Tax regulations in Dubai: a guide for businesses
Value added tax, corporate tax, stamp duty, customs, the key taxes in Dubai and Sharjah at a glance, with the benefits for Free Zone companies and more than 130 double taxation treaties.
The UAE has made significant progress in introducing modern tax systems. While Dubai was once known as a tax free zone, new taxes such as value added tax and corporate tax have been introduced. Businesses must observe these rules to avoid legal problems.
Key taxes in Dubai and Sharjah
1. Value added tax (VAT)
VAT was introduced in the UAE in 2018 and currently stands at 5%. It applies to goods and services, with exemptions in the healthcare and education sectors. Registration becomes mandatory from AED 375,000 annual turnover.
2. Corporate tax
Since June 2023, corporate tax stands at 9% on profits above AED 375,000. Profits below that remain tax free. Free Zone companies can be exempt under certain conditions.
3. Stamp duty
This duty on contracts and property transactions is around 0.25% of the transaction value.
4. Customs
The standard customs rate is 5%, with higher rates for alcohol and tobacco.
Tax advantages in Dubai and Sharjah
- Free Zones offer tax free profits under certain conditions
- No personal income tax
- More than 130 double taxation treaties worldwide
How Buchhaltung Dubai helps you
We provide VAT registration, corporate tax advice, bookkeeping and compliance services specifically for Dubai, Sharjah and the wider UAE.
FAQs on tax regulations in Dubai
Who has to register for VAT? Businesses with annual turnover above AED 375,000.
Is there a personal income tax in Dubai? No, individuals pay no income tax.
What benefits do Free Zones offer? Tax advantages, 100% foreign ownership and simplified incorporation.
When did corporate tax take effect? Since June 2023, for profits above AED 375,000.
Can I reclaim VAT? Yes, under certain conditions, in particular for imports and certain business expenses.
Which documents are required? Trade licence, bank statements, receipts and records kept for at least 5 years.
Conclusion
Dubai and Sharjah offer business friendly tax conditions, but they require careful compliance and professional advice to make the most of the benefits available. Talk to us, we are here to help.