Considering relocating your business to Dubai or establishing a new company there? It’s crucial to understand Dubai’s corporate tax landscape. This article clearly explains taxation rules, from personal income to business taxes.
Corporate tax rules in Dubai
Since June 2023, companies in Dubai have been required to pay corporate tax. If your business earns over 375,000 AED annually, you’ll pay 9% tax on amounts exceeding this threshold. Not all companies are automatically subject to this tax – certain government entities, non-profits, or investment vehicles may be exempt. Check the FTA’s Corporate Tax General Guide to verify if your business qualifies for exemptions.
Tax rules vary by business location type, with key differences between “mainland” and “free zone” companies.
Mainland vs. Free Zone: key differences
- Mainland companies: Can operate freely across the UAE but pay 9% corporate tax on profits above 375,000 AED
- Free zone companies often enjoy tax exemptions when operating within their zone or internationally. Trading with the mainland subjects them to standard tax rules.
Free zone businesses must qualify as a Qualifying Free Zone Person (QFZP) by meeting requirements like economic presence, approved activities, and proper FTA reporting. Non-compliance or mainland dealings void the exemption.
Personal income tax in Dubai
Dubai imposes no personal income tax on business profits or salaries, whether you’re a sole proprietor or paying yourself through a corporate structure. This makes Dubai attractive for entrepreneurs.
Wealth tax in Dubai
Dubai does not impose a wealth tax on savings, investments, or cryptocurrency. However, if you maintain Dutch residency/income sources (rent, dividends, etc.), the Dutch tax authority may still consider you taxable. Even after deregistering, strong personal or economic ties to the Netherlands (such as property, spouse, or business activities) may still maintain your tax residency. Professional advice is essential.
Other taxes in Dubai
- 5% VAT on most goods/services since 2018
- Tourism/municipal fees for hotels/restaurants
- 4% property transfer tax on real estate purchases
Compliance requirements
Even tax-exempt businesses must maintain proper accounting (financial statements, VAT returns, FTA reporting). Local accountants should handle:
- Economic Substance Regulations (ESR) compliance
- Ultimate Beneficial Owner (UBO) registration
- Other UAE compliance obligations
FAQs
Is Dubai truly tax-free?
For individuals: largely yes (no income/wealth tax). For businesses:
- Mainland: 9% corporate tax >375,000 AED (~€95,000)
- Free zones: Exempt only for intra-zone/international business
Can you transfer tax-free money to the Netherlands?
Possible, but Dutch tax rules may still apply to Dutch assets/income. Consult a cross-border tax specialist.
Do you need to file Dutch taxes?
Depends on fiscal residency. No filing is typically required after deregistration if no Dutch income is due.
More information?
Visit the Federal Tax Authority (FTA) website for corporate tax, VAT, and free zone exemption details.
Starting a business in Dubai? We can help!
AdamoDigi assists Dutch companies expanding to Dubai and the Gulf region – from strategy and market knowledge, to paperwork, contacts, and visibility.
