United Arab Emirates
Reviewed: June 2026. UAE corporate tax applies from financial years starting on or after June 1, 2023.
The UAE levies no personal income tax, which makes it one of the most tax-efficient jurisdictions for individuals. However, zero local tax does not automatically mean zero tax globally, and several other taxes and regulatory obligations apply to residents and businesses. This guide explains how the main rules generally work.
Personal Income Tax
Status as of June 2026
The UAE levies no personal income tax on individuals. Salaries, freelance income, rental income from UAE property, and capital gains on investments and real estate earned by individuals remain untaxed in 2026. There is no personal income tax filing requirement for individuals.
The common surprise: zero tax in the UAE does not mean zero tax anywhere. The question is whether another country still has a claim on someone's income. US citizens, for example, still owe US federal tax on their worldwide income regardless of where they live.
Corporate Tax
A 9% corporate tax applies to business profits above AED 375,000 per financial year. The rate is 0% on profits up to that threshold. All businesses operating in the UAE must register for corporate tax, regardless of whether they are liable to pay it.
Individual business activity threshold
Individuals conducting a business in the UAE fall within the corporate tax scope when their annual business turnover exceeds AED 1 million. Income from employment (wages and salaries), personal investment income, and personal real estate income (not conducted through a business structure) does not count toward that threshold.
Qualifying public benefit entities and others
Certain entities qualify for a 0% rate or an exemption, including UAE government entities, qualifying public benefit entities, and qualifying investment funds meeting specific conditions. Free zone entities that meet the qualifying free zone person conditions also benefit from a 0% rate on qualifying income.
Free Zones
The UAE hosts over 40 free zones, each with its own licensing authority and regulatory regime. Free zone companies can be 100% foreign-owned and typically benefit from streamlined setup procedures and, for qualifying activities, a 0% corporate tax rate on qualifying income.
Qualifying free zone persons
To maintain the 0% rate, a free zone entity must meet the conditions for qualifying free zone person status: maintaining adequate substance in the UAE, deriving only qualifying income, not having elected to be subject to the standard corporate tax, and satisfying other administrative requirements. The substance and qualifying income requirements need to be assessed against the specific activities of the entity.
Mainland vs free zone
Free zone companies can generally conduct business within their free zone and internationally, but conducting business on the mainland may require a mainland license or a local distribution arrangement, and doing so may bring non-qualifying income into scope at the 9% rate. The rules around what constitutes qualifying vs non-qualifying income are specific and depend on the nature of the transactions.
Value Added Tax (VAT)
VAT was introduced in the UAE at 5% in January 2018. Businesses with taxable supplies exceeding AED 375,000 per year are required to register. Voluntary registration is available from AED 187,500. Certain supplies are zero-rated (exports, international transportation, certain real estate transactions) and others are exempt (bare land, local passenger transport, financial services).
Free zone entities transacting within a free zone or across UAE free zones may benefit from the treatment of such transactions as outside the scope of UAE VAT in certain circumstances, subject to the designated zone rules.
Tax Residency Certificates
A UAE Tax Residency Certificate (TRC) is issued by the Federal Tax Authority and is used to claim benefits under the UAE's double tax agreement network. The standard requirement for individuals is at least 183 days of physical presence in the UAE in the relevant period. A separate domestic tax residency definition can apply from 90 days for certain purposes (primarily for UAE nationals or those with an employment connection), but the 183-day standard is what most treaty claims rely on.
Obtaining a TRC
Applications are submitted through the FTA portal. For individuals, documentation generally includes a UAE residency visa, passport, Emirates ID, lease agreement or property ownership evidence, and a bank statement showing activity in the UAE. Processing times vary. A TRC is typically issued for one financial year at a time.
Exit Tax Considerations (Other Countries)
Moving to the UAE does not automatically end tax obligations in the home country. Many countries impose exit or departure taxes on individuals who cease to be resident, treating unrealized gains on investments, pension rights, or other assets as if they had been sold at departure. The rules and thresholds vary widely by country.
- Germany: Germany can impose a deemed disposal tax on shareholdings above certain thresholds when a person ceases to be a German tax resident.
- France: Exit tax (impot de sortie) applies to significant shareholdings when leaving France.
- United Kingdom: The UK has specific temporary non-residence rules that can bring gains realized in the UAE back into UK tax if the person returns to the UK within a certain period.
- United States: US citizens and long-term permanent residents who relinquish status may be subject to the expatriation tax regime if they meet asset or net tax liability thresholds.
Obligations in Other Countries
Living in the UAE generally does not end tax residence in another country automatically. Tax residence is determined by each country's own rules, which consider factors including domicile, family ties, assets, economic interests, and day counts. Simply relocating to the UAE does not guarantee a clean break from the home country's tax system.
Common situations where home-country obligations persist despite a UAE move include:
- Retaining a family home in the home country (treated as a "permanent home" available to you)
- Continuing to receive income from home-country sources (rental income, directorship fees, pensions)
- Spouse and children remaining in the home country
- Being a citizen of a country that taxes by citizenship (most notably the United States)
Tax Treaties
The UAE has an extensive double taxation agreement network, with over 130 treaties in force. These treaties allocate taxing rights between the UAE and the treaty partner, and can reduce withholding taxes on dividends, interest, and royalties paid from the treaty partner to UAE residents.
To use a treaty, a UAE resident generally needs a UAE Tax Residency Certificate. Without one, the treaty country's domestic withholding rates apply. Where the UAE has no treaty with a country, the domestic rules of each country apply independently.
What UAE treaties generally cover for individuals
- Employment income: typically taxed where the work is performed
- Business profits: generally taxable only in the country where the enterprise operates, unless a permanent establishment exists in the other country
- Dividends and interest: reduced withholding rates in the source country
- Capital gains on real property: typically taxable where the property is located
- Pensions: often allocated to the country of residence (UAE), which levies no tax
Rules are one thing. Your situation is another. See how the rules generally apply to a situation like yours, and what to bring to a professional.
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