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  • Residence and basis for taxation

    Companies incorporated in the UAE are considered tax residents. For the application of any of the UAE's Double Tax Treaties, a company can obtain a Tax Residency Certificate, provided it meets the relevant conditions.

    Last modified 1 Jan 2022

  • Taxable income

    There is currently no federal UAE corporate income taxation. The existing income tax decrees at Emirate level (the UAE consists of 7 Emirates, including Abu Dhabi and Dubai) are not applied in practice.

    Currently, income taxes are only imposed at Emirate level on the following:

    • Oil and gas producing companies and
    • Branches of foreign banks.

     Over the past years, there have been discussions to introduce corporate income tax at the UAE federal level, although this has not yet materialized in any proposed legislation.

    Last modified 1 Jan 2022

  • Tax rates

    Oil and gas producing companies pay tax in the form of royalties as per specific government concession agreements, which are confidential.

    Branches of foreign banks are subject to income tax at a rate of 20 percent.

    Last modified 1 Jan 2022

  • Tax compliance

    Only oil and gas producing companies and branches of foreign banks are required to register with the tax authorities and file tax returns.

    Last modified 1 Jan 2022

  • Alternative minimum tax

    Not applicable for this jurisdiction.

    Last modified 1 Jan 2022

  • Tax holidays, rulings and incentives

    The UAE has a large number of Emirate-instated Free Zones where the usual mainland foreign ownership restrictions do not apply. Entities registered in the Free Zones are not liable to pay tax at the Emirate level for a specific period. Free Zone entities may either be exempt from tax or subject to a 0-percent tax rate, depending on the regulations in the specific Free Zone.

    Last modified 1 Jan 2022

  • Consolidation

    Not applicable for this jurisdiction.

    Last modified 1 Jan 2022

  • Participation exemption

    Not applicable for this jurisdiction.

    Last modified 1 Jan 2022

  • Capital gain

    At present, there is no capital gains taxation in the UAE. For taxpaying entities, such as oil and gas-producing companies, capital gains are taxed as part of business profits.

    Last modified 1 Jan 2022

  • Distributions

    No specific tax rules apply in relation to distributions by UAE companies.

    Last modified 1 Jan 2022

  • Loss utilization

     Branches of foreign banks may carry forward losses for a limited number of years, depending on the Emirate of establishment. For other companies, loss utilization is not applicable in the UAE.

    Last modified 1 Jan 2022

  • Tax-free reorganizations

    Not applicable for this jurisdiction.

    Last modified 1 Jan 2022

  • Anti-deferral rules

    Not applicable for this jurisdiction.

    Last modified 1 Jan 2022

  • Foreign tax credits

    Not applicable for this jurisdiction.

    Last modified 1 Jan 2022

  • Special rules applicable to real property

    Not applicable for this jurisdiction.

    Last modified 1 Jan 2022

  • Transfer pricing

    Not applicable for this jurisdiction.

    Last modified 1 Jan 2022

  • Withholding tax

    Not applicable for this jurisdiction.

    Last modified 1 Jan 2022

  • Capital duty, stamp duty and transfer tax

    A Real Estate Transfer Fee (RETF) is applicable to transfer of real property at rates which differ per Emirate. In Dubai, the total RETF is 4 percent and is equally shared between seller and buyer. The rates in most other Emirates are lower than in Dubai.

    Last modified 1 Jan 2022

  • Employment taxes

    Social security

    Social security is only applicable to UAE and other GCC nationals (ie, UAE and GCC passport holders).

    End of service benefits

    According to the UAE labor law, all employees who complete a period of continuous service that is longer than 1 year are entitled to a gratuity computed and accrued by employers according to either Emirate- or Free Zone-specific regulations.

    Last modified 1 Jan 2022

  • Other tax considerations

    Value Added Tax

    The UAE introduced value added tax (VAT) on January 1, 2018. The VAT regime is loosely based on the EU VAT system with a number of notable differences. The UAE VAT applies to most supplies of goods and services, including the import of goods and services. The standard VAT rate is 5 percent. For specific activities, a zero rate applies (such as on exports), whereas other activities may be exempt (such as financial services).

    Customs Duty

    The UAE is a member of the Gulf Cooperation Council's (GCC) Customs Union, which is governed by the GCC Customs Law. The GCC Customs Union is based on the principle of a single entry point upon which all customs duty on foreign imported goods is collected. Under the GCC Customs Law, customs duties (if any) are levied over the customs value of the foreign imports (eg, the Cost, Insurance and Freight, or CIF, value).

    Last modified 1 Jan 2022

  • Key contacts
    Ton van Doremalen
    Ton van Doremalen
    Partner and Head of Tax, Middle East DLA Piper Dubai [email protected] T +971 4438 6127 View bio
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Taxable income

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United Arab Emirates

There is currently no federal UAE corporate income taxation. The existing income tax decrees at Emirate level (the UAE consists of 7 Emirates, including Abu Dhabi and Dubai) are not applied in practice.

Currently, income taxes are only imposed at Emirate level on the following:

  • Oil and gas producing companies and
  • Branches of foreign banks.

 Over the past years, there have been discussions to introduce corporate income tax at the UAE federal level, although this has not yet materialized in any proposed legislation.

Last modified 1 Jan 2022

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