Corporate tax and VAT once income passes the thresholds.
Corporate tax due
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VAT registration
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Personal income tax
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Three taxes to keep separate in your head
Freelancers and sole establishments in the UAE often arrive at the same wrong conclusion: that because there is no personal income tax, they have nothing to worry about. The headline is true. Your earnings are not taxed as personal income, so there is no PAYE-style deduction on what you draw. But two other regimes can still reach a self-employed person, and this calculator checks both. The first is corporate tax on business profit. The second is VAT on taxable turnover. They use different bases, different thresholds, and trigger independently, which is why the tool reports them in separate boxes.
Think of it this way. Personal income tax is about what you earn as an individual, and in the UAE that is nil. Corporate tax is about the profit your business activity generates. VAT is about your taxable sales, regardless of whether you made a profit. A freelancer can owe VAT in a loss-making year and owe corporate tax in a low-turnover year, so you cannot reason about one from the other.
Where Small Business Relief rescues you
The most useful thing this tool surfaces is Small Business Relief. As the calculator models it, if your revenue for the period is at or below AED 3 million, you can elect to be treated as having no taxable income, so corporate tax comes out at nil even if your profit would otherwise sit above the AED 375,000 zero-rate threshold. That relief is currently available for tax periods ending on or before 31 December 2026. Both the AED 3 million cap and that sunset date are the calculator’s assumptions and you should confirm the current position with the FTA, because relief windows like this are exactly the kind of figure that gets extended or changed. The structure, a revenue-based election that wipes the corporate tax bill for genuinely small businesses, is the part worth internalising.
A freelancer earning AED 600,000 on AED 4 million turnover
The default inputs sit inside the relief cap, so the tool shows zero corporate tax. To see the tax actually bite, picture a busier consultancy: turnover of AED 4 million, which is above the AED 3 million relief cap, on a profit of AED 600,000. Now Small Business Relief is unavailable, so corporate tax applies. The first AED 375,000 of profit is taxed at 0 percent, and the remaining AED 225,000 is taxed at the 9 percent rate this calculator applies.
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The VAT trigger that catches people out
VAT registration is mandatory once your taxable turnover passes the AED 375,000 threshold the calculator applies, and this is measured on a rolling basis, not at year end. A freelancer whose invoices quietly cross that line mid-year is expected to register and start charging the 5 percent standard rate. The common mistake is conflating this with corporate tax: the numbers happen to share the AED 375,000 figure, but one is a turnover test for VAT and the other is a profit threshold for corporate tax. They are not the same gate. Confirm the registration threshold and the current standard rate with the FTA, and keep clean records of cumulative turnover so the deadline does not surprise you.
Do I still register for corporate tax if I expect to claim Small Business Relief?
Yes. Relief is an election you make on a return, so you must register for corporate tax first and then claim it. Skipping registration because you assume the bill is nil is a common error that can attract penalties from the FTA even when no tax is ultimately payable.
Can I deduct business expenses before the profit figure?
The profit this tool taxes is meant to be your net business profit after legitimate, properly documented business expenses, not your gross income. Corporate tax applies to taxable income, so keeping clean books that separate genuine business costs from personal spending is what determines the profit figure you enter here. The relief and threshold tests then run on that number.