UAE taxes 2026: 0% income tax, 9% Corporate Tax and what a resident should know

The UAE remains one of the few jurisdictions with zero personal income tax. At the same time, a 9% Corporate Tax has applied since 2023, and 5% VAT has existed since 2018. This article gives the full picture of the tax system for a resident: what is actually paid and why you need a Tax Residency Certificate.

It is useful for those considering a move to the UAE, already working through a free zone or receiving income from abroad who want to understand their obligations to the local tax authority. The taxes and reporting of the company itself are covered separately: UAE company taxes and accounting.

0% income tax: what it means in practice

The UAE has no personal income tax. This applies to all types of income: salary, dividends, interest on deposits, rental income from property and gains on the sale of assets. The rate is 0%, with no exceptions and no upper threshold.

In practice, a salary of AED 15,000 a month is exactly the amount that reaches your account. There is no annual income tax return and no tax deductions, because there is nothing to deduct.

This is what makes the Emirates attractive to well-paid professionals and entrepreneurs. In Russian-speaking relocation chats, the absence of income tax is one of the main arguments for the UAE, even with the high cost of living (according to the chats, the minimum budget for one person starts at AED 11,000 a month).

Important: zero income tax in the UAE does not release you from tax obligations in your home country if you remain a tax resident there. Check the rules of your country with a tax adviser.

9% Corporate Tax: who pays, threshold, free zones

Since 1 June 2023, the UAE has had a federal Corporate Tax. Key parameters:

• 0% rate on taxable income up to AED 375,000 (~USD 102,000) a year
• 9% rate on income above AED 375,000
• Domestic Minimum Top-up Tax for multinational groups with global revenue of EUR 750 million or more (in two of the four previous years), for financial years starting on or after 1 January 2025 (OECD Pillar Two rules)

The tax applies to profit, not revenue. Company expenses are deducted from the tax base in the usual way.

Who it applies to

Corporate Tax applies to:

• Companies registered on the UAE mainland
• Companies in free zones, with caveats
• Individuals doing business (if annual turnover exceeds AED 1 million)
• Foreign companies with a permanent establishment in the UAE

For an ordinary salaried employee, Corporate Tax does not apply: it concerns only companies and entrepreneurs.

Free zones: 0% on qualifying income

Companies in free zones (free zone persons) can keep the 0% rate on qualifying income if they meet a number of conditions:

• Real economic activity in the UAE (substance requirements): an office, staff and expenses in the country
• Income from transactions with other free zone companies or from operations outside the UAE (qualifying income)
• Transactions with mainland companies are taxed at the standard 9% rate
• Compliance with the arm's length principle (market prices between related parties)

If even one condition is not met, the company loses Qualifying Free Zone Person status and pays 9% on all profit above AED 375,000.

According to Russian-speaking expat chats (January–July 2026), a free zone licence costs AED 1,000 to 10,000 depending on the zone (SHAMS, IFZA, Meydan, RAKEZ) and the type of activity. More on choosing a free zone and costs in the article Free zones, freelancing and work in the UAE 2026.

5% VAT: what is taxed and what is not

Value added tax (VAT) has applied in the UAE since 1 January 2018. The standard rate is 5%.

Subject to 5% VAT

• Most goods and services within the UAE
• Imports of goods
• Electronic services supplied from abroad to consumers in the UAE

Taxed at 0%

• Exports of goods and services outside the UAE
• International transport
• The first sale or lease of residential property
• Certain educational services
• Certain healthcare services

Exempt from VAT

• Rent of residential property
• Some financial services
• Bare land
• Local passenger transport

VAT registration is mandatory for companies with annual turnover above AED 375,000. Voluntary registration is possible with turnover above AED 187,500.

In everyday life, 5% VAT is a minimal burden: with monthly spending of AED 10,000, the tax comes to about AED 500 (part of which falls on zero-rated goods).

Tax Residency Certificate: why and how to get it

The Tax Residency Certificate (TRC) is a document confirming your tax residence in the UAE. It is needed for:

• Applying reduced rates under double tax treaties
• Confirming your tax status to foreign counterparties and banks
• Opening accounts and carrying out transactions where proof of residence is required

Conditions for a TRC

• Individual: according to advisers, at least 183 days in the UAE in 12 months (or 90 days with a residence visa and permanent housing or a job/business in the UAE)
• Company: a company registered in the UAE (requirements on tax.gov.ae)
• Filed through the FTA portal (tax.gov.ae)
• Processing time and fee: according to the current FTA tariff on tax.gov.ae

What a TRC gives you

With a TRC, you can:

• Apply to the tax authorities of another country for treaty benefits
• Use it as evidence of tax domicile in disputes

Without a TRC, proving UAE tax residence to foreign authorities is much harder. Getting a TRC starts with a residence visa; more on the routes on the UAE residence support page.

An expat employee in the UAE pays neither income tax nor social contributions. The employer does not pay social contributions for foreign employees, only for UAE nationals (contributions to the GPSSA state pension fund).

This is one reason why salaries in the UAE are often quoted "net": for expats there is no difference between gross and net.

If you are planning a move to the UAE and want to understand the financial side, from bank accounts to transfers, see the article Money in the UAE 2026: banks, cards, exchange, transfers.