Short Guide to Taxes in the UAE

One of the main advantages of the UAE is the absence of direct taxes on personal and corporate income in most emirates. Thanks to this system, entrepreneurs and investors are able to retain a large part of their income.

Let's have a look at the main tax rates for legal entities and individuals.

For legal entities:

• Corporate tax A significant advantage of Dubai is that there is no corporate tax for most companies. However, the UAE is introducing a business tax of 9% from 01 June 2023. Companies will have to pay income tax if the company's income exceeds AED 375,000 ($102,000). However, the company is exempt from this tax if the profit is below this amount. Government entities and residents of free trade zones are excluded from the tax reform.

• Customs duties The Emirates provides an efficient customs duty system, especially for companies registered in Free Trade Zones. This reduces the cost of importing and exporting goods, contributing to improved competitiveness and business attractiveness.

• VAT The Value Added Tax (VAT) introduced in 2018 is 5%. It is paid by companies whose annual profits exceed AED 375,000. Companies are required to pay VAT on most goods and services, with certain exceptions.

Double Taxation Avoidance Agreements Dubai actively pursues double taxation avoidance agreements with various countries, providing a sustainable framework for international business relations and protecting companies from unjustified double taxation.

For individuals:

• Income tax One of the main advantages of Dubai is that there is no income tax for most residents.

• Property tax Property owners in Dubai are exempt from property tax.

• Consumption tax There is a consumption tax known as "Excise Tax" within Dubai's tax system. This tax is levied on certain goods, such as tobacco, energy drinks and sweets, and amounts to an additional 50% of their value.