04/21/2025 04/22/2025 362 0 0 Author Elena Kirichenko
The United Arab Emirates has established itself as one of the most attractive regions due to low property taxes in the UAE and benefits for businessmen. Knowledge of the laws of the country allows us to better understand why this area is in demand among businessmen, investors and permanent residents from abroad.
One of the key aspects of the tax system is the absence of income tax in the UAE for resident foreigners, who also do not have to pay fees for interest, dividends, wealth, luxury, royalties, and more. This creates favorable conditions for expats.
Significant benefits are provided for property owners. There are no fees for property, donation and inheritance in the country, which makes investments in the Emirates especially profitable. An additional advantage is the absence of rental income contributions for owners.
As for entrepreneurs, the state has introduced a 5% VAT, which applies to most goods and services. In 2023, a 9% corporate tax began to apply here on company income from 375,000 AED ($102,000) per year. It remains one of the lowest in the world.
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Taxes for property owners
The Emirates’ tax system has favorable conditions. There are no fees here, in particular, owners are not required to pay annual property taxes, and no income tax is charged when selling real estate.
Enterprises registered in free economic zones can enjoy additional benefits, including exemption from customs duties.
The Emirates provides unique opportunities for entrepreneurs and investors, which stimulates business development.
Katerina Alekseychuk, Expert at Metropolitan Premium Properties, the country’s tax system provides unique opportunities for property owners. The absence of a property tax and capital gains on sale makes investments especially profitable here. This is one of the key factors attracting buyers from all over the world.
Property purchase tax
In the UAE, the amount of contributions may vary depending on the emirate, the type of facility and its cost. Thus, the fee for the transfer of ownership of real estate in Dubai is 4%, and in Abu Dhabi – 2%. There are other types of costs, which on average reach 7-10% of the property price.
Calculate property taxes in Dubai when buying:
| Tax | Cost |
|---|---|
| DLD Commission | 4% of the property price
|
| Registration fee |
|
| Certificate of ownership | 250 AED (70 $) |
| Agency fees – agent’s assistance in selection and purchase | 2% + 5% VAT |
| Transportation fee – assistance in paperwork | from 5,000 AED ($1,350) to 10,000 AED ($2,700) |
| VAT – does not apply to residential properties, except for transactions with hotel residences | 5% |
If the buyer uses mortgage loans, additional requirements apply:
| Mortgage registration | 0.25% of the loan amount + 290 AED ($80) |
|---|---|
| Mortgage registration | Usually 1% of the loan amount + 5% VAT |
| Assessment fee | Average from 2500 AED ($680) to 3500 AED ($950) |
| Life insurance | 0,3–0,8% |
| NOC Certificate | From 500 AED ($135) to 5000 AED ($1350) |
Additional fees for owners
Does Dubai have taxes on real estate after purchase? No, but there are a number of fees. Let’s list them in the table:
| Maintenance fees: maintenance of the complex and its services | Depends on the type of object |
|---|---|
| DEWA commission for electricity and water supply connection |
|
| Insurance | It varies depending on the specific property option. |
Property tax
One of the most important advantages of owning real estate in the country is the lack of property contributions. This means that owners are not required to pay annual fees, which significantly reduces operating costs. This policy makes investments especially attractive to international investors who are looking for ways to minimize tax liabilities.
Please note! There are no fees for donation and inheritance of real estate in the Emirates.
The UAE tax for non–resident legal entities and companies is 9% on income from real estate, which is used for investment and business.
Rental tax
Rental income is exempt from taxation. This means that the owners who rent out their property are not required to pay a contribution for such a profit. However, there is an additional tax in Dubai for foreigners and all owners. These are municipal fees in the amount of 5% of the annual fee, which tenants are required to pay. The tax is included in the rental price of the property and is included in the monthly DEWA bill.
Tax on the sale of real estate
There is no capital gain contribution for the sale. This means that sellers are not required to pay fees on this profit. As with the purchase, a transfer tax is charged, which is 4% of the value in Dubai or 2% in Abu Dhabi. This fee is usually divided between the buyer and the seller, unless otherwise stipulated in the contract.
Read more about Moving to the UAE in 2025: five invaluable tips
Taxes for entrepreneurs
Doing business in the UAE offers many advantages, including a favorable tax system that attracts entrepreneurs from all over the world.
Value added tax (VAT)
VAT is a levy on goods and services at each stage of their production and sale, which is added to the cost of the product and paid by the end user. It was introduced in the country on January 1, 2018 and amounts to 5%.
VAT is applied to the vast majority of goods and services, with the exception of certain categories such as residential buildings, certain financial services, undeveloped land and local passenger transport that meet special requirements.
Companies with an annual turnover exceeding 375,000 AED ($102,000) are required to register for VAT and file declarations regularly. For companies with a turnover of over 187,500 AED ($51,000), this procedure remains voluntary, but may be beneficial in certain cases. Taxpayer enterprises are entitled to a refund of the fee they have paid for goods or services related to doing business.
Corporate tax
This is a new tax in the UAE, which is levied on the net income of businesses. The fee is 9% and is imposed for companies with annual income exceeding 375,000 AED ($102,000). Firms with lower profits are exempt from paying it, which stimulates the development of small and medium-sized businesses.
The corporate tax applies to all businesses registered in the Emirates and individuals doing business. Fees are not charged:
- salaries and other income from employment;
- investments in real estate of individuals;
- interest on bank deposits;
- income of foreign investors in the form of dividends, interest, capital gains and other profits from investments and ownership of securities;
- dividends and capital gains received by an enterprise in the Emirates due to its shareholdings.
Excise tax
This fee was introduced in 2017. It applies to products that may be harmful to health and the environment. The sales tax in Dubai and other emirates is as follows:
- 50% – carbonated drinks, products with added sugar and other sweeteners;
- 100% – electronic devices for smoking and liquids for them, tobacco products and energy drinks.
The fee is collected at the production or import stage and must be paid by the manufacturers or importers. Because of this, the cost of the product increases for customers as well.
Taxes in free economic zones
Free economic zones (FEZs) offer benefits to entrepreneurs and create a favorable environment for investment and doing business. There are no customs fees in these locations. As for the corporate tax, it formally amounts to 0% for those enterprises that are recognized as qualified companies (Qualifying Free Zone Person) and receive income from certain types of activities. These include the management of funds, assets and investments, the production and processing of goods, reinsurance services, and the ownership of shares and other securities. In this case, the contributions amount to:
- 0% – of the income earned from qualified activities;
- 9% is from income from other sources.
FEZs are often located in residential areas, so buyers can choose apartments in Dubai near their place of work.
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Customs duties
The standard customs duty rate is 5% of the value of the goods. For some categories, such as alcoholic beverages and tobacco products, higher rates apply – 50 and 100%, respectively. The following imported items are not subject to duties:
- personal phone numbers;
- clothes and toiletries;
- personal jewelry;
- children’s and wheelchairs;
- laptop computers and printers;
- sports equipment;
- telescopes and other things.
Goods imported into the free economic zones are exempt from customs duties.
Licensing and registration fees
In the country, companies are required to obtain licenses to operate, and this process is accompanied by certain fees. Their size depends on the type of business and the jurisdiction in which the company is registered. For example, fees for setting up a limited liability corporation range on average from 22,000 AED ($6,000) to 24,000 AED ($6,500), and in free zones they start from 15,000 AED ($4,100). The cost of a business license can range from 10,000 AED ($2,700) to 50,000 AED ($13,500).
Popular questions
What taxes are levied when buying a property in the UAE? In the UAE, a registration fee, a transfer tax, and a certificate of ownership are mandatory. Are there taxes on property, inheritance and donation of real estate in the UAE? There are no such contributions for individuals in the UAE. What taxes should entrepreneurs pay in the UAE? Business owners in the UAE are required to pay VAT (5%) and corporate tax (9%) if they exceed income of 375,000 AED ($102,000). There is an excise tax on certain goods, which is 50 or 100%. Are there tax benefits for companies registered in the UAE free Economic zones? Yes, companies in the UAE’s free economic zones are exempt from customs duties. Subject to certain conditions, the corporate tax is 0%. What are the VAT obligations for entrepreneurs in the UAE? Enterprises with an annual turnover of more than 375,000 AED ($102,000) must register as VAT payers, as well as submit declarations. Companies with an income of more than 187,500 AED ($51,000) per year can register for VAT at will. What is a taxpayer identification number in the UAE? This is an INN (Tax Registration Number, TRN) with a 15-digit number that is assigned to legal entities. It allows you to track transactions related to the payment of VAT. How do I get a taxpayer identification number in the UAE? Register on the official website of the Federal Tax Service (FTA), fill in the information and attach the documents. After that, you will be assigned an individual number. What fees and duties should be considered when importing goods to the UAE? The standard rate is 5%, but higher duties are applied for some goods, such as alcohol and tobacco. Goods in free economic zones are exempt from these charges.
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