Dubai is known for its tax-friendly environment, making it an attractive location for businesses and individuals. Here are the key points to consider:
Income tax
There is no personal income tax in Dubai. This means that income, salaries and wages are tax-free, making Dubai particularly attractive for expats and highly skilled professionals.
Value Added Tax (VAT)
Since January 2018, the UAE has imposed a 5% VAT. This applies to most goods and services, but certain areas such as health and education are exempt from tax or subject to a reduced rate.
Corporation tax
A 9% corporate tax has been introduced for companies from June 2023. However, this tax only applies to companies with an annual turnover of over AED 375,000. Smaller companies and start-ups are thus largely exempt from this tax.
Free zones
One of the biggest tax advantages in Dubai are the so-called free zones. Companies based in these zones benefit from various tax exemptions, including:
- No corporate tax for up to 50 years
- 100% foreign ownership allowed
- No import duties on goods and materials
Free zones are particularly attractive for international companies that want to expand their presence in the region without having to pay high taxes.
Conclusion
Dubai's tax system is designed to encourage investment and economic growth. With no income taxes, low VAT and tax benefits in free zones, Dubai remains a prime location for companies and professionals.
For further details and specific tax advice, it is advisable to consult a tax expert in Dubai.