Tax in United Arab Emirates

Who is the tax authority?

The Federal Tax Authority (FTA), established by Federal Decree-Law No. 13 of 2016, administers VAT (since 1 January 2018), Excise Tax (since 1 October 2017), and Corporate Tax (since 1 June 2023) at the federal level. The taxpayer-facing portal is tax.gov.ae, with filing and registration conducted through the EmaraTax system.

Customs duties are handled separately. Emirate-level customs authorities (Dubai Customs, Abu Dhabi Customs) and the Federal Customs Authority work under the GCC Common Customs Law.

Free zone authorities — including JAFZA, DMCC, ADGM, and DIFC — operate distinct regulatory and tax regimes for entities licensed within them. The Accountants and Auditors Association (AAA) is the primary professional credentialing body for registered Tax Agents.

What is the tax year and when are returns due?

For Corporate Tax, a Tax Period is generally the 12-month financial year of the taxable entity — most commonly the calendar year, though other fiscal year-ends are permitted for CT. The first Tax Period for entities subject to CT began on or after 1 June 2023.

CT returns are due within 9 months of the end of the Tax Period. A calendar-year entity (31 December 2025 period-end) must file and pay by 30 September 2026. There is no quarterly advance-payment requirement for CT — it is a single annual obligation.

VAT returns are filed quarterly for most registered businesses; monthly for those with annual taxable supplies above AED 150 million. Excise Tax returns are filed monthly. There is no individual income tax filing obligation in the UAE.

Who counts as a UAE tax resident?

For Corporate Tax, a juridical person is a UAE Resident if it is incorporated or established under UAE laws (onshore or free zone) or if it is effectively managed and controlled in the UAE — the Place of Effective Management (POEM) test under Federal Decree-Law No. 47 of 2022.

For natural persons, CT residency applies only where the person conducts a Business or Business Activity in the UAE with annual turnover above AED 1 million. Investment income, employment income, and real estate held personally are excluded from CT scope under Cabinet Decision No. 49 of 2023.

For double-tax treaty purposes, Cabinet Decision No. 85 of 2022 defines UAE tax residency for individuals under three tests: primary residence and centre of vital interests in the UAE; OR physical presence of 183 days or more in any 12-month period; OR 90 days or more in a 12-month period with a permanent place of residence or Business AND UAE nationality, valid Residence Permit, or GCC nationality. The FTA issues Tax Residency Certificates supporting treaty claims.

What are the personal income tax rates?

Social security contributions apply only to UAE and GCC nationals. UAE nationals employed in the federal sector pay 5% (employee) + 12.5% (employer) + 2.5% (government). Expatriate workers — the majority of the UAE workforce — are not subject to social security.

Inheritance tax and gift tax do not exist at the federal level. The indirect-tax stack for individuals consists of 5% VAT on purchases and selective Excise Tax on specific goods.

Deep-dive: see UAE expat tax residency for how the 183-day and 90-day tests interact in practice.

How does corporate tax work?

Corporate Tax under Federal Decree-Law No. 47 of 2022 applies from financial years beginning on or after 1 June 2023. The rate structure is a simple two-tier system: 0% on taxable income up to AED 375,000 and 9% on taxable income above that threshold.

The CT Law includes a participation exemption for foreign-source dividends and capital gains from qualifying shareholdings. Transfer-pricing rules apply under Articles 34-36 of the CT Law, aligned with OECD arm's-length principles.

What about VAT and other indirect taxes?

Value Added Tax at 5% has applied across the UAE from 1 January 2018 under Federal Decree-Law No. 8 of 2017. The UAE was the first GCC member to implement VAT, along with Saudi Arabia, on the same date.

Mandatory VAT registration applies once annual taxable supplies and imports exceed AED 375,000. Voluntary registration is available from AED 187,500. Non-resident vendors supplying digital services to UAE consumers must register under the reverse-charge or non-resident-vendor rules.

Excise Tax applies on tobacco products (100%), energy drinks (100%), e-cigarettes and liquids (100%), carbonated drinks other than unflavoured aerated water (50%), and sweetened drinks (50%). The UAE also operates within the GCC Customs Union — most goods moving between GCC member states are treated as domestic movements for customs purposes.

What currency does the UAE use?

How are cryptoassets taxed?

Cryptoassets attract no individual income tax in the UAE because there is no individual income tax. For CT purposes, gains and losses from cryptoasset activity conducted as a Business or Business Activity by a juridical person or an in-scope natural person are included in taxable income at the standard 0%/9% rate structure.

The Virtual Assets Regulatory Authority (VARA) in Dubai and the FTA jointly clarified the VAT treatment in 2024: transfers of ownership of virtual assets, conversions, and the keeping and management of virtual assets are exempt from VAT, with retroactive effect from 1 January 2018. Virtual-asset service providers (exchanges, custodians, brokers) are licensed by VARA in Dubai and the Securities and Commodities Authority (SCA) at federal level.

Receipt of virtual assets as compensation for services in a Business context is taxable as ordinary CT income at fair market value on receipt. Non-Business individual receipt of virtual assets remains outside CT scope.

What is the treaty network?

The UAE maintains approximately 145 comprehensive Double Taxation Avoidance Agreements — one of the largest treaty networks globally. The network was built to attract inbound investment and support the use of UAE entities as holding-company platforms. Following the introduction of CT in 2023, treaties also protect UAE-resident investors from excessive foreign withholding tax.

The UAE signed and ratified the OECD Multilateral Instrument (MLI); the MLI's Principal Purpose Test applies to many covered DTAs from 2019 onward. The FTA issues Tax Residency Certificates as the primary document for treaty claims.

The UAE has acceded to the OECD/G20 Inclusive Framework on BEPS. Country-by-Country Reporting and Economic Substance Regulations (ESR, since 2019) are implemented. The MLI modifications — including the Principal Purpose Test — apply to many covered DTAs for tax periods from 2019 onward.

Deep-dive: see UAE tax treaty relief for bilateral withholding-rate tables.

Where does the UAE sit in the regional cohort?

The UAE anchors the GCC financial-hub archetype — a zero-personal-tax, low-corporate-tax jurisdiction with one of the world's largest treaty networks, sitting alongside Bahrain and Qatar. The wider Middle East and Indian Ocean region splits into 5 distinct tax archetypes:

Common penalties and pitfalls

Businesses and professionals moving to or through the UAE regularly trip on several recurring issues:

When should you talk to a UAE Tax Agent?

The FTA operates a Tax Agent registration scheme. Only FTA-registered Tax Agents are authorised to represent taxpayers before the FTA in assessments, objections, and reconsiderations. Some situations where a registered Tax Agent adds clear value:

• You are registering a UAE entity for CT and need to determine the first Tax Period start date
• Your free-zone entity is claiming QFZP status — the qualifying-activity and substance tests require professional assessment
• You have related-party transactions above the transfer-pricing disclosure threshold
• You are part of an MNE group approaching EUR 750 million in consolidated revenues (DMTT exposure)
• You need a FTA Tax Residency Certificate for treaty claims in a foreign jurisdiction
• You received an FTA notice of assessment, tax audit notification, or penalty assessment
• You are restructuring a UAE holding structure following the introduction of CT
• You are a US person in the UAE and need to align UAE CT obligations with US worldwide-tax requirements

You can find vetted UAE-licensed Tax Agents and accounting firms through the directory below.

This page provides general information only. It is not personal guidance for your specific situation. Tax rules change. Always check current figures on the FTA website (tax.gov.ae) or with an FTA-registered Tax Agent before filing.