Your guide to expat life in United Arab Emirates

Taxation in the UAE

The sections below provide the basic information on taxation in the UAE.

Show more

Local information

  • Tax Authority Ministry of Finance
  • Website www.mof.gov.ae/en
  • Tax Year Not applicable
  • Tax Return due date Not applicable
  • Is joint filing possible Not applicable
  • Are tax return extensions possible Not applicable

Tax rates

2019 Income Tax Rates

Taxable Income Band AED National Income Tax Rates
Not applicable Not applicable

No personal taxation currently exists in the United Arab Emirates (UAE).

Additional information

General

Laws covering corporate tax exist in all the individual emirates but, in practice, taxes are enforced only on the following entities:

  • Foreign oil and gas producing companies (oil/hydrocarbon companies with actual production in the Emirates) at rates set forth in their government concession agreements (which are confidential).
  • Branches of foreign banks at rates fixed by decree or in agreements with the Rulers of the Emirates where the banks operate.

End-of-service benefits

A foreign employee who is not a national of a GCC country and who completes a period of continuous service that is longer than one year is entitled to gratuity. The gratuity is calculated for employees with unlimited employment contracts as follows:

  • Less than one year of service: employee is not entitled to any gratuity pay
  • Between one year and three years of service: employee is entitled to one-third of the 21 days of gratuity pay
  • Between three years and five years of service: employee is entitled to two-thirds of the 21 days of gratuity pay
  • Five or more years of service: employee is entitled to the full 21 days of gratuity pay

The gratuity is calculated for employees with limited employment contracts as follows:

  • Less than one year of service: employee is not entitled to any gratuity pay
  • Between one year and five years of service: employee is entitled to the full 21 days of gratuity pay
  • Five or more years of service: employee is entitled to the full 30 days of gratuity pay

In both cases the total gratuity may not exceed the remuneration of two years (24 months).

The gratuity is calculated based on the last basic wage paid to the employee. It is payable on the termination or expiration of the employment contract. The employee is entitled to a gratuity for any fraction of a year of service if the employee has completed at least one year of continuous service.

The calculation can vary further depending on the circumstances of termination or cessation of employment.

Other taxes

No capital gains tax is imposed in the UAE. Capital gains are taxed as part of regular business profits. The UAE does not impose net worth tax or estate and gift tax.

Value-added tax at a rate of 5% was introduced in the UAE from January 2018.

Social security

The UAE does not impose social security taxes on foreign nationals. UAE-national employees and nationals from the other Gulf Cooperation Council (GCC) countries contribute to retirement and pension funds in accordance with specific regulations.

Making life easier for expats

  • Starting a new life abroad has its complexities, your finances shouldn't be one of them.
  • We believe that choosing to live abroad has the power to enrich your life. It can be a journey that leads to new experiences and opportunities.
  • But it can also be complicated. That's why we're here to help manage your finances and make planning for the future simple.

All content in the Banking, Moving Money, Family Finances, Budgeting, and Financial planning sections, all Expat Explorer survey data and all tips (in quotation marks) are provided by HSBC.

The Tax section is provided by EY in accordance with their Terms and Conditions This link opens in a new window . EY accepts no responsibility for the accuracy of any of this information. By using this information you are accepting the terms under which EY is making the content available to you based on the legislation and practices of the country concerned as of 1 July 2019 by EY and published in its Worldwide personal tax guide, 2019-20. Tax legislation and administrative practices may change, and this document is a summary of potential issues to consider. This document should not be used as a substitute for professional tax advice which should be sought for the country of arrival and departure in advance of moving in order to discuss your circumstances. It is your responsibility to ensure you make all relevant disclosures to the tax authorities and that you are compliant with local tax legislation.

All other content is provided by expatarrivals.com, Globe Media Ltd and was last updated in October 2020. HSBC accepts no responsibility for the accuracy of this information.

This information does not constitute advice and no liability is accepted to recipients acting independently on its contents. The views expressed are subject to change.