The UAE is famous for low taxes, but "tax-free" needs footnotes since the introduction of corporate tax. Here is the 2026 picture.
VAT — 5%
VAT applies to most goods and services supplied inside the UAE. Registration is mandatory once taxable turnover exceeds 375,000 AED per year (voluntary from 187,500 AED). Late registration triggers fines starting at 10,000 AED.
Corporate tax — 9%
Since 2023, UAE business profit above 375,000 AED per year is taxed at 9%. Below that threshold — 0%. Qualifying Freezone income can remain at 0% provided the substance and activity conditions are met.
Personal income
There is still no personal income tax in the UAE — salaries, dividends and capital gains of individuals are not taxed. This is why UAE tax residency (183+ days, or 90+ days with ties) remains attractive.
What founders should do
- Register for VAT on time and file quarterly returns.
- Assess whether your Freezone income qualifies for 0%.
- Keep books from day one — the FTA expects auditable records.
Our accounting team handles registration, filings and payroll on subscription from 940 AED/month.