Corporate tax in Dubai is levied on profits earned by companies after deducting expenses. Generally, all business-related expenses are tax-deductible.

The standard corporate tax rate in Dubai is 9%, applied as follows:

• Annual taxable profits up to 375,000 AED (approximately 95,000 euros) are subject to a 0% tax rate.
• Annual taxable profits exceeding 375,000 AED are subject to a 9% tax rate.

Certain types of income are exempt from corporate tax in Dubai. These exemptions include dividend income received by the company, profits from group restructurings, and profits from intra-group transactions.

All businesses operating in Dubai, including those in free zones, are subject to corporate tax. However, certain businesses may be exempted under specific conditions.

To qualify for exemption, a free-zone business in Dubai must:

• Have appropriate economic substance in line with UAE regulations.
• Generate income classified as “eligible income.”
• Comply with transfer pricing rules and maintain relevant transfer pricing documentation.
• Have not voluntarily chosen to be subject to corporate income tax.

All businesses in Dubai, including those registered in free zones, must file a tax return annually, even if for informational purposes. This entails increased administrative burden and penalties for non-compliance.

Individuals relocating to Dubai and obtaining tax residency status are fully exempt from income taxes.

Expatriates living in Dubai are considered tax residents if they comply with residency and substance requirements.

Entrepreneurs expatriating to Dubai remain non-taxable on their personally earned income.

The only applicable tax currently is the 5% Value Added Tax (VAT), which is applicable as needed on invoices issued to the UAE.

Import duties on goods into the UAE (outside of free zones) are set at 5%.