Taxation in Dubai

Updated on Monday 22nd August 2016

Taxation in Dubai Image UAE is recognized for its desirable taxation system, as it is the state that enforces few taxes on individuals and enterprises. 

This taxation system is the main motivation why businessmen choose to open companies in Dubai and individuals choose to transfer to and live in the city. 

It is good to know that taxes in Dubai can be direct or indirect, and our team of accountants can offer suitable guidance and information, if you need to pay your taxes in the city, or if you need accounting services in Dubai.

Details about the taxes for individuals in Dubai

Dubai can be considered as a tax safe place from a taxation point of view as there are no income taxes for individuals in the city. Persons who live and work in Dubai have no employment liabilities.

Also, foreign citizens living and working in Dubai may be subject to taxation in their home states for the income obtained in Dubai, as long as:

•    they use only a part of the fiscal year in Dubai and the rest of the personal funds in their home states.
•    the income is made by a rented property;

On the other hand, due to the UAE’s double taxation treaties, the taxation of income can be prevented.

Indirect taxes in Dubai

Contrary to popular conviction, there are many other taxes imposed in Dubai and these are levies that individuals who live in the city need to pay:

•    a municipal tax of 10% which is charged on hotels and entertainment events;
•    a 30% tax on the acquisition of alcohol;
•    a 50% tax on the import of alcoholic drinks.

Taxes are also imposed by DEWA (Dubai Electricity and Water Authority) on monthly utility bills. 
Furthermore, Dubai has a road tax system called Salik, which has been established on all important highways that goes in and out of Dubai. 

Please feel free to contact our accountants in Dubai for any other information about the taxation system in the city.