Key Takeaways
- There's no income tax on individuals in the UAE, according to u.ae. The Federal Tax Authority lists three taxes on its website: VAT, excise tax and Corporate Tax (u.ae and tax.gov.ae, accessed October 2026).
- Companies pay Corporate Tax at 0% on the first AED 375,000 of taxable income and 9% on anything above that (Cabinet Decision 116 of 2022, as of October 2026).
- In a free zone, the 0% rate is for companies that count as a Qualifying Free Zone Person, and it covers only their Qualifying Income (Ministerial Decision 229 of 2025).
- VAT is charged at 5%. You have to register once your taxable supplies and imports go over AED 375,000 (FTA, as of October 2026).
- Your home country may still tax you. That depends on its own law, and only an adviser there can answer it.
Dubai doesn't tax salaries, which is why so many people call Dubai tax free. Companies are a different story. A company registered there pays Corporate Tax and VAT, and a free zone licence changes less than many founders expect. Everything below comes from official sources, checked in October 2026. What no UAE source can tell you is how your home country will treat you, so the last section gives you questions to take to an adviser there.
Personal income tax in Dubai
If you're employed in Dubai, or anywhere else in the UAE, your salary isn't taxed. The government portal u.ae says it plainly: the UAE does not levy income tax on individuals. The Federal Tax Authority (FTA), which runs the federal tax system, names three taxes on its taxes page. They are VAT, excise tax and Corporate Tax (u.ae and tax.gov.ae, accessed October 2026).
Freelancers are often caught out by the exception. Say you earn money from a business in your own name rather than through a company. You come under the Corporate Tax law once your gross turnover, meaning your total sales before costs, goes over AED 1,000,000 in a calendar year. Wages, personal investment income and real estate investment income don't count, however large they are, as long as you don't earn them through a licence (Cabinet Decision 49 of 2023, Article 2, as of October 2026).
Corporate Tax rate and the AED 375,000 band
Corporate Tax is a tax on a company's profits. The first AED 375,000 of taxable income is taxed at 0%, and only the part above that at 9% (Cabinet Decision 116 of 2022, as of October 2026). The tax applies to financial years that started on or after 1 June 2023, under Federal Decree-Law 47 of 2022, the Corporate Tax law.
Paying nothing doesn't mean you can skip registration. Under FTA Decision 3 of 2024, a new company has to register within 3 months of incorporation. Registering late costs AED 10,000 (Cabinet Decision 75 of 2023, as amended). For the deadlines and what goes into your first return, see the Corporate Tax guide for new companies.
Small Business Relief helps smaller firms. Under Ministerial Decision 131 of 2026, which the Ministry of Finance announced on 7 August 2026, a company with revenue up to AED 3 million can choose to be treated as having no taxable income. The relief covers tax periods ending on or before 31 December 2029.
Large multinational groups have an extra rule. When a group's combined revenue is EUR 750 million or more, a minimum tax applies that aims at an effective rate of 15%, meaning the tax actually paid as a share of profit. It covers fiscal years beginning on or after 1 January 2025 (Cabinet Decision 142 of 2024, under Article 3(3) of Federal Decree-Law 47 of 2022).
Free zone companies and the 0% rate
A free zone is an area with its own authority that licenses companies under its own rules. A licence from one doesn't, on its own, give you 0% tax on everything. The 0% rate is for a Qualifying Free Zone Person (QFZP), a free zone company that meets the conditions for the 0% rate, and it applies only to Qualifying Income (Cabinet Decision 100 of 2023 and Ministerial Decision 229 of 2025). A free zone company that fails the tests is taxed like any other company, at 0% and 9%.
Four main questions decide whether a company gets there. There are two more conditions on top. The company must price deals with related businesses at arm's length, which means at the price unrelated parties would agree, and keep transfer pricing documents to prove it. It also must not have chosen to be taxed under the standard regime (Federal Decree-Law 47 of 2022, Article 18(1)). One "no" anywhere puts the company back on the standard rates.
- Does the company have adequate substance in the free zone? That means real staff, assets and operating spending there.
- Does its income come from a Qualifying Activity, such as manufacturing, or from another free zone person for an activity that isn't excluded?
- Is its non-qualifying revenue below 5% of total revenue or AED 5,000,000, whichever is lower? Go over that limit and the company loses QFZP status for that period and the next four.
- Does it submit audited financial statements, meaning accounts checked by an outside auditor?
Plain consulting, trading or service income from mainland customers is non-qualifying income. The mainland, in this sense, is every part of the emirate outside a free zone. That income counts against the 5% limit. The QFZP guide walks through the four tests with examples.
VAT and excise
VAT, or value added tax, is charged at 5% (FTA, as of October 2026). You must register once your taxable supplies and imports over the previous 12 months pass AED 375,000. Taxable supplies are the sales that VAT applies to. You may register voluntarily from AED 187,500. Once you're over the limit, you have 30 days to apply, according to Articles 7 and 8 of the VAT Executive Regulation.
Don't confuse this with the Corporate Tax band. Both use the figure AED 375,000, but they're separate thresholds. VAT looks at your sales, and Corporate Tax looks at your taxable income. The steps for signing up are in the VAT registration guide.
Setting up in a free zone doesn't take you out of VAT. For VAT on goods, a free zone counts as outside the UAE only if the FTA's list of Designated Zones names it, and the conditions in Article 51 of the VAT Executive Regulation also have to be met. Excise is a third tax. It's charged on certain goods the FTA lists, and you'll find those goods and their rates on tax.gov.ae.
Withholding, social security and other charges
Withholding tax is tax taken straight out of a payment before it reaches the person paid. On UAE-sourced income of non-residents, the rate is 0%, although the Cabinet may set other rates (Federal Decree-Law 47 of 2022, Article 45, as replaced by Federal Decree-Law 40 of 2024).
This page doesn't cover social security and pension contributions or property fees. They're separate charges, and the authority in charge of each one can tell you what applies. Government fees for licences, visas and Emirates ID are payments for a service, not taxes on income. Employers in every emirate also have to buy health insurance for their private-sector staff. Dubai has its own scheme. In the emirates without one, the federal basic package of AED 320 a year applies, according to the Ministry of Human Resources and Emiratisation (MOHRE) as of October 2026.
Home-country tax
Moving to Dubai doesn't automatically end your tax duties at home. That's decided by your home country's rules and by any tax treaty it has with the UAE. This page can't answer it for you.
Take these questions to a tax adviser in your home country. What they tell you will show whether a UAE company or a UAE residence changes what you owe there.
- Will my home country still treat me as tax resident after I move, and what proof will it want?
- Does it tax the profits of a company I own in the UAE, and in which year?
- Will it accept a UAE tax residency certificate, and what period does the certificate have to cover?
- Does a tax treaty with the UAE apply to my income?
- Which foreign accounts and companies do I have to report?
A tax residency certificate is an official document confirming that you're tax resident in the UAE, and the FTA issues it. You pay an AED 50 submission fee. On top of that, the electronic certificate costs AED 500 if you have a Corporate Tax registration number, or AED 1,750 if you don't. A company can apply only after it has been incorporated for at least 12 months. From then on it can apply for a period that's still running, once three months of that period have passed (FTA service page, as of October 2026).
For the UAE side, see the tax residency certificate guide and the guide to setting up from abroad. Founders from India can use the India-specific page, which takes the same approach.
Where to read more
To check anything on this page, go to the primary sources. That's tax.gov.ae for Corporate Tax, VAT and excise, mof.gov.ae for ministerial decisions, and u.ae for the federal overview. Keep in mind that the English texts on tax.gov.ae and mof.gov.ae are not official translations.
Three situations are worth taking to a corporate tax consultant. One is working through the QFZP tests. Another is claiming treaty benefits. The third is a first return that assumes the 0% rate.
AdvisoryHub may receive a fee when you request an introduction; it does not affect the information on this page.
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