Dubai Tax Rates 2026 | Corporate Tax & VAT Full Guide

Dubai Corporate Tax Rate (2026)

Corporate tax in Dubai has applied since 1 June 2023 under a Federal Decree-Law. The standard rate is 9%, but the first AED 375,000 of taxable income is taxed at 0%. Only profit above this threshold is taxed at 9%. This tiered structure protects small and medium-sized businesses while keeping Dubai among the most competitive tax regimes in the region.

15% DMTT for Large Multinationals

For financial years starting on or after 1 January 2025, the UAE introduced a Domestic Minimum Top-up Tax (DMTT) aligned with the OECD Pillar Two rules. The DMTT rate is 15% and applies only to multinational groups with consolidated global revenue exceeding EUR 750 million. Local SMEs and standard businesses are unaffected and continue to be taxed at the 9% standard rate.

Free Zone (QFZP) and the 0% Tax Benefit

Companies operating in Dubai's free zones can benefit from 0% corporate tax on qualifying income if they meet the "Qualifying Free Zone Person" (QFZP) conditions. Non-qualifying income is taxed at 9%. QFZP status is not automatic; it depends on adequate economic substance, audited financial statements and staying within the de-minimis threshold (the lower of 5% of total revenue or AED 5,000,000).

Small Business Relief

To support start-ups and small businesses, the FTA offers Small Business Relief. Businesses whose revenue does not exceed AED 3,000,000 in the current and all previous tax periods may elect this relief to reduce their corporate tax burden, significantly lowering compliance and administrative costs. The United Arab Emirates has extended the Small Business Relief initiative until 31 December 2029, so eligible businesses can continue to benefit from simplified Corporate Tax compliance requirements.

Table 1 · Dubai Corporate Tax Summary (July 2026)
Category	Rate	Scope / Threshold
Profit ≤ AED 375,000	0%	All standard taxpayers
Profit > AED 375,000	9%	On the excess amount
Free Zone (QFZP)	0% / 9%	Qualifying / non-qualifying income
Small Business Relief	Exempt	Revenue ≤ AED 3,000,000
Large multinational (DMTT)	15%	Global revenue ≥ EUR 750M

Example: How the 9% Corporate Tax Works

Suppose a Dubai mainland company has AED 600,000 of annual taxable profit. The first AED 375,000 is taxed at 0%, and the remaining AED 225,000 is taxed at 9%, giving a corporate tax liability of AED 20,250 — an effective rate of only about 3.4% of total profit. Compared with the 20–30% corporate tax rates common in many European countries, Dubai's 9% headline rate, combined with no personal income tax, no withholding tax and free zone incentives, makes it a strategic base for international structures.

Dubai VAT Rate (Value Added Tax)

Value Added Tax (VAT) has applied in Dubai since 1 January 2018. The standard rate is 5% and covers most goods and services. Exports outside the country are 0% (zero-rated), while some supplies such as certain healthcare and education services are exempt. This low rate is one of the factors that make Dubai attractive for international trade and consumption.

VAT Registration Thresholds and Filing

VAT registration is mandatory for businesses whose annual taxable turnover exceeds AED 375,000. Businesses exceeding AED 187,500 may register voluntarily. VAT returns are usually filed quarterly, though the FTA may set a monthly period for large taxpayers. All processes are handled digitally through the EmaraTax portal.

Table 2 · Dubai VAT Summary (July 2026)
Item	Value
Standard VAT rate	5%
Exports / zero-rated	0%
Mandatory registration	AED 375,000
Voluntary registration	AED 187,500

The Impact of VAT on Businesses

VAT-registered businesses offset the VAT they collect on sales (output VAT) against the VAT they pay on expenses (input VAT), remitting only the difference to the FTA. With sound accounting, VAT is therefore not a final cost to the business; the burden falls on the end consumer. Correct invoicing, accurate record-keeping and timely filing are essential to avoid penalties.

Dubai Excise Tax

Excise Tax has applied since 2017 and targets goods with a negative impact on health and the environment, aiming to reduce harmful consumption and protect public health. Rates vary by product group: 50% on carbonated and sweetened drinks, and 100% on tobacco products, energy drinks and electronic smoking devices.

Table 3 · Excise Tax Rates (July 2026)
Product Group	Rate
Carbonated drinks	50%
Sweetened drinks	50%
Tobacco products	100%
Energy drinks	100%
Electronic smoking devices	100%

Businesses that import, produce or store excise goods must also complete excise tax registration with the FTA and file regular returns.

Dubai Customs Duty Rate

The general customs duty rate on imports into Dubai is around 5% for most products. Higher rates may apply to certain goods such as alcohol and tobacco. Free zones offer significant customs exemptions for goods that remain within the zone or are re-exported. The UAE's digitalised customs infrastructure makes procedures fast and transparent, facilitating international trade.

Is There Personal Income or Property Tax in Dubai?

Personal income tax in Dubai is 0%; salaries, wages and individual investment income are not taxed at the federal level, making Dubai highly attractive for high-earning professionals and entrepreneurs. There is also no classic annual property tax; instead, indirect charges may apply, such as a one-off property transfer fee (a Dubai Land Department transaction, generally 4% of the transaction value) and a municipality-based housing fee on residential rents. In addition, withholding tax in the UAE is 0%.

Tax Returns and Deadlines in Dubai

Yes, filing tax returns in Dubai is mandatory. The corporate tax return must be submitted to the FTA within nine months of the end of the relevant tax period, with payment due in the same window. VAT returns are usually filed quarterly (monthly in some cases), depending on the period assigned at registration. All filing and payment is done digitally through the FTA's EmaraTax portal. Because missing deadlines can trigger administrative penalties, an accurate tax calendar and expert support are essential.

To explore in detail how corporate tax is calculated and applied for a specific business, read our article How Is Corporate Tax Applied in Dubai?. For an assessment tailored to your company, you can request a free quote and consultation.

Important note: The rates and amounts in the tables on this page were prepared as of July 2026 and are based on current official sources. Tax rates, thresholds and legislation may change over time. For the most current and binding information, please check the websites of the Federal Tax Authority (FTA) and the relevant official bodies.

References

Federal Tax Authority (FTA) – tax.gov.ae
Official UAE Government Portal – u.ae

Advantages of the Dubai Tax System — and Who It Suits

With low rates and a predictable structure, the Dubai tax system is a powerful magnet for international investors. The 9% corporate tax sits well below that of many developed economies, while the absence of personal income tax and withholding tax lifts net returns directly. The free zone regime offers 0% on qualifying income for properly structured companies, and Small Business Relief protects the cash flow of new ventures in their early growth years.

This structure is particularly suitable for e-commerce companies, consulting and service firms, holding and investment companies, digital start-ups and international groups seeking a regional hub. However, correctly assessing free zone conditions, economic substance requirements and rules such as the DMTT requires professional advice to avoid penalties and fully capture the benefits. The optimal scenario varies with your company's activity and revenue profile.

Dubai Tax Rates and Tax System 2026