A Clear & Simple Breakdown of All Taxes in the UAE
The UAE continues to attract entrepreneurs and investors with its business-friendly and low-tax environment. However, with recent changes—especially the introduction of Corporate Tax—it’s essential to understand which taxes may apply to you or your company.
👤 1. Personal Income Tax
- 0% Tax on salaries, wages, investments, and capital gains
- No wealth or inheritance tax
- Good news: individuals (employees, freelancers, investors) are not taxed on personal income.
🏢 2. Corporate Tax (Introduced in 2023)
| Taxable Business Profit | Corporate Tax Rate |
|---|---|
| Up to AED 375,000 | 0% |
| Above AED 375,000 | 9% |
✅ Applies to:
- Mainland companies
- Foreign companies with a UAE presence
- Free Zone companies not meeting qualifying conditions
❌ Not affected:
- Individuals with employment income
- Freelancers & businesses under AED 375K profit/year
- Qualifying Free Zone companies (still 0%)
🛍️ 3. Value Added Tax (VAT)
- 5% VAT on most goods and services
- Introduced in 2018
- Collected by businesses, paid by consumers
Examples of VAT-applied services:
Restaurants, utilities, online services, shopping, hotels, entertainment
VAT Exempt or Zero-Rated Sectors:
Healthcare, education, and some real estate
🏠 4. Real Estate & Property Tax
- No annual property tax
- 4% property transfer fee (one-time, paid in Dubai)
- No capital gains tax on property sales
- Rental income not taxed
- Tenants pay 5% housing fee via DEWA bills
🍹 5. Tourism & Entertainment Taxes
When visiting hotels, restaurants, or clubs, you’ll pay:
- 10% service charge
- 7% municipality fee
- 5% VAT
Hotels also charge a Tourism Dirham Fee: AED 7–20 per night (based on hotel type)
🚬 6. Excise Tax (Sin Tax)
Applies to harmful or luxury products:
| Item | Excise Tax Rate |
|---|---|
| Tobacco products | 100% |
| Energy drinks | 100% |
| Carbonated drinks | 50% |
| Electronic smoking devices | 100% |
| Sugary drinks | 50% |
📦 7. Customs Duties
- 5% on most imported goods
- Free Zones are usually exempt
- Some items (alcohol, cigarettes, luxury goods) may have higher rates
🌍 8. Global Compliance & Economic Substance
To align with international standards, the UAE applies:
- ESR (Economic Substance Regulations): Some companies must prove real activity in the UAE
- UBO (Ultimate Beneficial Ownership): Required disclosure of company ownership
- CbCR (Country-by-Country Reporting): For large multinational groups
These rules ensure transparency and global tax alignment.
💼 Need Help Navigating UAE Taxation?
At Emirazone, we simplify the process and provide expert advice tailored to your situation.
📩 Contact us today for a free consultation and secure your business journey in the UAE.