Taxes Applicable to Companies

The purpose of this page is to list all taxes present in the UAE.

There is no corporate profit tax in the UAE.

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There is no payroll tax in the Emirates.

However, it is now required that all residents in the Emirates take out local health insurance (from AED 1,000 per year).

There is no retirement contribution either, so no right to retire later.

VAT (at rates of either 0% or 5%) is applied in the United Arab Emirates.

VAT in the UAE works like VAT in France, Belgium, etc . It is neutral for companies which must collect it and transfer the balance between the VAT collected on their sales and the VAT deductible on their purchases.

Whether or not a company is required to register for VAT depends on their revenue and activity level for which there are 4 possible scenarios:

1. MANDATORY: Your turnover for the last 12 months or the next 30 days is greater than AED 375,000: the application of VAT is compulsory. You will then be able to recover the VAT on your purchases;
2. VOLONTARY: Your turnover for the last 12 months or the next 30 days is greater than AED 187,500 and less than AED 375,000: the application of VAT is optional. If you choose this option, you will then be able to recover the VAT on your purchases. Otherwise, you will not be able to recover the VAT on your purchases;
3. EXCEPTION: this only concerns companies which have activities outside the UAE and outside the GCC (Oman, Saudi Arabia, etc.) and which do not intend to have any. The company will not have a VAT number, so it will not be able to recover it on its purchases. There is no quarterly declaration to be made in this case;
4. EXEMPTION: Exemption from VAT which only applies to a certain sector of activity such as health care, education, oil and gas, real estate and transport. Registration is necessary if you exceed the mandatory turnover threshold (to be ticked in the registration form if you are affected by exempt VAT).

The VAT will be 0% on:

• Exports of goods and services outside the Emirates and the Gulf countries (so if you invoice a customer located outside the Gulf countries, the VAT rate will be 0%);
• International transport and related supplies;
• Supply of certain means of sea, air and land transport (such as aircraft and ships);
• Certain precious investment metals (for example gold, silver, purity of 99%);
• Newly built residential properties, which are supplied for the first time within 3 years of their construction;
• Provision of certain education services and provision of related goods and services;
• Supply of certain health services and supply of goods and related services.

VAT will be 5% on the sale of goods and services in the UAE.