Taxes in the UAE

Tax rates in the United Arab Emirates in 2026 at a glance

A quick cheat sheet based on Emirati federal law in 2026. Amounts are in US dollars with the sum in dirhams in brackets: the dirham is pegged to the dollar at 3.6725, so 1 million dirhams is about $280,000.

Personal income really is untaxed, but since June 2023 a federal corporate tax also reaches individuals who run a business. Zero tax holds for employees and passive investors, not for entrepreneurs.

New in 2025-2026: a 15% minimum tax for large groups, value added tax amendments and an R&D credit from 1 January 2026, new penalties from 14 April 2026 and Small Business Relief extended to 2029. To compare jurisdictions, see taxes by country.

Compare taxes in 146 countries: relocation taxes 2026

Who counts as a tax resident of the United Arab Emirates

Residency matters here for treaties, for the certificate banks ask for, and to show your former country you now live elsewhere. The rules are set by Cabinet Decision No. 85 of 2022, in force from 1 March 2023. Any one of three tests is enough.

The 12 months are consecutive, not a calendar year. A residence visa alone is not enough, and the centre of interests is the hardest test to prove.

Tax Residency Certificate

The Federal Tax Authority (FTA) issues Tax Residency Certificates through EmaraTax for a chosen 12-month period, current or past. Under the FTA fee schedule an application costs $15 (50 dirhams), issuance for an individual without a corporate tax registration $280 (1,000 dirhams), or $140 (500 dirhams) with a TRN, and a hard copy $70 (250 dirhams) more, with processing in up to 10 business days. You need an Emirates ID and an entry and exit report, plus a lease or proof of employment for the 90-day test.

Emirati residency does not end residency elsewhere: many countries treat anyone who spends 183 days there in 12 months as resident. Dual residence is resolved by the treaty tie-breaker: permanent home, centre of vital interests, habitual abode, nationality. How to count days is covered in the 183-day rule in plain words.

Tax residency in the United Arab Emirates: 183 and 90 days, how to get it

The United Arab Emirates has no personal income tax, but resident status is needed for tax treaties, banks and your former country. 183 days in 12 months in a row make you resident. The shortcut is 90 days with a residence visa and a permanent home or job in the country.

The third ground is a main home and centre of interests in the Emirates. The tax residency certificate is issued by the Federal Tax Authority; without it your former country will keep treating you as its resident.

Mistakes cost more: the wrong lease or statements, and the certificate application is rejected. Murblz support removes these risks: we count days, gather proof of home and work, and obtain the certificate. We guarantee professional work and a transparent process, and in most cases a result on the first filing.

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Personal income tax: the zero rate and its limits

There is no personal income tax or personal return. However, corporate tax applies to individuals doing business in the United Arab Emirates once turnover from it exceeds $280,000 (1 million dirhams) in a calendar year. Three types of income are excluded and stay untaxed at any amount.

If an activity needs a licence, it is a business; passive personal investment is not.

Example: a salary of $8,200 (30,000 dirhams) a month

A foreign employee of a private company in Dubai earns 30,000 dirhams, of which 18,000 is basic salary and 12,000 housing and transport allowances.

The employer's extra costs are gratuity, the visa and health insurance, not taxes. Emirati nationals follow below.

Pension contributions, unemployment insurance and gratuity

Social security covers only Emirati and other Gulf Cooperation Council nationals. Other expatriates pay nothing and get an end-of-service gratuity instead.

The base is capped at $14,000 (50,000 dirhams) a month under the old scheme, $20,000 (70,000 dirhams) under the new one, and runs from $1,700 to $28,000 (6,000-100,000 dirhams) in Abu Dhabi. The familiar 20% (5% + 12.5% + 2.5%) is the old scheme, and the claim that all employees pay 5% is wrong: expatriates are outside the system.

Example: Emirati national earning $8,200 (30,000 dirhams), new scheme

End-of-service gratuity

A private sector expatriate with a year or more of service gets 21 days of basic salary for each of the first five years and 30 days for each later year, capped at two years' pay; allowances are excluded. Since November 2023 employers may use an invested savings scheme instead.

In the Dubai International Financial Centre (DIFC) the DEWS plan replaces gratuity: 5.83% of basic salary monthly for under five years of service and 8.33% after.

Unemployment insurance

Since 1 January 2023, private sector and federal government employees must hold ILOE (Involuntary Loss of Employment) cover: 5 or 10 dirhams a month, under $5, for basic salary up to $4,400 (16,000 dirhams) or above it, plus value added tax; not subscribing costs $110 (400 dirhams). It pays up to 60% of basic salary for up to three months after 12 months of premiums. In DIFC and ADGM (Abu Dhabi Global Market) it is voluntary.

Corporate tax: 0% and 9%, dividends and reliefs

Corporate tax applies under Federal Decree-Law No. 47 of 2022 to financial years starting on or after 1 June 2023. Resident companies, incorporated in the United Arab Emirates (free zones included) or managed from there, are taxed on worldwide income.

Worked example

A mainland company with taxable income of 1,000,000 dirhams for the year, about $280,000.

Small Business Relief

Small Business Relief treats a resident as having no taxable income if revenue in the current and every previous period stayed at or below $820,000 (3 million dirhams). It was due to cover periods ending by 31 December 2026, but Ministerial Decision No. 131 of 2026, issued on 29 July 2026 and published in August, extended it to 31 December 2029. The test is revenue, and once exceeded the relief is gone for good. Qualifying free zone persons and groups with revenue above $860 million (3.15 billion dirhams) cannot use it. Registration and a return are still required.

Dividends, losses and interest

Dividends from Emirati companies are exempt, as are dividends and gains from foreign subsidiaries under the participation exemption: a holding of 5% or $1.1 million (4 million dirhams), held for 12 months, in a subsidiary taxed at 9% or more. Dividends paid to owners carry no withholding tax.

Losses carry forward indefinitely but offset at most 75% of a year's taxable income. Net interest above $3.3 million (12 million dirhams) is deductible up to 30% of EBITDA. 95% common ownership allows a tax group, related-party dealings must be at arm's length, and there are no controlled foreign company rules or exit tax.

New in 2026: the R&D tax credit

For tax periods starting on or after 1 January 2026, Cabinet Decision No. 215 of 2025 and Ministerial Decision No. 24 of 2026 give an R&D credit of 15% to 50% of qualifying spend, depending on its size and the number of researchers. It is non-refundable, the work must be done in the Emirates, and projects need prior approval from the Emirates Research and Development Council.

Returns and payment are due within 9 months of the period end. Accounts follow IFRS and need an audit above $14 million (50 million dirhams) of revenue and for qualifying free zone persons. To get set up, see company registration in the Emirates and Emirati business bank accounts.

Free zones: when the 0% rate really works

The United Arab Emirates has more than 40 free zones, and companies there pay corporate tax like any other. Only a Qualifying Free Zone Person gets 0%, and only on qualifying income. All other income is taxed at 9%.

The status requires every one of these conditions:

• the company is registered in a free zone and has adequate substance there: staff, assets and spending in line with its activity;
• it earns qualifying income;
• it has not elected the standard regime;
• it complies with transfer pricing rules;
• it keeps audited IFRS accounts;
• non-qualifying revenue does not exceed 5% of total revenue or $1.4 million (5 million dirhams), whichever is lower.

Qualifying activities are a closed list: manufacturing and processing, qualifying commodity trading, holding shares, shipping, reinsurance, regulated asset management, headquarter and treasury services to related parties, aircraft leasing, logistics and distribution from designated zones. Deals with individuals are almost entirely excluded.

The awkward conclusion: a freelancer's or IT consultant's free zone company billing foreign clients for services is almost never qualifying; its real choice is the standard regime with the $110,000 (375,000 dirhams) zero band or Small Business Relief. Free zone 0% suits commodity trading, holdings, logistics and group treasury with real staff in the zone.

VAT at 5%, excise and what changed in 2026

Emirati value added tax has applied since 1 January 2018 under Federal Decree-Law No. 8 of 2017, at a standard rate of 5%. The FTA administers it through the EmaraTax portal.

Registration and returns

Registration is mandatory once taxable supplies over 12 months exceed $110,000 (375,000 dirhams), or will within 30 days; apply within 30 days. Voluntary registration is possible from $52,000 (187,500 dirhams) of supplies or expenses. Non-residents have no threshold: a foreign service selling digital services to Emirati consumers registers from the first dirham. Returns are quarterly or monthly, due with payment by the 28th of the following month.

Amendments from 1 January 2026

Federal Decree-Law No. 16 of 2025:

• no self-invoicing under the reverse charge, provided documents are kept;
• excess input tax can be refunded or offset only within five years of the end of the period it arose in, so review older credits;
• input tax is denied where a supply was part of evasion the recipient knew or should have known about.

E-invoicing

The pilot and voluntary adoption started on 1 July 2026. Mandatory go-live: businesses with revenue of $14 million (50 million dirhams) or more from 1 January 2027, others from 1 July 2027 (appointing an accredited service provider by 31 March 2027), government entities from 1 October 2027.

Excise and customs

Since 2026 sweetened drinks are taxed by volume and sugar content rather than price. Customs duty is generally 5% of value including freight and insurance, higher on alcohol and tobacco; goods from Gulf Cooperation Council states and free trade partners enter duty-free.

Freelancers, sole traders and digital nomads

There is no simplified, patent or IT regime of the kind found in former Soviet states, only corporate tax with a zero band, Small Business Relief and free zones.

Example: a licensed freelancer

A consultant on a freelance licence, as an individual: 2026 revenue 4,000,000 dirhams, about $1.1 million, expenses 2,800,000 dirhams.

With revenue of $690,000 (2,500,000 dirhams) the consultant could elect Small Business Relief and pay nothing, but would still register and file. Supplies above $110,000 (375,000 dirhams) also trigger value added tax: 5% for Emirati clients, zero rate for qualifying exported services.

Digital nomads and remote employees

The one-year Remote Working Visa is for people working remotely for a company abroad on at least $3,500 a month. That salary is untaxed in the United Arab Emirates, but local clients are off limits. Details are on the Emirati digital nomad visa page.

The real risk lies in the paying country: it may tax the salary if you stay resident there or the treaty allows it; some treaties count remote work for an employer in that country as performed there. If you need your own structure, start with choosing a jurisdiction for your company.

Property, inheritance, capital gains and crypto

The United Arab Emirates has no annual property tax and no inheritance, gift or wealth tax. The burden sits in purchase fees and rent-based municipal fees, which differ by emirate.

Example: a Dubai apartment for $550,000 (2,000,000 dirhams)

Admin fees and agent commission come on top, and share transfers in property-holding companies can also attract the fee. A country where you remain resident may tax rent and gains its own way. For property, see investment property in the Emirates, and for residence through purchase see Emirati residence by investment.

Inheritance

There is no inheritance tax, but Muslims inherit under Sharia by default and non-Muslim foreigners under the civil personal status law. Without a registered will assets may not pass as you expect, so expatriates register wills, for example with the DIFC or the Abu Dhabi Judicial Department. More in inheritance planning in the Emirates.

Crypto

Individuals trading crypto personally pay no tax; a licensed business or company falls under corporate tax. Cabinet Decision No. 100 of 2024 made transfers and conversions of virtual assets exempt from value added tax from 15 November 2024, retroactively to 1 January 2018. The Emirates has joined the international Crypto-Asset Reporting Framework: implementation in 2027, first exchanges in 2028. For crypto and relocation, read where crypto income goes untaxed.

Non-residents and double tax treaties

Emirati withholding tax is 0%. A foreign company pays corporate tax only with an Emirati permanent establishment or income from Emirati real estate.

The United Arab Emirates has more than 140 double tax treaties, and the Organisation for Economic Co-operation and Development Multilateral Instrument (MLI) has applied since 1 September 2019. As the Emirates withholds nothing, treaties mainly cap the other country's tax on payments to Emirati residents.

Withholding rates under selected treaties

Maximum rates the partner country withholds on payments to Emirati residents, per the treaty texts; a slash means rates vary by recipient and holding.

The reduced rate needs an Emirati residence certificate covering the payment period; otherwise the payer withholds at its domestic rate.

The new treaty with Russia, signed in Abu Dhabi on 17 February 2025, entered into force on 18 July 2025 and applies from 1 January 2026, replacing the 2011 agreement that covered only state investments; Russia's 2023 suspension of treaties does not affect it. It caps withholding on dividends, interest and royalties at 10%, gives dual residents a tie-breaker, treats remote work for an employer or client from the other country as performed there, and denies benefits where obtaining them was a main purpose of an arrangement. From 1 January 2026 Russia also removed the Emirates from its lists of preferential tax regimes and offshore zones.

Deadlines, penalties and the pitfalls

Since 14 April 2026, Cabinet Decision No. 129 of 2025 governs penalties under the tax procedures, value added tax and excise laws. Late payment costs 14% a year charged monthly, as for corporate tax, instead of 2% at once plus 4% a month. Self-correcting an error costs 1% a month of the shortfall; an error found in an audit costs 15% plus 1% a month. Late registration costs $2,800 (10,000 dirhams), a late return $280 (1,000 dirhams) or $550 (2,000 dirhams) for a repeat. The corporate tax late registration penalty is waived if the first return is filed within seven months of the first period end. Records are generally kept for 5 years for value added tax and 7 years for corporate tax. For bookkeeping and reporting support, see Emirati audit and accounting.

What this means if you are relocating

Zero tax in the United Arab Emirates is real but solves nothing on its own. An honest list of limits.

Zero in the Emirates does not cancel tax at home. If you remain resident in your home country, for example by spending 183 days there within 12 months, it can tax your worldwide income and treat your Emirati company as a controlled foreign company.

Remote work for a foreign employer can be taxed in the employer's country. Some treaties count it as performed there wherever you sit.

A residence certificate has to be earned. Banks and foreign tax offices want the FTA certificate, issued only for genuine residence. For accounts, see personal bank accounts in the Emirates.

A free zone does not mean zero. Services to outside clients and sales to individuals are not qualifying income.

Registration is needed even at zero tax. Small Business Relief does not remove it, and missing the deadline costs $2,800 (10,000 dirhams).

Taxes give way to fees and prices. 4% on buying a home, 5% on rent, value added tax, visas, insurance, schools. We did the maths in the Emirates in 2026: residency, taxes and cost of living.

Transparency is growing. The Emirates exchanges account data under the Common Reporting Standard, crypto joins in 2028, and treaties provide for information exchange.

The rules change every year. Check any figure with the FTA and Emirati Ministry of Finance websites, or ask Murblz specialists.

Related: all Emirati programs.

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