In short
- 0% on salary, bonuses, dividends, interest and personal gains. An employee files no tax return.
- Business turnover above AED 1 million in a calendar year brings corporate tax of 0% and 9%.
- Tax residence: 183 days in 12 months, or 90 days with a residence permit and a home or a job here.
- Nationals who started work from 31 October 2023 pay 11% into the pension fund. Expatriates pay none.
In this guide
Is there income tax in the UAE?
No. The government's portal puts it in one line: the UAE does not levy income tax on individuals. There is no federal tax and no emirate tax on what a person earns, no tax number for an employee and no yearly return.
| Income of an individual | Tax in the UAE |
|---|---|
| Salary, allowances, bonuses, end-of-service gratuity | 0% |
| Dividends, interest and gains from investments held on your own account | 0% |
| Rent from property held as an investment and let without a license | 0% |
| Business or freelance income with turnover up to AED 1 million in a calendar year | 0%, with no registration |
| Business or freelance income with turnover above AED 1 million | Corporate tax: 0% on taxable income up to AED 375,000 and 9% above |
The rate matters to you once you live here and your former country stops treating you as its resident. Living here starts with a residence permit, which we obtain through your own company: see residence visa in the UAE.
What a UAE resident still pays
The state collects from spending and from business, and a few charges fall on a person directly.
| Charge | Rate | Who pays |
|---|---|---|
| VAT | 5% | Every buyer, in the price of most goods and services |
| Excise tax | 100% on tobacco, electronic smoking devices and energy drinks | The buyer, in the price |
| Hotel and restaurant charges | 10% municipality fee and 10% service charge where the venue applies them; in Dubai a Tourism Dirham of AED 7–20 per room per night | The guest |
| Residence visa | from AED 3,000 for each visa through your own company | The resident or the company that sponsors the visa |
| Unemployment insurance | AED 5 a month when the basic salary is below AED 16,000, AED 10 when it is above | Every employee in the private and federal sectors |
| Pension contribution | 11% of the pensionable salary | UAE nationals who took their first job on or after 31 October 2023 |
| Corporate tax | 0% or 9%, by the AED 1 million rule below | A freelancer or a sole owner in business |
The unemployment insurance pays 60% of the insured salary for up to three months to an employee who loses the job other than by resigning. An employee who does not subscribe is fined AED 400. Owners of the business they work in, domestic workers and staff on temporary contracts are outside the scheme.
When a freelancer or sole owner pays corporate tax: the AED 1 million rule
Corporate tax reaches an individual only through business. Cabinet Decision No. 49 of 2023 draws the line at turnover of AED 1 million from business in a calendar year. Three kinds of income never count towards it, whatever their size: wages, income from personal investments, and income from real estate held as an investment.
Once business turnover passes the line, five rules apply:
- Registration: with the Federal Tax Authority, by 31 March of the following year.
- Tax period: the calendar year. The return and the payment are due nine months after it ends, on 30 September.
- Rate: 0% on taxable income up to AED 375,000 and 9% above. Taxable income is the profit of the business after the adjustments the law sets.
- Relief: with revenue of AED 3 million or less you can elect Small Business Relief and pay nothing, for tax periods that end by 31 December 2029.
- VAT: a separate test. Registration is compulsory once taxable sales pass AED 375,000 in 12 months.
Worked examples: a freelance designer and a salaried manager
A designer on a freelance permit bills AED 1,300,000 in 2026 and spends AED 350,000 on the business. Her turnover is above the line, so she registers by 31 March 2027. Taxable income is AED 950,000, and 9% on the AED 575,000 above the 0% band is AED 51,750, due by 30 September 2027. If she elects Small Business Relief, the tax is nil.
A manager earns a salary of AED 900,000, receives AED 200,000 in dividends and lets a flat for AED 120,000 a year. None of it is business turnover. He does not register and pays no tax.
A founder who takes a salary and dividends from his own UAE company is in the manager's position. The company pays corporate tax on its profit, and he pays nothing on what he takes out.
The choice between working under your own name and through a company is weighed in freelance permit or an LLC, and a company's own tax in corporate tax in the UAE.
We do this for you Investor visa in Dubai and the UAE from AED 3,000 a visa
UAE tax residence: the 183-day and 90-day tests
A country with no income tax has no tax file that shows where you belong. Since 1 March 2023 Cabinet Decision No. 85 of 2022 has supplied the definition. A person is a UAE tax resident on any one of three tests, each measured within 12 consecutive months.
| Test | What it takes |
|---|---|
| 183 days | Physical presence in the UAE for 183 days or more |
| 90 days | Presence for 90 days or more, a UAE or GCC passport or a valid UAE residence permit, and a permanent home, a job or a business in the UAE |
| Centre of life | Your usual or main home and the centre of your financial and personal interests are in the UAE |
Any part of a day in the country counts as a day, and the days need not run in a row. A permanent home is a furnished dwelling that stays available to you all year, owned or rented. The Federal Tax Authority confirms the status in a certificate for a period you have already lived through: see tax residency certificate in the UAE.
What your home country may still tax
UAE residence does not end residence somewhere else. Each country applies its own test, and until you fail it that country taxes you as before.
| Situation | Who taxes | What decides |
|---|---|---|
| You still meet the residence test at home | The home country, on worldwide income | Its own law. The UK treats you as non-resident with fewer than 16 days there in the tax year, or fewer than 46 if you were not resident in the three years before. Full-time work abroad allows fewer than 91 days, at most 30 of them working |
| You are a US citizen | The United States, on worldwide income | Citizenship. An exclusion for foreign earned income applies after 330 full days abroad in 12 months |
| Income arises in the home country: rent, pay for days worked there, dividends | The home country, at source | Its law, within the cap of a double tax treaty where one exists |
| Both countries treat you as resident | One of them, under the treaty | Permanent home, then centre of vital interests, then habitual abode, then nationality |
The treaties, their rates and the countries that have none are set out in UAE double tax treaties.
How to become a UAE tax resident, step by step
- Get a residence permit through your own company, an employer or property. We arrange the first route: getting an investor visa through your UAE company. Property worth AED 2,000,000 or more brings the 10-year golden visa in the UAE.
- Take a home that is yours all year: a registered lease or a title deed.
- Count the days from the first entry. Plan for 183 in 12 months, or for 90 if you hold a residence permit and have a home, a job or a business here.
- End residence in the former country under its rules: its day count, its departure forms, its exit charges.
- Keep the lease, the bank statements, the salary or business records and the entry and exit report.
- Once the days are complete, apply for the tax residency certificate (TRC) and hand it to the bank or the tax office that asks.
Social security: nationals contribute, expatriates do not
Pensions and social security cover UAE nationals. Employers register them with the General Pension and Social Security Authority from the first month of work. The law of 2023 applies to nationals who first took a job on or after 31 October 2023. Under it the contribution is 26% of the pensionable salary: the employee pays 11% and the employer 15%.
In the private sector the government pays 2.5% for the employer on salaries under AED 20,000, and the pensionable salary stops at AED 70,000 a month. We calculate and file these contributions with each salary run: payroll in the UAE. Nationals who joined earlier stay under the law of 1999.
A national of another Gulf Cooperation Council state who works in the UAE keeps the pension rights of the home state.
An expatriate pays nothing into the system and earns no state pension. The labour law gives a gratuity at the end of service after one full year of work. It is 21 days of basic wage for each of the first five years and 30 days for each year after, up to two years' wage in total. A basic wage of AED 15,000 and four years of service give 84 days of pay: AED 42,000 on a 30-day month.