Dubai Taxes: UAE Laws You Need to Know About

The topic of Dubai taxes is not particularly interesting there. Because the emirate is considered a tax haven. But now a VAT has to be paid there too. There is also a bed tax for tourists.

Information on Dubai Taxes

The Island Dubai

As a rule, no resident would like to pay taxes. But taxes are of course necessary so that the state can also finance itself. For example, roads have to be built and much more. In the case of the Emirate of Dubai, the state has a lot of money at its disposal through the income from oil. There it is not absolutely necessary to levy taxes on the residents. There is no income tax, corporation tax, or corporate tax. Thus, the emirate is a paradise for the residents and companies that are based there. In recent years, however, a few taxes have also been introduced there. We will explain here what these are and how much you have to pay there.

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VAT

Dubai VAT was introduced on January 1, 2018, and is currently five percent. There you have to pay 19 percent if you buy something. The state has spent a lot of money through the many projects in the emirate such as Downtown Dubai or the construction of the Burj Khalifa. There are also many construction projects planned in the next few years, which means that this will cost a lot. No state in the world can always finance such high expenditures in the long term, which is why taxes have also been introduced there. In this way, residents and tourists alike will participate in the financing. But when you see what has been built there then you are happy to give away the money. This is used very sensibly there in modern infrastructure.

Tourism Dirham Bed Tax

Tourism dirham was introduced back in 2014 and these Dubai taxes only apply to tourists. That means you have to pay a kind of tourist tax when you stay in a hotel. Furthermore, this always depends on the hotel category in which you are staying. If you have booked a five-star luxury hotel you pay 20 dirhams per night for the room. At a four-star hotel, it is only 15 dirhams and it is best to take a look at our special page. There you can see exactly how much you have to pay. Furthermore, these taxes have to be paid immediately upon check out. With a trip to Dubai, you should always take into account that you have to add them. You always get an invoice and there you can see how much the amount is.

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Income Tax

The nice thing is that you don’t have to pay any income tax in Dubai. If you earn money there then you don’t have to pay taxes again. For the residents this is of course a great advantage and you can keep 100 percent of the money you have earned. So this is very interesting for the employees and you can save more money, for example in another country. There the taxes can be so high that not much is left at the end of the month.

That is why the emirate is very popular with foreigners and a job in Dubai is a dream for many. However, it is only worthwhile if you have a management position. You can earn a lot of money there. As a rule, you can say that if you worked in Dubai for five years, for example, you would probably need 20 years in another country to get the amount saved. So the Dubai taxes are very interesting there if you want to work there.

Corporate Tax

Dubai Internet City

The emirate is also very interesting for companies and you don’t pay Dubai taxes there. As a rule, most companies from abroad have settled in the free trade zones. This is for example the Jebel Ali Free Zone or the Dubai Internet City. Many well-known companies from around the world, including numerous Germans, have a branch there. They also need staff and you can earn good money. If you don’t have to pay taxes there then of course this attracts many companies. The staff, in particular, is also very cheap there, so you can also produce cheaply there. So there are many reasons why you should start a company there. The conditions there are almost perfect.

Is Dubai a Tax Haven?

Basically, you can say that taxes hardly have to be paid there. But now VAT and bed tax has been introduced there. Usually, this mainly affects tourists. If you are a resident of Dubai you still benefit from the low Dubai taxes. You don’t have to give much of the money you save to the state. This leaves significantly more at the end of the month. So working in Dubai is becoming more and more interesting. For companies and residents, the tax conditions are very good and you can live well there. Furthermore, the climate is always very warm and that is why many retirees spend their well-deserved retirement there.

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Free Trade Zones

You can find so-called free trade zones everywhere in the emirate. As already mentioned, this is for example the Jebel Ali Free Zone, Dubai Media City, or Dubai Internet City. But Dubai Healthcare City is also one of them. If you are based there as a company then you don’t pay any Dubai taxes there. The state has granted tax exemption there for the next 50 years. So you can be sure that nothing will change in the near future. Many companies have a branch and look after the Middle East from there, which is very practical.