Business tax in UAE

In the UAE, the tax system is relatively simple compared to many other countries, as it has very low taxes and is designed to attract investment and businesses. Below are the key elements related to taxes in the UAE:

1. Corporate Tax

Introduced in 2023: The UAE introduced a corporate tax for businesses, applicable to companies making profits above a certain threshold.

Tax Rate: The general corporate tax rate is 9% for profits exceeding AED 375,000. Profits below this amount are exempt from corporate tax.

Free Zones: Companies established in certain Free Zones may be eligible for tax exemptions if they meet specific criteria.

2. Value Added Tax (VAT)

Rate: The standard VAT rate in the UAE is 5%, which applies to most goods and services.

Exemptions: Certain goods and services, such as healthcare, education, and specific financial services, are either exempt or zero-rated.

Filing and Payment: Businesses must file VAT returns quarterly or annually (depending on the size of the business).

3. Personal Income Tax

No Personal Income Tax: The UAE does not impose a personal income tax on individuals. This is one of the key attractions for expatriates living and working in the country.

4. Customs Duties

Rate: Customs duties in the UAE generally range from 5% to 20% on imported goods. However, some goods may be exempt or subject to a reduced rate depending on the specific regulations and free trade agreements.


5. Excise Tax

Excise Tax: The UAE also applies an excise tax on certain goods that are harmful to health or the environment.

Rate: It is typically 50% on sugary drinks and 100% on tobacco and energy drinks.

6. Property Taxes

  • While there are no annual property taxes, certain emirates, like Dubai, impose taxes on property transactions:
    • Dubai: For real estate transactions, there is a 4% transfer fee.
    • Rental Income: Rental income is not taxed, but property owners may be subject to certain fees.

7. Withholding Tax

  • The UAE does not impose a withholding tax on dividends, interest, or royalties.

8. Other Taxes

There are no inheritance taxes or wealth taxes in the UAE.

Certain fees may be imposed for specific government services or licenses.

Tax Filing and Compliance:

  • Businesses must register with the Federal Tax Authority (FTA) for VAT and corporate tax purposes.
  • Tax filings are generally done electronically.

If you need more specific details, such as tax calculations for a business or individual scenario, feel free to ask!