The United Arab Emirates remains one of the most attractive jurisdictions for business, investment and relocation thanks to its favorable tax system. In this guide we’ll look at all the key taxes in the UAE: real estate, income, VAT, corporate levies, and the new 2025 changes.
Key advantages of the UAE tax system
- There is no income tax for individuals.
- No capital gains tax (on the sale of assets, including real estate).
- No tax on dividends, interest and royalties.
- Low corporate tax rates (from 0% to 9%).
- VAT is only 5% (and not on all goods).
- Agreements with 142 countries on avoidance of double taxation.
Last Modified (2025):
- New agreement with RF (reduced rates on dividends – 15%, interest – 10%).
- Dubai retains a 4% transfer fee on real estate purchases.
Taxes for individuals
1. Income tax
- 0% – for residents and non-residents (salaries, investment income, rent).
- Exception: tax on oil and gas revenues (for local companies).
2. Real estate tax
| Type of payment | rate | Note |
|---|---|---|
| Transfer Fee (on purchase) | 4% (Dubai), 2% (Abu Dhabi) | Shared between buyer and seller |
| Municipal fee (rent) | 5% of the annual rental value | Only if the dwelling is rented |
| Possession tax | 0.25% of cadastral value | Charged in some emirates |
3. VAT for individuals
- 5% on commercial real estate, electronics, services.
- 0% on residential real estate, food, medicine, education.
Corporate taxes (2025)
1. prime rate
- 9% – for companies with revenue > 375,000 AED (~$102,000).
- 0% – if income < 375,000 AED.
2- Benefits in free zones (free zones)
- 0% corporate tax for 50 years (for IT, fintech, trading companies).
- 100% foreign ownership (no local sponsor).
3. VAT for business
- 5% is the standard rate.
- 0% – export, international transportation.
Real estate taxes: a complete breakdown
1. Purchase
- 4% (Dubai), 2% (Abu Dhabi) – registration fee.
- +2% – realtor fees (usually paid by the seller).
2. Possession
- 0% – if you do not rent.
- 5% (Dubai) is a municipal levy on rent.
3. Selling
- 0% income tax (for individuals).
- Penalty of 1-5% – if you sell in the first 2-3 years (depends on the developer).
Read also: How to protect your investments in the UAE: strategies and recommendations
How to become a UAE tax resident?
The UAE offers some of the most favorable conditions for tax residents: zero income tax, no levies on dividends and capital gains, and protection from double taxation. But how to get this status?
Options:
- Living 183+ days a year is the easiest way.
- Get a residence permit through:
- Purchase of real estate (from 750,000 AED).
- Opening a company in the free zone.
- A job in the UAE.
What does residency give you?
- 0% on income (including dividends).
- Access to favorable mortgages (from 3% per annum).
- Protection from double taxation (under agreements with 142 countries).
Read also: How to choose the right real estate developer in Dubai: The Complete Guide 2025
Conclusion: is it worth moving or investing?
Pros of the UAE
- One of the lowest tax burdens in the world.
- Stable real estate market (rental yield of 5-10% per annum).
- Ease of doing business (company registration in 3 days).
Risks
- Hidden costs (service charges, refrigeration).
- Restrictions for non-residents (freehold real estate only).
Bottom line: the UAE is an ideal choice for investors, IT specialists and entrepreneurs, especially given the new agreements with the Russian Federation.