Tax in the UAE: VAT, income tax, company tax, capital gains

VAT in UAE

GCC value-added model: 5% on most supplies, with zero-rating for exports and some sectors.

Standard rate

5%

Local name

VAT — Value Added Tax

Type

VAT

Reduced rates

None on record

Registration threshold

AED 375,000 (mandatory); 187,500 voluntary

Filing

Quarterly or monthly

Authority

Federal Tax Authority

Current rate since

1 January 2018

Company tax in UAE

The headline corporate income tax rate is 9%. In effect since 1 June 2023.

Federal Corporate Tax (Federal Decree-Law No. 47 of 2022) for financial years starting on or after 1 June 2023. Qualifying Free Zone Persons: 0% on qualifying income. The u.ae page still says a different rate 'not yet specified' for large MNEs; the UAE has since introduced a 15% Domestic Minimum Top-up Tax from 2025 (not read on an official page this session). Emirate-level taxes on oil/gas and foreign bank branches are separate. | Cross-check: OECD 2026: central statutory CIT 9%, combined (central+sub-central) 9% Reduced rate 0%, not modelled as a small-company rate: 0% on the first AED 375,000 of taxable income (a band available to all taxable persons, not only small businesses). Separately, Small Business Relief (revenue <= AED 3m) treats eligible persons as having no taxable income (not read this session)..

UAE company tax calculator →

Did you know? UAE tax facts

• VAT was the UAE's first-ever broad federal tax — a country famous for charging residents no income tax began taxing nearly everything they buy on a single day, 1 January 2018.

  Introduced under Federal Decree-Law No. 8 of 2017 to diversify revenue away from oil; the UAE still levies no personal income tax on residents.

  Source: UAE Ministry of Finance ↗

• At 5%, the UAE has one of the lowest standard VAT rates on Earth — undercut only by a handful of places like Andorra's 4.5%, and a fraction of Hungary's world-topping 27%.

  Most national standard VAT rates sit between 15% and 27%; EU law forbids members from going below 15%.

  Source: VATupdate – Global VAT Rates by Country 2026 ↗

• The 5% rate was never a UAE decision alone — it was locked in by a treaty: the 2016 GCC Unified VAT Agreement that bound all six Gulf states to a common framework, with the UAE and Saudi Arabia flipping the switch together on 1 January 2018.

  Saudi Arabia later broke ranks and tripled its rate to 15% in July 2020 to plug a COVID-era deficit; the UAE kept its 5%.

  Source: ZATCA (Saudi tax authority) – GCC Unified VAT Agreement ↗

• Certain UAE free zones are legally treated as being 'outside the State' for VAT — so a warehouse a few kilometres from Dubai's centre can sit in tax-no-man's-land for goods, yet still be 'inside' the UAE the moment you sell a service there.

  These 'Designated Zones' (about 23 of them) must be fenced with customs and security controls; goods within them are outside VAT scope but services are taxed at 5%.

  Source: UAE Federal Tax Authority – Designated Zones VAT Guide ↗

• Gold creates a VAT split personality: investment-grade bars and coins of 99%+ purity are zero-rated, but the gold necklace next to them is taxed at the full 5% — including the jeweller's making charges.

  Since Feb 2025 (Cabinet Decision 127 of 2024, effective 15 February 2025) a reverse-charge mechanism means VAT-registered businesses trading precious metals and stones don't charge each other VAT at the till; the buyer self-accounts in their return.

  Source: ClearTax – VAT on Gold in UAE ↗

• The UAE introduced its first federal corporate tax for financial years starting on or after 1 June 2023: 0% on taxable income up to AED 375,000 and 9% above it.

  Wikipedia: '0% for Taxable Income not exceeding AED 375,000' and '9% for Taxable Income exceeding AED 375,000'; 'The UAE Corporate Tax Regime became effective for financial years starting on or after 1 June 2023'; Qualifying Free Zone Persons and Small Business Relief can keep the 0% band.

  Source: Wikipedia — Taxation in the United Arab Emirates · checked 10 October 2026 ↗

• The UAE 'does not levy income tax on individuals', in the words of its official government portal; the federal taxes are the 5% VAT, excise tax on goods deemed harmful to health, and the corporate tax.

  The UAE Government portal (u.ae): 'The UAE does not levy income tax on individuals'; the UAE 'levies 5 per cent value added tax on the purchase of goods and services'; excise tax applies to 'specific goods that are harmful to health'; corporate tax is charged 'on the net income or profit of corporations and other entities from their business'.

  Source: The United Arab Emirates Government portal — Taxation · checked 10 October 2026 ↗

More stories, for every country that has one, on the tax facts page.