The UAE taxes resident persons on worldwide income (including foreign-source income, subject to relief mechanisms such as the foreign permanent establishment exemption election and foreign tax credit described below) and non-resident persons on UAE-source income only, under its Corporate Tax regime (effective from June 2023, 9% standard rate on income above AED 375,000). The UAE operates a self-assessment system for corporate tax, administered by the Federal Tax Authority. Federal Corporate Tax applies uniformly at the same rate regardless of which of the seven emirates a company operates in; the real source of variation across the UAE is Free Zone versus mainland status, not emirate-by-emirate rate differences - see this site's Special Zones page for DMCC, JAFZA, and other UAE financial-center specifics.
The UAE tax year generally follows the taxable person's own financial year (Gregorian or otherwise). The corporate tax return filing deadline is 9 months after the end of the relevant tax period.
United Arab Emirates's headline corporate income tax (CIT) rate is 9%.
0% - the UAE does not levy personal income tax on individuals.
The standard VAT/GST (or equivalent consumption tax) rate is 5%.
Under Cabinet Decision No. 85 of 2022, an individual is a UAE tax resident via one of three routes: physical presence of 183 days or more in any 12-month period; 90 days or more combined with UAE/GCC nationality or a valid residence permit plus a permanent home or employment/business in the UAE; or a "primary residence/center of financial interests" test. A company is resident if incorporated in the UAE, or if a foreign entity is effectively managed and controlled from the UAE. Note that domestic tax residency and eligibility for a treaty-purpose Tax Residency Certificate are not the same threshold - the Federal Tax Authority generally still requires 183 days of physical presence for a TRC even where the 90-day or center-of-interests route established domestic residency. The UAE has no personal income tax; residency mainly matters for accessing corporate tax rules and treaty benefits.
A non-UAE entity has a UAE permanent establishment through a fixed place of business or a dependent agent habitually concluding contracts in the UAE on the entity's behalf, following the OECD Model Treaty definition as incorporated into the UAE's Corporate Tax Law and modified by any applicable tax treaty.
The UAE has no Controlled Foreign Company regime, per Chambers and Partners. A UAE company's foreign subsidiary income is not attributed back to the UAE parent; foreign-subsidiary income is taxed only in its own jurisdiction, with UAE tax arising only if and when profits are actually repatriated or connected to UAE economic activity. (Note: this cuts the other way for outbound investors - a UAE company controlled by a resident of a jurisdiction with its own CFC rules, such as Germany, the UK, or the US, can still trigger CFC attribution in that home country, taxing the shareholder there on undistributed UAE income.)
The UAE has no formal debt-to-equity thin capitalization rule. Instead, under Article 30 of the Corporate Tax Law, net interest expenditure is deductible up to the greater of 30% of tax-adjusted EBITDA or AED 12 million; disallowed interest carries forward for the following 10 tax periods. The rule does not apply to banks, insurance businesses, other regulated financial entities, or natural persons. Interest on related-party loans used to fund dividends, share buybacks/capital reductions, capital contributions, or acquisitions of related-party ownership interests is denied deduction entirely, separate from the general limitation.
The UAE does not use an elective check-the-box classification system; entity classification generally follows the entity's actual legal characteristics under UAE Corporate Tax Law. The UAE's Corporate Tax Law includes a 30%-of-EBITDA interest limitation rule for related-party loans and a 15% Domestic Minimum Top-Up Tax for in-scope multinationals under Pillar Two, but does not have a comprehensive ATAD2-style anti-hybrid regime.
No foreign bank account or foreign financial asset reporting regime exists in the UAE requiring residents to separately disclose foreign accounts.
The UAE provides a participation exemption under its Corporate Tax Law for qualifying dividends and capital gains from a foreign subsidiary, generally requiring at least a 5% ownership interest held for a continuous minimum 12-month period, and (per specialist sources) the underlying foreign entity being subject to a corporate tax rate of at least 15% in its home jurisdiction for the exemption to apply cleanly.
The UAE's Corporate Tax Law provides a foreign tax credit for foreign tax paid on income also subject to UAE corporate tax, capped at the UAE tax otherwise due on that income - though given the UAE's participation exemption and generally low effective-tax environment, this mechanism has narrower practical application than in higher-tax jurisdictions.
The UAE maintains one of the world's most extensive treaty networks: 137 Double Taxation Agreements in force, per the UAE Ministry of Finance's own site (dated April 2026) - 193 when separate Bilateral Investment Treaties are counted alongside the DTAs. The UAE has no comprehensive income tax treaty with the United States.