If you're moving to United Arab Emirates, here's how taxes work
The difference between gross and net salary in United Arab Emirates can be significant. Understanding the tax system helps you plan your finances properly.
Tax System Overview
| Tax Component | Rate / Details |
|---|---|
| Tax System Type | No_Income_Tax |
| Top Personal Income Tax Rate | Data not available |
| Effective Rate on €90,000 | Data not available |
| Net Monthly on €90,000 Gross | €6,667 |
| VAT (Standard Rate) | 5.0% |
| Special Expat Regime | Yes — other. Zero Income Tax: No personal income tax. 9% corporate tax from June 2023 (above AED 375,000) |
| Tax Revenue (% of GDP) | 0.5% |
Income Tax in United Arab Emirates
The UAE has no personal income tax. Residents do not need to register with tax authorities or file annual income tax returns. There is no tax on employment income, freelance income, or investment gains for individuals.
For context, the average monthly salary in United Arab Emirates is approximately €3,197. Since there is no income tax, gross and net salary are effectively the same (before social contributions for GCC nationals only).
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VAT (Value Added Tax)
The standard VAT rate in United Arab Emirates is 5.0%. VAT is included in consumer prices and applies to most goods and services. Reduced rates typically apply to:
- Basic food items and groceries
- Medical supplies and pharmaceuticals
- Books and educational materials
- Public transport (in some cases)
Special Tax Regimes for Expats
Yes — other. Zero Income Tax: No personal income tax. 9% corporate tax from June 2023 (above AED 375,000)
If eligible, these regimes can provide substantial savings during your initial years in United Arab Emirates. Always verify current requirements with a qualified tax professional, as rules change frequently.
Tax Filing Requirements
The UAE has no personal income tax. Individuals are not required to:
- Register with tax authorities for income tax purposes
- Obtain a personal tax identification number
- File an annual income tax return
However, businesses subject to the 9% corporate tax (above AED 375,000) must register with the Federal Tax Authority and file corporate tax returns. VAT-registered businesses must also file periodic VAT returns.
Double Taxation
United Arab Emirates has double taxation agreements (DTAs) with numerous countries. These treaties determine which country has the right to tax specific types of income and help prevent you from being taxed twice on the same income. Before moving, check whether a DTA exists between United Arab Emirates and your home country.
Tax Tips for Expats
- Hire a local tax adviser familiar with expat situations during your first year
- Keep records of all income, deductions, and tax payments from day one
- Understand residency rules: most countries consider you a tax resident after 183 days
- Check for exit tax: some countries impose tax on unrealised gains when you leave
- Social security contributions are often separate from income tax and can add 10-20% to your total burden
Additional Practical Information
The following information is compiled from expat community sources and recent reports to complement the official data above.
Key Institutions and Services
Based on current expat reports, the following organisations and services are relevant for newcomers to United Arab Emirates:
- Federal Tax Authority
Additional Data Points
Recent reports and expat sources provide these additional figures for United Arab Emirates:
- GCC nationals (citizens of the member countries of the Gulf Cooperation Council) are members of the social security regime, which requires a contribution of 17.5%. UAE nationals only pay 5% of this contribution, while their employers pay the remaining 12.5%. Non-GCC nationals don't pay any social security taxes in the UAE .
- As per an announcement that was released in January 2022, corporations and businesses in the UAE are subject to a corporate tax from the beginning of their first financial year after June 2023. This tax is levied on the net income or profit of these businesses. The corporate tax rates are currently at 0% for taxable income up to AED 375,000, 9% for taxable income above AED 375,000, and at least 15% for large multinational enterprises.
- Hospitality establishments in the UAE (hotels, resorts, restaurants, etc.) generally charge the following taxes: service charge (10%), city tax (up to 10%), municipality fee (10%), and tourism fee (6%). There is also a 10% tax on the room rate.
- As of January 1st, 2018, VAT has been introduced by the UAE government. The rate of VAT is 5%. This decision by the UAE government aims to boost the country's revenue. VAT is now applied to a few select retail products as well, with a 5% retail sale tax on products purchased in the UAE.
- Generally, customs duties in the UAE amount to about 5% of the total cost, insurance, and freight value. However, some goods are taxed at a higher rate: alcoholic products are taxed at 50%, and tobacco products are taxed at 100%. Some products are exempt from customs duty.
- The property transfer tax is levied when you transfer property. The rate for this tax differs from one emirate to another. For instance, in Dubai, it currently stands at 4%.
- As we've already mentioned above, as an expat in the UAE , you won't be required to pay any taxes — regardless of whether you are a UAE resident or not. However, depending on the taxation laws, you may still need to pay income tax in your country of residence on the income earned abroad. In this case, it would be great if your country had a double taxation treaty with the UAE.
- Note that the United States doesn't have double taxation treaties with the UAE. This means that if you are a US citizen living and working in the UAE , you won't need to pay any taxes locally — but will still need to pay taxes in the United States . Fortunately, in most cases, you will only be required to pay expat taxes in the US .
Additional data sourced from expat community reports. All information should be verified with official sources.
Frequently Asked Questions
What deductions can expats claim in United Arab Emirates?
N/A — the UAE has no personal income tax, so there are no deductions to claim. Your gross salary is your net salary (for non-GCC nationals who are exempt from social security contributions).
How are investment gains taxed in United Arab Emirates?
The UAE does not levy personal capital gains tax. Investment gains from shares, property, and other assets are not taxed at the individual level. Property transfer fees apply in some emirates (e.g., 4% in Dubai) but these are transaction fees, not capital gains tax.
Is freelance income taxed differently in United Arab Emirates?
No. Freelance income is not taxed in the UAE. There is no personal income tax for any type of income, including freelance and self-employment income. Freelancers operating through a free zone company may be subject to the 9% corporate tax on profits above AED 375,000, but personal income remains untaxed.
What is the income tax rate in United Arab Emirates?
The UAE has a 0% personal income tax rate. There is no income tax on salaries, wages, freelance income, or investment gains for individuals. On a gross income of €90,000, you keep the full amount (approximately €7,500 per month net).
What happens to my pension contributions in United Arab Emirates?
If you leave United Arab Emirates, your pension rights depend on bilateral social security agreements. EU/EEA countries have portable pension rights. Outside the EU, check if an agreement exists with your home country. Private pension withdrawals may be taxable.
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