Absence of taxation
There is currently no personal income tax in the United Arab Emirates. As such, there are no individual tax registration or reporting obligations.
Under the Federal Decree-Law No. 47 of 2022 on the Taxation on Corporations and Businesses (‘UAE CT Law’), natural persons who conduct a business or business activity in the United Arab Emirates will be subject to UAE CT at 9% where the total turnover derived from such business or business activity exceeds 1 million UAE dirham (AED). For this purpose, wages, personal investment income, and real estate investment income will not be considered for determining such turnover.
Local income taxes
There is no federal or Emirate-level personal income tax in the United Arab Emirates.
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Now, regarding the information provided in the article about taxation in the United Arab Emirates (UAE), let's break down the key concepts:
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Absence of Personal Income Tax:
- The United Arab Emirates currently does not impose personal income tax.
- Individuals in the UAE are not required to register or report their personal income for tax purposes.
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UAE CT Law (Federal Decree-Law No. 47 of 2022):
- Natural persons engaging in business activities in the UAE are subject to the UAE Corporate Tax (UAE CT) at a rate of 9%.
- The tax applies when the total turnover from the business or business activity exceeds 1 million UAE dirham (AED).
- Notably, wages, personal investment income, and real estate investment income are excluded when determining the turnover for tax purposes.
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Local Income Taxes:
- There is no federal or Emirate-level personal income tax in the UAE.
- The absence of local income taxes indicates that individuals are not subject to taxation on their personal income at both federal and Emirate levels.
This information highlights the unique tax landscape in the UAE, where individuals benefit from the absence of personal income tax, but businesses are subject to the UAE CT under specific conditions. If you have any further questions or need additional clarification on this topic, feel free to ask.
