In this page: Corporate Taxes | Accounting Rules | Consumption Taxes | Individual Taxes | Double Taxation Treaties | Sources of Fiscal Information
Corporate tax (except for oil and gas companies, and subsidiaries of foreign banks) | 0%. There are no taxes levied by the Federal Government on income or wealth of companies and individuals. |
The Abu Dhabi Income Tax Decree of 1965, the Dubai Income Ordinance of 1969 and the Dubai Income Tax Decree, as well as the Sharjah Income Tax Decree 1968 dictate that: Every corporate body that conducts trade or business through a permanent establishment situated in the Emirate is subject to tax at a sliding scale (in general this only applies to oil, gas and petrochemical companies and branch offices of foreign banks). However, corporate income tax is not enforced in the Emirates. |
Different rates may be agreed with the relevant authority under specific government concession agreements |
Income less than AED 1,000,000 | 0% |
AED 1,000,000 <= Income <= AED 2,000,000 | 10% |
AED 2,000,000 <= Income <= AED 3,000,000 | 20% |
AED 3,000,000 <= Income <= AED 4,000,000 | 30% |
AED 4,000,000 <= Income <= AED 5,000,000 | 40% |
Income >= AED 5,000,000 | 55% |
Tax on profits made by branches of foreign banks | Generally 20% |
Tax applicable for all companies: the duty deducted by the municipality in each Emirate at the time of issuance or renewal of a trade licence | 10% of the annual amount of the rent of offices and warehouses and 5% of the annual amount paid by a company to accommodate its employees. |
Branches of foreign banks are taxed at 20% in most Emirates.
There is a social security regime in the United Arab Emirates that applies to UAE and GCC national employees only. In most of the Emirates, and for UAE national employees, social security contributions are calculated at a rate of 20% of the employee's gross remuneration as stated in the employment contract. Out of the 20%, 5% is payable by the employee, 12.5% is payable by the employer and the remaining 2.5% is financed by the Government; in Abu Dhabi, the overall rate is 20%, of which 15% is paid by the employer.
The different Emirates impose hotel levies (for instance, a fee of between AED 7 to 20 per room/night plus 7% on the total value of the invoice is levied in Dubai, whereas in Abu Dhabi it is equal to AED 15 per room/night plus 6% on the room price). Municipality fees on hotel sales are levied in Abu Dhabi (4%) and Dubai (7%). Hotels in all Emirates levy an additional service charge equivalent to 10% of the hotel sale revenue.
United Arab Emirates | Middle East & North Africa | United States | Germany | |
---|---|---|---|---|
Number of Payments of Taxes per Year | 5.0 | 20.8 | 10.6 | 9.0 |
Time Taken For Administrative Formalities (Hours) | 116.0 | 204.0 | 175.0 | 218.0 |
Total Share of Taxes (% of Profit) | 15.9 | 32.1 | 36.6 | 48.8 |
Source: Doing Business - Latest available data.
For UAE resident businesses, there is a mandatory VAT registration threshold of AED 375,000, with the voluntary registration threshold set at AED 187,500. No registration threshold applies to non-resident businesses making supplies on which the UAE VAT shall be charged. VAT returns generally are required on a monthly or quarterly basis depending on turnover. VAT grouping is allowed (conditions apply).
No personal tax is levied | N/A |
Most Emirates impose a rental tax | Residential tenants pay 5% of annual rent and commercial tenants pay 5% of annual rent in Dubai. Expat tenants pay 3% of annual rent whereas UAE citizens do not pay any rental tax in Abu Dhabi. All tenants pay 2% of annual rent as rental tax in Sharjah. |
Real property tax | A transfer charge is levied on the transfer of real estate in the UAE (4% in the Emirate of Dubai, borne equally by the buyer and the seller). |
Non-GCC national employees who completed at least one year of service are entitled to an end-of-service benefit calculated as 21 days per year of basic wages for the first five years of employment, plus 30 days per year of the basic wage for each additional year of service (capped at two years’ remuneration).
Social security contributions only apply to GCC nationals, with rates varying according to the Emirate (5% is payable by the employee in both Dubai and Abu Dhabi).
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Latest Update: June 2023