"Tax-free" was always a simplification; since 2023 it is a myth with exceptions. Here is the full map — what exists, at what rate, and what genuinely still doesn't.
The UAE now runs a small, clearly bounded set of taxes rather than none. The headline is corporate tax at 9% on profit above AED 375,000 (0% below), VAT at 5%, excise of 50–100% on a short list of goods, and a 5% customs duty on mainland imports. A 15% DMTT reaches only very large multinational groups. What still doesn't exist matters just as much: no personal income tax, no capital-gains, dividend or inheritance tax for individuals. In our practice registering UAE companies, the surprise is never the 9% — it's the fee layer that "tax-free" always hid.
For most of its history the UAE genuinely had no federal business tax. That ended on 1 June 2023, when Federal Decree-Law No. 47 of 2022 introduced a federal corporate tax. The result is not a high-tax country — it's a low-tax country with a defined system, and that difference matters when you plan. Instead of "no tax", the honest description is: a handful of taxes, each with a clear rate and threshold, plus a layer of government fees that was always there.
This page maps the whole thing on one screen — what the UAE charges, at what rate, and, just as important, what it still doesn't touch at all. Nothing here is speculative; every figure is a current published rate.
The centrepiece is corporate tax. Taxable profit up to AED 375,000 is taxed at 0%; profit above it at 9%. The rate sits on net accounting profit adjusted for a short list of tax rules, not on revenue — a distinction that decides who actually pays.
Above the threshold, two routes still hold profit at 0%. Small Business Relief treats a resident business with revenue ≤ AED 3M as having no taxable income, for financial periods ending on or before 31 December 2026. And a Qualifying Free Zone Person pays 0% on qualifying income with no expiry, provided every substance, de-minimis and audit condition holds. The full logic — and the standard ways companies fall out of each — is in who still really pays 0%; model your own mix in the corporate tax calculator.
VAT is a flat 5%, among the lowest standard rates anywhere. Registration is mandatory once taxable turnover passes AED 375,000 over a rolling twelve months, and voluntary from AED 187,500. Exports of goods and services outside the GCC are generally zero-rated, and specific sectors (some healthcare, education, residential property) are zero-rated or exempt. The mechanics are covered in our VAT guide.
Excise tax targets a short list of goods on health grounds: 50% on carbonated and sweetened drinks, and 100% on tobacco products, energy drinks and electronic-smoking devices and liquids. If you don't trade those goods, excise never touches you.
Customs duty is a standard 5% on the CIF value of goods imported into the mainland, with many categories reduced or exempt. Goods that stay inside a free zone, or transit through one, are generally outside the duty until they enter the local market — one of the practical reasons trading companies choose a free zone.
From 2025 the UAE applies a Domestic Minimum Top-up Tax (DMTT) of 15%, aligning with the OECD Pillar Two global minimum. It reaches only multinational groups with consolidated revenue of EUR 750M or more in at least two of the four prior years. For an ordinary SME, a single-country business or a founder-owned company, the DMTT is simply out of scope — the 9% regime is the one that applies.
Put on one line, the entire UAE tax menu is short:
| Tax | Rate | What it applies to |
|---|---|---|
| Corporate tax | 0% / 9% | Profit; 0% up to AED 375,000, 9% above |
| VAT | 5% | Most goods and services; register above AED 375,000 turnover |
| Excise tax | 50% / 100% | Sweetened & carbonated drinks (50%); tobacco, vapes, energy drinks (100%) |
| Customs duty | 5% | CIF value of mainland imports (many exemptions) |
| DMTT | 15% | Multinational groups above EUR 750M revenue only |
| Property transfer fee | 4% (Dubai) | Real-estate transfers; split by custom between the parties |
| Personal income tax | 0% | Does not exist |
The absent taxes are why the UAE stays structurally attractive even at 9%. There is no personal income tax on salary or business drawings, no capital-gains or dividend tax for individuals, no inheritance or wealth tax, and no social-security contributions for expatriate staff (GCC nationals have their own pension schemes). A founder taking profit out of a UAE company meets one layer of tax at the company, not a second at the individual.
"No tax" never meant "no cost". The layer everyone forgets is government fees: municipality housing fees charged on residential and commercial rent, the 4% property-transfer fee in Dubai, tourism dirhams on hotel stays, and licence-issue and renewal fees that recur every year. None is called a tax, and together they are often the largest predictable line in a small company's budget.
Two operational shifts are worth planning for. E-invoicing is being introduced in phases from July 2026, moving B2B and B2G invoicing onto a structured, reported format — see our e-invoicing guide as the detail firms up. And with corporate tax now live, proper bookkeeping is no longer optional: every 0% position above depends on audited or at least defensible books. The honest number to compare between the UAE and anywhere else is the total cost of operating — rate plus fees plus compliance — not the headline rate alone.
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