Corporate Tax in Dubai

Dubai is now among the most popular destinations and it has become an attractive place for foreign investors because, along with the luxurious lifestyle that it offers, it is considered to be a tax-free city. But what does that mean, exactly? Now, we’ll try to answer some of the questions that we, as one of the accounting firms in Dubai, might be asked. We mention that our experienced team of accountants in Dubai is at your disposal with varied services (audits, annual financial statements, payroll, etc.)

Measures taken by Dubai authorities

On some level, Dubai is a tax-free city, but there are a few circumstances in which taxation will be applied, in one form or another. The UAE wanted to introduce the income tax for a while, in 2010, when headlines spoke of taxes that Dubai residents would have to pay. Instead, the rumor turned out to be imposed measures to collect fees regarding ID cards (Emirates) and car registration. The UAE (United Arab Emirates) Government does not impose income taxes to individuals living in the country, but companies have paid a 9% federal corporate tax on taxable income above AED 375,000 for financial years starting on or after 1 June 2023. Also, if a citizen is registered in other countries, for taxation purposes, and is also making profits in Dubai, he or she may be required to pay a few taxes. For more information about this system, you can talk to our advisors regarding any accounting services in Dubai.

Short facts about the tax system in Dubai

Besides the UAE taxation system, each emirate has its own system in place. Since June 2023, the federal UAE corporate tax applies in Dubai at 9% on taxable profits above AED 375,000 (Small Business Relief for revenue up to AED 3 million until 2029; 15% top-up tax for large multinational groups from 2025) (approx. USD 100,000). The following companies will still pay a separate corporate tax:

•     companies, within Dubai, which are operating in the oil and gas industry,
•     the branches of all foreign banks that are operating in Dubai.

The branches of the foreign banks are imposed to pay a 20% corporate tax rate, although the Dubai oil and gas companies have a 55% tax rate that is applied to the profits of the company. 

Levied taxes in Dubai

Since January 2018, the VAT rate of 5% was imposed for companies selling particular products and services in Dubai, under Federal Decree-Law No. 8 of 2017 on VAT. However, healthcare and education services, the exports, the supply of residential properties, and international transportation services are zero-rated (0%), while residential property after its first supply, local passenger transport and certain financial services are exempt. As for the automotive sector, jewelry and electronics, the VAT rate of 5% is applicable, just like for rental or sale of commercial buildings in Dubai. Here is what you need to know about taxes imposed by the Dubai authorities:

•     a municipal tax of 5% is required on the rental of any residential property within Dubai;
•     10% municipal tax is applied on the rental prices of the commercial real estate;
•     a municipality fee of 7% applies to hotel bills (plus a 10% service charge and the per-night Tourism Dirham) (including all entertainment facilities).    

Also good to know for all foreign investors is that, within the Emirate, bringing or buying alcohol in the country has different other tax rates applied. 

The services of an audit firm in Dubai are recommended to company owners in this city. With the help of our experts who know the legislation in this regard, annual financial statements can be analyzed, and then complete and correct financial reports will be drawn up. The latter can reveal the financial position of a company. We also emphasize that company directors or managers are the ones who can approve the reports presented by our specialists.

The corporate tax in Dubai International Financial Centre

DIFC or Dubai International Financial Centre is one of the most prolific business destinations in Dubai and the preferred location for foreign investors who want to expand their portfolios in this area. Branches of foreign banks operating in Dubai are subject to Dubai Law No. 1 of 2024 (DIFC-licensed banks are excluded for DIFC income; federal corporate tax paid is deducted) that says the corporate tax of 20% rate is imposed on the generated incomes. It is important to know that non-regulated companies that have a commercial license are not subject to import and export duties, no fees on profit repatriation and a 0% federal corporate tax rate only on qualifying income if they meet the Qualifying Free Zone Person conditions (other income is taxed at 9%). Besides that, the double taxation agreements are available in Dubai International Financial Centre, protecting businesses from double taxation. If you would like to know more about the taxation of companies in DIFC, we kindly remind you that you can talk to one of our accountants in Dubai. They are also at your disposal if you are interested in audits in Dubai.

Taxation in Dubai free trade zones

Dubai offers the most attractive tax system and the possibility for investors to enjoy their profits with a series of tax exemptions, including in the free trade zones under certain circumstances. The exception refers to the companies operating in the oil and gas sector, a field in which emirate-level tax rates of up to 55% apply under concession agreements. Companies established in Dubai’s free trade zones are subject to the federal corporate tax, but a Qualifying Free Zone Person pays 0% on qualifying income provided that certain condition are met (set by Cabinet Decision No. 100 of 2023 and Ministerial Decision No. 265 of 2023: adequate substance, qualifying activities, de minimis limit, audited accounts). More than that, foreign companies activating in one of the prolific free trade zones of Dubai may hold free zone guarantees of up to 50 years, which do not override the federal corporate tax. The double taxation treaties signed by the UAE with countries worldwide (China, France, Greece, Israel, Switzerland, Belgium, Canada, Italy, Germany, Austria, Poland to mention a few) apply to enterprises established in Dubai’s free trade zones.

The Tax Registration Number in Dubai

The introduction of VAT came with a series of rules and regulations, among which, the requirement of obtaining the TRN or the Tax Registration Number through which a company can be identified from a tax point of view. The Tax Registration Number and the VAT certificate are necessary for companies with future operations in Dubai. The tax laws in the UAE might look complex for international entrepreneurs who do not have a complete idea about the new taxes imposed, so the assistance and guidance of our Dubai accountants will prove extremely helpful. Please feel free to talk to one of our advisors and let them tell you more about the taxation in Dubai.

Making investments in Dubai

Dubai is one of the most representative and appreciated business destinations in the world and a top choice for international financiers who want to generate large profits in sectors like tourism, real estate, oil & gas, import and export, logistics, manufacturing, automotive, media and entertainment, public relations, digital technologies, food & beverage, etc. The business opportunities are huge in most of the sectors, so the attraction for investments in the UAE is quite powerful. Investors from India, the UK, the USA, Saudi Arabia, and France made important investments in sectors like manufacturing, real estate, import, and export, but not limited to these. It is important to know that 33% of the UAE’s GDP registered in 2017 and 2018 was sustained by foreign direct investments. Below you can find other interesting facts and details about the economy and business direction of the UAE:

1. According to UNCTAD's World Investment Report 2026, the UAE ranked 9th worldwide for FDI inflows in 2025 (the Doing Business report was discontinued in 2021).
2. The UAE's FDI stock reached about AED 1.17 trillion at the end of 2025.
3. 1,562 greenfield FDI projects were announced in the UAE in 2025, the second-highest number worldwide.
4. Most of the FDIs are directed in sectors like real estate, construction, manufacturing, insurance, finance.
5. Approximately USD 48.3 billion was the total FDI inward flow in 2025.
6. Experts in economy anticipate growth of up to 20% in FDI for the years to come. 

Frequently Asked Questions

Our accounting specialists have prepared a set of questions for those interested in corporate tax in Dubai. It is important to know from the beginning what kind of taxes are imposed in the business climate in the UAE, and then know what you have to pay in the future. We invite you, therefore, to discover some of these questions and answers, which will be useful to you before collaborating with our team.

1. Which companies have to pay corporate income tax in Dubai?
Companies registered in the banking sector, but also those in oil & gas must take into account the corporate income tax. These sectors are not the only ones where this tax is imposed in the UAE. All other businesses have fallen under the federal corporate tax rules which provides for a 9% levy starting with June 2023.

2. What is the corporate tax for companies operating in the banking field?
20% is corporate income tax for branches of foreign banks. Therefore, the holders of financial institutions of this kind must consider this tax, if they intend to open a subsidiary in the UAE, respectively in Dubai.

3. What corporate income tax is imposed on companies that conduct oil & gas operations in the UAE?
Enterprises with oil & gas activities are subject to a special tax regime. In this sense, the branches must pay a corporate income tax of 55%, applied to the company’s profits.

4. What taxation system is applied for companies registered in DIFC?
Companies operating in Dubai International Financial Center pay 0% corporate tax only on qualifying income (Qualifying Free Zone Person regime), provided certain requirements are met. Other income is taxed at 9%; Dubai's 20% foreign bank tax does not apply to DIFC-licensed banks for DIFC income.

5. Is there a corporate tax for import and export companies in DIFC?
Not as such: DIFC companies are within the federal corporate tax (0% only on qualifying income of Qualifying Free Zone Persons) and are not exempt from paying corporate income tax for 50 years under specific conditions. This is a major benefit for international players who want to open their business in DIFC. More in this sense can be discussed with our accountants in Dubai.

6. What corporate tax applies to companies registered in Dubai free trade zones?
Emirate-level tax rates of up to 55% apply to companies in the oil & gas (extraction) sector, even if they are registered in Dubai free trade zones. In the case of companies operating in other fields, except banking, they pay 0% corporate tax only on qualifying income as Qualifying Free Zone Persons (otherwise 9% above AED 375,000) if certain requirements are met, a benefit offered by the business climate in the UAE.

7. How can double tax treaties help companies that pay corporate income tax in the UAE?
The UAE has signed a series of double tax agreements with which it offers protection against double taxation of profits. In addition, tax evasion can be avoided with the help of these treaties.

8. What activities must be registered in the UAE for the payment of taxes?
All companies with activities in the UAE must be registered for taxation. Even if the taxation system in the UAE is beneficial, registration must be done because corporate tax registration has been mandatory for all juridical persons since 2023 (late registration penalty AED 10,000).

9. Why Dubai is an attractive destination for foreign investors?
Dubai is a top destination for foreign entrepreneurs who want to enjoy a great tax system. With the 9% corporate income tax in force since June 2023, investors will still benefit from very advantageous business conditions.

10. How can I register for paying taxes in the UAE?
Our accountants in Dubai are at your disposal with specialized assistance and support if you want to open a company and register it for taxation. We remind you that the UAE has applied VAT since 2018 and corporate tax since June 2023, and therefore, it is necessary to register the company from this point of view.

The services of our accountants in Dubai

Foreign investors who want to open their business in Dubai should consider the complete accounting services offered by our specialists. Registration for the purpose of paying taxes, bookkeeping, payroll, annual financial statements, audits in Dubai are some of the accounting services that can benefit both local and international entrepreneurs.

Even if an entire accounting department can be set up in a company, it would be advisable to consider the advantages of hiring the services offered by our accountants. In this sense, the costs of such a department and those of a team of experienced accountants in Dubai can be weighed. In addition, entrepreneurs who decide to work with us can benefit from personalized offers, depending on the needs of the company and beyond. So, you can rely on professionalism, experience, and transparency when working with our team of accountants in Dubai.

The registration for tax purposes, if it is the case, might seem complex for some entrepreneurs. One of our consultants can give proper support and tax advice at any time. In case you are looking for accountants in Dubai or audit firms in the city and for any other details regarding the taxes applied within the UAE, do not hesitate to contact us. We can also help you with company formation in Dubai.