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Dubai / Dubai Taxes Individuals

Taxes in Dubai for Private Individuals

The tax exemption on all income of an individual residing in Dubai makes this place a true paradise for entrepreneurs and wealthy individuals. It is one of the key factors that increasingly motivating more and more people from Europe to emigrate to Dubai.

Table of Contents

No Taxes in Dubai

The Enormous Tax Advantages for Entrepreneurs in Dubai

Living in Dubai without Taxes

Taxes in Dubai:
Dubai does not levy income tax, but a value-added tax of only 5% and a corporate tax of 9% for companies. Therefore, individuals in Dubai are still not subject to any taxes.

No Taxes in Dubai

If you live in Dubai, you can enjoy tax exemption on the following:

Dividends

As an owner or shareholder of a company, you receive respective dividends. These incomes are completely tax-free for you in Dubai.

Interest Income

Any interest you earn through your investments and bank balances are also not taxed in Dubai.

Capital gains

Other capital gains, whether from the private sale of stocks or real estate, are also tax-free for you in Dubai.

Rental Income

If you own a property in Dubai? Then you can also enjoy a zero percent tax rate on this source of income in Dubai.

Wages and salaries

As an employee of a company in Dubai, you benefit from tax-free wages or salaries. Whether you work as a doctor in a hospital, as an employed IT specialist, or as an engineer, your income in Dubai remains untouched by income taxes.

The Enormous Tax Advantages for Entrepreneurs in Dubai

Businessman Mel Jameson holds a valid UAE Residence Visa and maintains his tax residence in the United Arab Emirates. Max Meier owns a sports store in downtown Dubai, in what is called Dubai Mainland.

Calculation of Income and Corporate Tax

Scenario 1

The eturnover of his sports shop (Mainland company with a trade license) was AED 2,000,000 in the first business and tax year, and the profit generated, that is revenue minus all operating costs, was effectively AED 350,000 .

Companies in the United Arab Emirates, whether based in Dubai Mainland or a Dubai Freezone, have been subject to a corporate tax of 9% since 2023.

Calculation of the Actual Corporate Tax in Dubai

The profit generated by the company in the last tax year was less than AED 375,000 (annual exemption limit), in this case, no corporate tax is due,

or the company benefits from the regulation still in effect until 31.12.2026 for small businesses (Small Business Relief – up to AED 3,000,000 revenue within the respective tax period), also in this case, no corporate tax is levied,

or the company was exempted from corporate tax liability due to its residence in a Freezone and its activity, the licensed business purpose, by law and on application as a Qualifying Free Zone company,

Since the profit of Max Meier’s company in the past business year was below the exemption limit of AED 375,000 , no corporate tax is due in any case.

Profit for the tax year:	AED 350,000
Corporate tax in AED:	AED 0.00

Calculation of Personal Income Tax

The sports store, i.e., the Dubai Mainland company, is solely owned by Max Meier. He has already made several withdrawals from his company in the past business year and transferred a total of AED 350,000 from the company account to his private account.

Dividends:	AED 350,000
Dubai Income Tax Rate:	0.00 %
Income Tax:	AED 0.00

Calculation of Income and Corporate Tax

Scenario 2

The revenue of Max Meier’s sports store (Mainland company with a trade license) was AED 3,500,000 in the first financial and tax year, and the profit generated, that is, revenue minus all operating costs, was effectively AED 475,000 .

Calculation of Corporate Tax in Dubai

We recall, companies in the United Arab Emirates, whether located in Dubai Mainland or in one of the Dubai Freezones, have been subject to a corporate tax of 9% since 2023.

Exempt from this are companies in Freezones, which, due to their special location and activity, i.e., their licensed business purpose, have been legally exempted from corporate tax (Qualifying Free Zone companies) or whose annual profit is less than AED 375,000 .

Since the profit of Max Meier’s company in the past fiscal year was above the exemption limit of AED 375,000 and it is not considered as a “Qualifying Free Zone Company,” the nine percent corporate tax is due.

Profit for the tax year:	AED 475,000
Corporate tax exemption limit:	AED 375,000
Profit over exemption limit:	AED 100,000
Corporate Tax (9%):	AED 9,000.00

Calculation of Personal Income Tax

The sports store is solely owned by Max Meier. He has already made several withdrawals from his company in the past business year and transferred a total of AED 475,000 from the company account to his private account.

Dividends:	AED 475,000
Dubai Income Tax Rate:	0.00 %
Income Tax:	AED 0.00

Living in Dubai without Taxes

The low tax burden in Dubai has made the city a magnet for European entrepreneurs and wealthy individuals over the past two decades. They are particularly united by the interest in enhancing their quality of life and maximizing their income.

And Dubai is undoubtedly one of the most attractive places worldwide for those seeking an excellent and luxurious life with significant financial benefits.

While the tax exemption in Dubai for resident private individuals, except for a 5% VAT, covers essentially all types of income, it is still important to be aware that compliance with national and international tax regulations remains a personal responsibility.

Our contribution aims to provide you with an overview of taxes and tax-free incomes in Dubai. However, it is highly advisable to consult a qualified specialist to discuss your individual situation in advance and continuously.

Living in Dubai and conducting business internationally from there offers significant advantages – and with solid planning and preparation, you can make the most of it.

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Aspect	Dubai Freezone Company*
Jurisdiction	The free trade zones are independent economic zones with their own administration. Each zone has its own procedures for formation, licensing and supervision.
Ownership	100% foreign ownership is possible. A local sponsor is not required.
Scope of activities	The freezone is ideal for internationally active companies that operate outside the United Arab Emirates or maintain business relationships with other freezones. Direct trade on the local market is generally not provided for, but can be enabled through supplementary models (e.g. distribution partners or additional license).
License / Business purpose	Each freezone offers industry-specific licenses, e.g. for trade, services, technology or production. The granting is done directly by the respective freezone authority.
Office / Establishment	Each freezone company requires an establishment – e.g. Flex-Office, Shared Desk or an own office. We offer Full-Service packages that already contain a complete solution and enable immediate operational readiness.
Visa / Employees	Entrepreneurs and employees can obtain Residency visas. The number depends on license and office size.
Corporate tax (Corporate Tax)	Profits up to AED 375,000 per year remain tax-free. Only the profit exceeding this is taxed at 9%. Companies in a freezone that meet the legal requirements can continue to apply the tax rate of 0% on qualifying income. Small businesses with an annual turnover of up to AED 3,000,000 are completely exempt from corporate tax until the end of 2026.
Profit transfer / Withholding tax	Profits and capital can be transferred abroad without restriction. No withholding tax is levied.
Costs	Formation and ongoing costs are usually cheaper and clearly calculable. After individual consultation, we determine the optimal location and, upon request, submit a tailor-made offer that includes all services.
Conclusion	A Freezone company in Dubai is the ideal structure for entrepreneurs who are internationally active or want to conduct business with partners worldwide from Dubai. It offers full ownership rights, tax advantages and a modern, business-friendly environment.

Aspect	Dubai Mainland Company*
Jurisdiction	The mainland is subject to the state authority Department of Economy & Tourism (formerly DET) and other onshore authorities. These control all economic activities within the UAE.
Ownership	In many cases, 100% foreign ownership is also possible. In individual, regulated areas, special approvals may be required.
Scope of activities	Mainland companies may conduct business without restriction within the entire UAE. They are therefore the right choice for companies that want to be locally present and offer their products or services directly on site.
License / Business purpose	Licenses are granted centrally by the state onshore authorities. The procedures are more extensive and often subject to additional requirements.
Office / Establishment	On the mainland, a fixed business location is mandatory. As a rule, stricter area requirements and rental obligations apply here.
Visa / Employees	Mainland companies can also apply for visas for owners and employees.
Corporate tax (Corporate Tax)	For mainland companies, the same principle applies: profits up to AED 375,000 remain tax-free, above that the rate of 9% applies. This regulation ensures moderate tax burden and high planning security.
Profit transfer / Withholding tax	Mainland companies can also transfer profits freely. No withholding tax is levied either.
Costs	Formation is more complex and generally more cost-intensive. State fees, rental costs and administrative requirements are higher.
Conclusion	A Mainland company is suitable for entrepreneurs who want to be locally business active in the UAE – for example in trade, gastronomy or services for customers within the emirates.

Taxes in Dubai for Private Individuals

No Taxes in Dubai

The Enormous Tax Advantages for Entrepreneurs in Dubai

Calculation of Income and Corporate Tax

Calculation of Income and Corporate Tax

Living in Dubai without Taxes

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