequate substance, audited financial statements, transfer pricing compliance and must meet the de minimis rule (non-qualifying revenue no more than 5% of total revenue or AED 5 million, whichever is lower).
• Audited accounts: required for QFZPs and for taxable persons with revenue above AED 50 million.

See our corporate tax services for registration, returns and SBR.

Domestic Minimum Top-up Tax

The DMTT applies to multinational enterprise groups with consolidated revenue of €750 million or more, for financial years starting on or after 1 January 2025. It tops up the group's effective tax rate in the UAE to 15%. Most SMEs are not affected.

VAT

VAT has applied since 2018.

• Rate: 5% standard rate. Some supplies are zero-rated (such as exports and international transport) and some are exempt (such as certain financial services, local passenger transport and bare land).
• Registration: mandatory when taxable supplies and imports exceed AED 375,000 over the past 12 months or are expected to in the next 30 days. Voluntary from AED 187,500. Late registration costs AED 10,000.
• Returns: usually quarterly, due by the 28th day after the period ends.
• Deregistration: apply within 20 business days of becoming eligible. A fixed penalty applies if you are late.

What changed in 2026

• From 1 January 2026, a 5-year limit applies to refunds of excess input tax. Older balances can be claimed until 31 December 2026.
• Self-invoicing under the reverse charge is no longer required.
• The FTA can look back up to 15 years in cases of evasion or non-registration.
• From 14 April 2026, Cabinet Decision No. 129 of 2025 changed VAT and excise penalties. Late payment is now charged at 14% a year, calculated monthly, and voluntary disclosure penalties fell to around 1% per month of the tax difference.

See our VAT services.

Excise tax

Excise tax applies to goods considered harmful to health:

• 100%: tobacco products, energy drinks, and electronic smoking devices and liquids.
• 50%: carbonated drinks.
• Sweetened drinks: from 1 January 2026, a tiered model based on sugar content replaced the previous flat approach.

Importers, producers and stockpilers of excise goods must register. Returns are filed monthly. See our excise tax service.

E-invoicing

Under Ministerial Decisions No. 243 and No. 244 of 2025, B2B and B2G invoices move to a structured, Peppol-based system. Each business appoints an Accredited Service Provider (ASP), and invoice data is reported to the FTA close to real time. The dates below are per current MoF guidance; check for updates. See our e-invoicing service.

Key deadlines

Obligation	Deadline
Corporate tax registration, new company	3 months from incorporation
Corporate tax registration, individual	31 March after the year turnover passes AED 1 million
Corporate tax return and payment	9 months after the tax period ends (30 September 2026 for a 2025 calendar year)
VAT return and payment	28th day after the end of the VAT period
VAT deregistration	20 business days after becoming eligible
Excise tax return	Monthly
Claim VAT credits older than five years	31 December 2026
E-invoicing, revenue AED 50 million or more	ASP appointment was due by 30 October 2026; go live 1 January 2027
E-invoicing, revenue below AED 50 million	Appoint ASP by 31 March 2027; go live 1 July 2027
E-invoicing, government entities	From 1 October 2027
Small Business Relief	Available for tax periods ending on or before 31 December 2029

What the UAE does not tax

It helps to be clear about what is outside the system:

• No personal income tax on salaries and other employment income.
• No tax on personal investment income for individuals, such as dividends, interest and gains on shares held in their own name, where no licence is needed.
• No tax on rent from property held personally, where no licence is needed.
• No withholding tax in practice. The corporate tax law sets withholding tax at 0%.
• No inheritance tax.

Individuals only come into corporate tax if they carry on a business with turnover above AED 1 million in a calendar year. VAT and excise still apply to purchases, as they are built into prices.

Record keeping

Keep accounting and tax records for at least 7 years. Corporate tax requires 7 years, and the general VAT rule is 5 years. Real estate VAT records must be kept for 15 years.

Where to start

Most SMEs need three things in place: corporate tax registration and a yearly return, VAT registration and quarterly returns once over the threshold, and monthly books that support both. Official guidance is on the FTA website and the Ministry of Finance website.

To see what your tax compliance would cost, get an instant estimate. For a full overview of how we handle filings, see our corporate tax services.