Insights Corporate Tax
Dubai Tax Rate: What Businesses and Residents Actually Pay
What is the Dubai tax rate? A clear 2026 guide to the 9% corporate tax, 5% VAT, excise, customs duty and the zero personal income tax.
Key takeaways
- No single rate exists — Dubai's taxes are mostly UAE federal taxes plus a few emirate-level fees, each with its own rate and threshold.
- Personal income is untaxed — the UAE charges 0% income tax on salaries and wages, which is the rate most people mean by 'Dubai tax rate'.
- Corporate tax is 0% then 9% — nil up to AED 375,000 of taxable profit and 9% on the excess, under Federal Decree-Law 47 of 2022.
- VAT is 5%, with zero-rated and exempt categories; excise reaches 100% on tobacco, vapes and energy drinks, and imports usually carry 5% customs duty.
- Dubai adds its own charges — a 5% housing fee on residential rent and a 4% Land Department property transfer fee, collected locally.
Ask ten people what the Dubai tax rate is and you will get ten different answers, most of them either “zero” or a puzzled shrug. Both reactions are understandable, because there is no single figure to point at. “Dubai tax rate” is really shorthand for a small stack of separate taxes — most set at the UAE federal level rather than by the emirate itself — each with its own rate, its own threshold, and its own rules about who actually pays.
For someone living on a salary, the honest answer really is close to nothing. For a company, it is a short list of rates that are simple to state and easy to get wrong in the detail. This guide sets out every rate that applies in Dubai in 2026: what it is, who pays it, and where the real cost tends to hide.
There is no single “Dubai tax rate”
The first thing to untangle is the word “Dubai”. Most of the taxes people have in mind are not Dubai taxes at all — they are UAE taxes, set by federal law and administered by the Federal Tax Authority across all seven emirates. Corporate tax, VAT and excise tax are national. What Dubai itself controls are a handful of emirate-level fees on things like rent, property transfers and hotel stays. When someone says “the tax rate in Dubai”, they are usually blending these two layers together without realising it. The same goes for the phrasing: whether you ask about the Dubai tax percentage, Dubai taxes in general, or how much tax there is in Dubai, the answer has to be split by who is paying before any number means anything.
That distinction matters because it explains why the answer is never one number. A resident on a salary faces a very different picture from a trading company, and both differ again from a tourist checking out of a hotel or a landlord selling a flat. Rather than hunt for a single rate that does not exist, it helps to run through each tax in turn and see which ones touch you. For most SMEs and residents, only three or four are relevant at any one time.
This page is the rate card. If what you actually want is the reasoning — how a state funds itself without an income tax, and where the money comes from instead — that is a different question, and we answer it separately in why Dubai is called tax free. Stay here for the numbers; go there for the explanation behind them.
Personal income: the 0% behind the reputation
The rate most people actually mean when they ask about Dubai is the one on personal income, and here the famous answer holds up. The UAE does not levy any personal income tax on salaries and wages. An employee is paid gross, with nothing withheld for income tax, and there is no emirate-level income tax layered on top. This is the genuine core of the “tax-free” story, and for individuals earning employment income it is broadly true.
A few sensible caveats belong next to that headline. The absence of income tax is not the absence of all cost — you still pay 5% VAT on most of what you spend, and if you rent or buy property in Dubai there are charges attached, which we come to below. Your tax position back home may also survive the move, depending on your own country’s rules and any tax residency you keep there.
If you need to prove where you are resident for treaty purposes, the mechanics of the 183-day rule for UAE tax residency are worth reading before you assume the zero rate settles everything. But on the narrow question — is salary taxed in Dubai — the rate really is nil. So the Dubai tax rate on salary is 0%, there is no income tax slab to work through as there would be in India or the UK, and Dubai taxes on salary amount to nothing withheld at source and nothing filed by the employee.
Corporate tax: 0% up to AED 375,000, then 9%
For companies, the picture is a little richer and considerably more misunderstood. Under Federal Decree-Law No. 47 of 2022, UAE corporate tax applies at 0% on taxable income up to AED 375,000 and 9% on taxable income above that. The regime is effective for financial years starting on or after 1 June 2023, so by 2026 it is simply part of running a business here. That is the Dubai company tax rate in full: there is no separate emirate-level corporate tax in Dubai on top of the federal one, so corporate tax in Dubai and the UAE corporate tax rate are the same thing described two ways.
9%
The headline UAE corporate tax rate applied to taxable income above AED 375,000 — the first AED 375,000 is taxed at 0%
The 9% is a marginal rate, which trips people up constantly. It does not mean a profitable company pays 9% on everything. Only the slice of taxable income above AED 375,000 is taxed at 9%; the first AED 375,000 sits in the 0% band. Just as important, “taxable income” is not your turnover and not your bank balance. It begins with accounting profit prepared under IFRS and is then adjusted for specific tax rules — certain expenses added back, certain items excluded — before the rate is ever applied. Two companies with identical revenue can end up with very different tax bills purely because of how their profit is measured. Our deeper breakdown of the corporate tax rate brackets in the UAE walks through exactly how that calculation is built.
One point catches new founders off guard: registration and an annual return are required even when you expect to pay nothing. Small companies that fall entirely within the 0% band, or that elect small business relief where their revenue is at or below AED 3 million (a relief currently available for tax periods ending on or before 31 December 2029), still have to be registered with the Federal Tax Authority and still have to file. The 0% is claimed through the return, not instead of it. Getting this right from the start is a large part of why our corporate tax services begin with registration and clean books rather than with the rate itself.
Free zones: 0% is a status, not a postcode
Free zones deserve their own note, because the “0% in the free zone” line does more damage than almost any other tax myth in Dubai. A Qualifying Free Zone Person can indeed benefit from a 0% corporate tax rate — but only on qualifying income, and only while it meets a set of conditions. Income that does not qualify is taxed at the standard 9%.
The conditions are real work: adequate substance in the free zone, qualifying activities, compliance with transfer pricing rules, audited financial statements, and staying within the limits set for non-qualifying revenue. Miss them and the whole 0% position can fall away. In other words, the reduced rate is something a company earns and evidences every year, not something that comes automatically with a licence and an address. We set out the tests in detail in our guide to free zone corporate tax in the UAE; the short version is that a free zone changes the conditions under which a lower rate may apply, it does not switch tax off.
The 15% top-up that only touches the giants
You may have seen a 15% figure attached to UAE tax and wondered whether it replaces the 9%. For almost every business in Dubai, it does not. The UAE has introduced a Domestic Minimum Top-up Tax, effective for financial years starting on or after 1 January 2025, which brings the effective rate up to 15% for very large multinational groups — those with consolidated global revenues of EUR 750 million or more in at least two of the four preceding financial years. It aligns the UAE with the OECD’s global minimum tax framework.
VAT: 5% on most of what you buy
Value Added Tax is the tax residents feel most often without thinking about it. Under Federal Decree-Law No. 8 of 2017, VAT has applied across the UAE at a standard rate of 5% since 1 January 2018. It sits on the price of most goods and services, from a coffee to a consultancy invoice, and it is the same 5% in Dubai as anywhere else in the country. Two naming points save confusion here.
There is no separate sales tax in Dubai — VAT is the consumption tax, and it does the job a sales tax does elsewhere. And there is no GST either: people arriving from India or Singapore often ask what the GST rate is, and the answer is that the UAE calls its equivalent VAT and charges 5%, which our goods and service tax in the UAE explainer sets out in full.
Not everything carries the standard rate. Some supplies are zero-rated at 0% — certain exports and a defined set of categories — and others are exempt, such as particular financial services and bare land. The practical difference between zero-rated and exempt matters a great deal to businesses, because it changes whether input VAT can be reclaimed, but as a shopper you simply see the 5% or you do not. Businesses that need the detail should read the UAE VAT rate in full, which sets the 5% against the zero-rated and exempt lists and shows in numbers why those two zeros are not equivalent.
For a business, the thresholds are what count. Registration becomes mandatory once taxable supplies pass AED 375,000 in a twelve-month period, and voluntary registration is available from AED 187,500. Once registered, a company charges 5% on its sales, reclaims the VAT it pays on eligible costs, and remits the difference to the Federal Tax Authority through periodic returns.
Getting the registration timing and the input-recovery mechanics right is exactly where our VAT advisory work concentrates, and if you are approaching the threshold, our step-by-step guide to registering for VAT in the UAE covers the process end to end. For the full picture on this one tax, including which Dubai free zones are designated zones and which local charges only look like VAT, see our dedicated guide to Dubai VAT.
Excise tax: up to 100% on a short list
Excise tax is the one most people forget exists, because it is baked into the shelf price of a narrow range of goods. It is a UAE-wide tax aimed at products considered harmful to health, and the rates are deliberately steep. Tobacco and tobacco products, energy drinks, and electronic smoking devices and the liquids used in them are taxed at 100%. Sweetened drinks are treated differently: since 1 January 2026 the old flat 50% rate on carbonated and sweetened drinks has been replaced by a tiered volumetric charge levied per litre according to sugar content, running from nil on low-sugar drinks up to AED 1.09 per litre on the highest-sugar ones. Carbonated drinks are no longer a separate excise category — what now matters is how much sugar a drink contains.
Because excise is applied before the product reaches the till, ordinary consumers rarely see it as a separate line — it is simply why a can of energy drink or a packet of cigarettes costs what it does. For importers, producers and stockists of these goods, though, excise is a compliance obligation in its own right, with its own registration and returns. We explain how it sits alongside VAT, and where the two overlap on the same product, in our comparison of excise versus VAT in the UAE. If you handle excisable stock, our excise tax support covers the registration and filing side.
Customs duty: usually 5% at the border
Bring physical goods into the country and a different rate applies. Under the GCC Common Customs Tariff, imported goods generally attract customs duty of 5% on their CIF value — the cost of the goods plus insurance and freight. It is a border tax rather than a tax on operating in Dubai, but for any business that imports stock it is a real cost that belongs in the landed price of every shipment.
There are important exceptions on both sides. A number of essential goods carry 0% duty, while others — notably tobacco and alcohol — are taxed at much higher rates. Goods brought into a free zone and re-exported without entering the mainland market are generally handled differently again, which is one of the practical attractions of the free zone model for traders. The headline to remember is that the ordinary rate is around 5%, but the exceptions are wide enough that it always pays to check the specific classification of what you import.
The emirate-level charges people call “tax”
Finally, the genuinely Dubai-specific charges — the ones set by the emirate rather than by federal law. These are not called taxes, but they behave like them and they hit household and property budgets directly.
The most familiar is the housing fee. Residential tenants in Dubai pay a municipality housing fee calculated at 5% of the annual rent, collected in monthly instalments through the DEWA utility bill. Buy rather than rent, and the Dubai Land Department levies a property transfer fee of 4% of the property value on the transaction. Stay in a hotel and you will see tourism and municipality charges added to the bill per room per night. None of these is a corporate or income tax, but they are the closest thing to a “Dubai tax” that an ordinary resident actually pays month to month.
The rates in Dubai are unusually simple to list and unusually easy to misread. The mistake is rarely the arithmetic — it is assuming one number covers everything, or that a free zone address or a zero expectation means there is nothing to file.
Every Dubai rate on one card
Here is the whole stack in one place, with the instrument each rate comes from. The first block is federal and applies identically in Abu Dhabi, Sharjah and every other emirate; the last block is Dubai’s own.
| Tax or charge | Rate | Applies to | Legal basis |
|---|---|---|---|
| Personal income tax | 0% | Salaries and wages — no such tax exists in the UAE | No UAE income tax law |
| Corporate tax, first band | 0% | Taxable income up to the amount set by Cabinet decision, currently AED 375,000 | Federal Decree-Law No. 47 of 2022, Article 3(1)(a) |
| Corporate tax, second band | 9% | Taxable income above that amount | Federal Decree-Law No. 47 of 2022, Article 3(1)(b) |
| Corporate tax on a QFZP’s qualifying income | 0% | Qualifying Free Zone Persons meeting every condition | Federal Decree-Law No. 47 of 2022, Article 3(2)(a) |
| Corporate tax on a QFZP’s other income | 9% | Income that is not qualifying income | Federal Decree-Law No. 47 of 2022, Article 3(2)(b) |
| VAT, standard rate | 5% | Most goods and services | Federal Decree-Law No. 8 of 2017 |
| VAT registration, mandatory threshold | AED 375,000 | Taxable supplies and imports over 12 months | Cabinet Decision No. 52 of 2017, Article 7(1) |
| VAT registration, voluntary threshold | AED 187,500 | Taxable supplies or taxable expenses | Cabinet Decision No. 52 of 2017, Article 8(1) |
| Excise, tobacco and tobacco products | 100% | Importers, producers, stockpilers | Cabinet Decision No. 197 of 2025, Article 10(1) |
| Excise, electronic smoking devices, tools and liquids | 100% | Importers, producers, stockpilers | Cabinet Decision No. 197 of 2025, Article 10(1) |
| Excise, energy drinks | 100% | Importers, producers, stockpilers | Cabinet Decision No. 197 of 2025, Article 10(1) |
| Excise, sweetened drinks at 5g to under 8g sugar per 100ml | AED 0.79 per litre | Importers, producers, stockpilers | Cabinet Decision No. 197 of 2025, Article 10(1) |
| Excise, sweetened drinks at 8g or more sugar per 100ml | AED 1.09 per litre | Importers, producers, stockpilers | Cabinet Decision No. 197 of 2025, Article 10(1) |
| Excise, sweetened drinks below 5g sugar per 100ml | AED 0 per litre | No charge arises | Cabinet Decision No. 197 of 2025, Article 10(1) |
| Customs duty | Commonly 5% of CIF value | Imported goods | GCC Common Customs Tariff |
| Dubai housing fee | 5% of annual rent | Residential tenants, via DEWA | Dubai Municipality published tariff |
| Dubai property transfer fee | 4% of property value | Buyers, on registration | Dubai Land Department published tariff |
Sources: Federal Decree-Law No. 47 of 2022, Federal Decree-Law No. 8 of 2017 and Cabinet Decision No. 52 of 2017, consolidated English texts on tax.gov.ae; Cabinet Decision No. 197 of 2025 as published by the Ministry of Finance. Federal figures read 4 August 2026. Dubai-level charges follow each authority’s own published tariff — confirm the current figure with the authority.
One drafting point is worth knowing before you plan around the AED 375,000. Article 3(1) of the Corporate Tax Law does not contain that number at all — it sets 0% and 9% either side of “the amount specified in a decision issued by the Cabinet at the suggestion of the Minister”. The threshold lives in that Cabinet decision, so it can be changed without amending the Decree-Law.
What the rates come to at three profit levels
The marginal structure is easy to state and easy to misapply, so here it is worked through. These are illustrative figures, not a prediction of any company’s liability.
| Taxable income | Taxed at 0% | Taxed at 9% | Corporate tax | Effective rate on total profit |
|---|---|---|---|---|
| AED 300,000 | AED 300,000 | AED 0 | AED 0 | 0% |
| AED 375,000 | AED 375,000 | AED 0 | AED 0 | 0% |
| AED 500,000 | AED 375,000 | AED 125,000 | AED 11,250 | 2.25% |
| AED 1,000,000 | AED 375,000 | AED 625,000 | AED 56,250 | 5.63% |
| AED 2,500,000 | AED 375,000 | AED 2,125,000 | AED 191,250 | 7.65% |
| AED 10,000,000 | AED 375,000 | AED 9,625,000 | AED 866,250 | 8.66% |
Illustrative arithmetic applying Federal Decree-Law No. 47 of 2022, Article 3(1). Assumes no free zone status, no small business relief election and no adjustments between accounting profit and taxable income.
Read down the last column and the marginal structure does the work you would expect: the effective rate creeps towards 9% but never reaches it, because the first AED 375,000 stays in the 0% band however large the profit gets. A Dubai company earning AED 500,000 is not paying 9% — it is paying 2.25% of its profit. That is the single most common misreading of the Dubai tax rate, and it makes a material difference to how an owner-managed business thinks about drawing profit or reinvesting it. It is also why the arithmetic behind the tax-free Dubai reputation survives contact with the corporate tax regime better than most people expect.
Why the rate is the least important number
Put all of this together and the striking thing is how modest and how public the rates are. There is nothing hidden in them, and nothing to negotiate.
Which is exactly why, in practice, the rate is where the least value lies. The rates are fixed for everyone. What varies from one business to the next — and what quietly decides whether you overpay, underpay or get it right — is the accounting underneath them. Taxable profit is only as reliable as the books it is drawn from. A free zone 0% claim is only as safe as the substance and records behind it. A VAT position is only as clean as the invoices and the input-recovery discipline supporting it. This is the whole reason we treat accounting and bookkeeping as the foundation of every tax outcome rather than an afterthought: fix the records, and the rates take care of themselves.
Bringing it together
For anyone trying to pin down the Dubai tax rate in 2026, the honest summary is that there isn’t one — there are several, and which apply depends on who you are. Individuals pay no income tax on salaries. Companies pay 0% up to AED 375,000 of taxable profit and 9% above it, with a conditional 0% for qualifying free zone income and a 15% top-up that only reaches the largest multinationals. Purchases carry 5% VAT, a short list of goods bears excise of up to 100%, imports usually meet 5% customs duty, and Dubai adds its own rent and property charges on top.
The rates are the simple part. Applying them to your actual figures, registering on time, and keeping records that stand up to a return or an audit is where the effort — and the savings — really sit.
That is usually the point at which owners start looking for help, and it is worth doing properly: our guide to choosing a tax consultant in Dubai sets out what the role covers, where an ordinary advisory firm ends and an FTA-registered tax agent begins, and the ten questions to ask before signing an engagement letter.
Velmont Crest is a DED-licensed UAE accounting firm providing advisory, preparation and compliance support to SMEs across Dubai mainland and the free zones — from corporate tax and VAT advisory through to monthly accounting and bookkeeping. Read more on our insights hub or get in touch via our contact page.
Disclaimer: Velmont Crest is a DED-licensed accounting firm providing advisory, preparation and compliance support services. We are not a law firm, the Federal Tax Authority, or an FTA-registered tax agent representing clients before the FTA. UAE tax rates, thresholds and rules change and depend on your specific facts — verify current requirements with the FTA and the Ministry of Finance, and consult a licensed professional for advice specific to your circumstances before acting.
References
Frequently asked questions
- What is the Dubai tax rate for a company compared with an individual?
- They are two different answers, which is why one Dubai tax rate never exists. An individual on a salary pays 0% — the UAE levies no personal income tax, and Dubai adds no emirate income tax on top. A company pays UAE corporate tax at 0% on taxable profit up to AED 375,000 and 9% on the excess, under Federal Decree-Law No. 47 of 2022, and it must register and file even when the expected liability is nil. Both then meet the same consumption layer: 5% VAT on most purchases, excise on a short list of goods, and roughly 5% customs duty on imports. Dubai's own charges — the 5% housing fee on residential rent and the 4% Land Department transfer fee — sit outside all of that.
- What is the tax rate in Dubai?
- There is no single tax rate, because 'Dubai tax' is really a small stack of separate taxes. Individuals pay 0% income tax on salaries and wages. Companies pay corporate tax at 0% on taxable profit up to AED 375,000 and 9% on the excess. Most goods and services carry 5% VAT. Excise tax of up to 100% applies to a short list of goods such as tobacco, vapes and energy drinks, while sweetened drinks now carry a sugar-based per-litre charge; imported goods usually attract customs duty of around 5%. Dubai also levies emirate-level charges, including a 5% housing fee on residential rent and a 4% property transfer fee. So the answer depends entirely on whether you are asking about a person, a company, a purchase or a property.
- Is there income tax in Dubai?
- No. The UAE does not levy a personal income tax on salaries or wages, so an employee in Dubai keeps their gross pay with no income tax deducted at source. There is also no separate emirate income tax. This is the single fact behind Dubai's tax-free reputation, and for individuals living on employment income it is broadly accurate. It does not mean the wider economy is untaxed — companies pay corporate tax, purchases carry VAT, and property and rent attract their own charges — but on personal earnings from employment, the rate genuinely is zero. Your own tax residency at home may still create obligations elsewhere, which is worth checking separately.
- What is the corporate tax rate in Dubai?
- The UAE corporate tax rate that applies in Dubai is 0% on taxable income up to AED 375,000 and 9% on taxable income above that threshold, under Federal Decree-Law No. 47 of 2022. It is a marginal rate, so only the slice of profit above AED 375,000 is taxed at 9%. The rate applies to financial years starting on or after 1 June 2023. Taxable income is not simply your bank balance or turnover — it starts from accounting profit prepared under IFRS and is then adjusted for specific tax rules. Registration and an annual return are required even where the expected liability is 0%.
- How much is VAT in Dubai?
- Value Added Tax in Dubai is charged at the standard UAE rate of 5%, in force since 1 January 2018 under Federal Decree-Law No. 8 of 2017. Some supplies are zero-rated at 0%, such as certain exports, and some are exempt, such as particular financial services and bare land. A business must register for VAT once its taxable supplies pass AED 375,000 in a twelve-month period, and may register voluntarily once they pass AED 187,500. Registered businesses charge 5% on their sales, reclaim the VAT they pay on eligible purchases, and pay the difference to the Federal Tax Authority through periodic returns.
- Do free zone companies pay tax in Dubai?
- They can, and many do. A Qualifying Free Zone Person can benefit from a 0% corporate tax rate on qualifying income, but it pays the standard 9% on income that does not qualify. The 0% is a status earned by meeting conditions — adequate substance, qualifying activities, transfer pricing rules and audited accounts — not an automatic benefit of holding a free zone licence. Free zone companies are also generally still within scope for VAT and must register once they cross the threshold. So a free zone address does not remove tax from the picture; it changes the conditions under which a reduced rate may apply, and those conditions have to be met and evidenced every year.
- Is there tax in Dubai?
- Yes, though not on personal earnings. Dubai has no personal income tax, so salaries are paid gross. Businesses pay corporate tax at 0% up to AED 375,000 of taxable profit and 9% above it. Most goods and services carry 5% VAT, a short list of products bears excise of up to 100%, and imports usually meet around 5% customs duty. Dubai adds its own emirate charges on top: a 5% housing fee on residential rent collected through the DEWA bill, and a 4% Land Department fee on property transfers. So the accurate description is a low, narrow tax system rather than no tax at all.
- Is there sales tax in Dubai?
- Not under that name. The UAE uses Value Added Tax, charged at 5% since January 2018, and it does the job a sales tax does in other countries — the difference is that VAT is collected at each stage of the supply chain, with registered businesses reclaiming the VAT they pay on eligible costs. There is no separate emirate sales tax in Dubai and no GST. If you are used to a US-style sales tax or an Indian GST, read the 5% VAT line on a UAE invoice as the equivalent charge.
Filed under: dubai tax rate, corporate tax, VAT, excise, personal income tax, UAE tax, customs duty, SME
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