DUBAI TAX REPORT 2025 / 2026
10/24/20242 min read
DUBAI TAX REPORT 2025 / 2026
Dubai operates under the UAE federal tax system. New compliance rules took effect in 2025. Review these rates for the current fiscal year.
CORPORATE TAX (CIT)
The standard corporate tax applies to business profits.
0% Rate: On taxable income up to AED 375,000.
9% Rate: On taxable income above AED 375,000.
Qualifying Free Zone Persons: 0% rate on "Qualifying Income" (as defined by Cabinet Decisions).
Multinational Enterprises (MNEs): A 15% Top-Up Tax applies to MNEs with global revenues exceeding EUR 750 million (approx. AED 3.15 billion), effective January 1, 2025.
SMALL BUSINESS RELIEF
Eligible businesses can reduce their tax burden. This relief applies to tax periods ending on or before December 31, 2026.
Eligibility: Revenue must be below AED 3,000,000 per tax period.
Benefit: You are treated as having no taxable income. No tax is payable.
Requirement: You must elect this relief in your tax return.
VALUE ADDED TAX (VAT)
The standard VAT rate is 5%.
Standard Rate: 5%
Registration Threshold: Mandatory if taxable turnover exceeds AED 375,000 in the last 12 months.
Voluntary Registration: Available if turnover exceeds AED 187,500.
Key VAT Updates (Effective Jan 1, 2026):
Refund Cap: You must claim VAT refunds within 5 years.
Reverse Charge: You no longer need to issue self-invoices for reverse charge supplies.
Input Tax Denial: The FTA can deny input tax credits if the transaction is linked to tax evasion in the supply chain.
PERSONAL INCOME TAX
Dubai maintains a tax-free environment for individuals.
Employment Income: 0% tax on salaries and wages.
Personal Investment Income: 0% tax on personal income from real estate or equity investments (unless conducted as a licensed business).
WITHHOLDING TAX (WHT)
The UAE imposes a 0% withholding tax rate on most categories.
Cross-Border Payments: 0% on dividends, interest, and royalties paid to non-residents.
Filing: No withholding tax return is currently required for these 0% payments.
EXCISE TAX
This tax targets specific goods harmful to human health or the environment.
50% Rate: Carbonated drinks, sweetened drinks.
100% Rate: Tobacco products, energy drinks, electronic smoking devices.
COMPLIANCE DEADLINES
Missing these dates results in significant penalties.
Corporate Tax Registration: Deadlines vary by license issuance date (check FTA schedule).
Corporate Tax Return: 9 months after the end of your financial year.
Corporate Tax Payment: 9 months after the end of your financial year.
VAT Return: 28th day of the month following the end of the tax period (monthly or quarterly).