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Corporate Income Tax UAE
The UAE offers one of the most competitive tax environments in the world. When setting up a business in the UAE, you must understand the complex tax environment to ensure you are making the right decisions.
The UAE has no personal income tax. Meaning people living and working in Dubai will not pay tax on their salary, dividends or personal income. In June 2023 the UAE introduced a federal corporate tax regime. This had a 0% rate on taxable income up to AED 375,000 and a 9% rate on taxable income above this threshold.
Free zone companies may be eligible for a 0% corporate tax rate on qualifying income, as long as they meet the substance and compliance requirements that the Federal Tax Authority implements.
At Dubai Pivot, our clients have a clear understanding of their UAE tax position ahead of proceeding. Ensuring their company is correctly structured and registered from the beginning.
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Income Tax in UAE
The UAE tax framework provides an attractive alternative to the UK. Key points to understand are:
- No personal income tax – individuals are not taxed on personal income in the UAE
- No capital gains tax – no capital gains tax in the UAE
- No withholding tax – the UAE does not apply withholding tax on dividends, interest or royalties
- Corporate tax rate in Dubai – 0% up to AED 375,000 and 9% above that
- VAT – the UAE applies a standard VAT rate of 5%
You don’t remove your UK tax responsibilities through setting up a company in Dubai. Your personal and corporate tax position is based on factors such as residency status, nature of your business and company structure.
At Dubai Pivot, we collaborate with relevant advisors to ensure you understand your obligations ahead of proceeding.
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Frequently Asked Questions
There is no personal income tax, capital gains tax or withholding tax in the UAE. In June 2023, a federal corporate tax was introduced at a rate of 0% on income up to AED 375,000 and 9% on any income above this. VAT is at a standard rate of 5%.
Due to offering no personal income tax, no capital gains tax, no withholding tax and a low corporate tax rate. As well as this, its modern infrastructure, international connectivity and stable regulatory environment makes it a desirable location for UK businesses.
Not completely. Corporate tax applies to eligible businesses and there is a VAT rate of 5%. But, compared to the UK, the UAE offers a much more attractive position for UK business owners.