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🇦🇪 UAE Tax Guide 2025

Apr 16, 2025 | Blog | 0 comments

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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 ProfitCorporate Tax Rate
Up to AED 375,0000%
Above AED 375,0009%

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:

ItemExcise Tax Rate
Tobacco products100%
Energy drinks100%
Carbonated drinks50%
Electronic smoking devices100%
Sugary drinks50%

📦 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.

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