--- title: "United Arab Emirates tax for new residents 2026: rates and regimes" url: https://settleanywhere.com/countries/united-arab-emirates/tax/ lang: en updated: 2026-10-12 --- # United Arab Emirates tax Tax residence: At least 183 days in 12 consecutive months. Foreign-source income of residents: No personal income tax. Special regime for new residents: Qualifying Free Zone Person corporate tax treatment. Checked against official sources on 12 Oct 2026 [Change log](https://settleanywhere.com/changes/) ## Tax residence - At least 183 days in 12 consecutive months · Physical presence in the UAE; days need not be consecutive. Alternative tests: usual place of residence and centre of financial and personal interests in the UAE; or 90 days or more with UAE nationality/valid residence permit/GCC nationality plus a permanent place of residence or employment or business in the UAE. - At least 90 days in 12 consecutive months · Applies to UAE nationals, holders of a valid residence permit, or GCC nationals who also have a permanent place of residence in the UAE or work or carry on business there. - The UAE levies no income tax on individuals, so wages, investment income and foreign-source income of an individual are not charged; only business turnover above AED 1 million (≈ $272,000) is within corporate tax. Tax residency is defined by Cabinet Decision No. 85 of 2022 (in force 1 March 2023): usual and primary residence plus centre of financial and personal interests, or 183 days, or 90 days with the stated additional links, in a 12-month period. - Returns and payment are due within 9 months of the end of the tax period. ## Special regimes for new residents Special regime ### Qualifying Free Zone Person corporate tax treatment 0% tax **Details** - On: Qualifying corporate taxable income - Limit: AED 375k/yr ≈ $102k A Qualifying Free Zone Person pays 0% UAE corporate tax on Qualifying Income only. Its other taxable income is taxed at 9% from the first dirham: it does not get the 0% band on the first AED 375,000 (≈ $102,000) that other businesses get. This is an entity regime and does not apply to an individual's salary or foreign-source income. (sources 10, 6) #### Taxed on Qualifying corporate taxable income (not personal salary or all business turnover). #### Who it applies to - Entity must be a Free Zone Person and satisfy all Qualifying Free Zone Person conditions, including adequate substance in a free zone, audited financial statements and transfer pricing documentation. - De minimis test: non-qualifying revenue in the tax period must not exceed the lower of AED 5,000,000 (≈ $1,360,000) or 5% of total revenue; above that the entity is not a Qualifying Free Zone Person. - Qualifying Income must arise from specified qualifying sources/activities under the Corporate Tax Law and Cabinet decisions. - Register and comply with UAE Corporate Tax filing obligations. #### Exclusions - Excluded Activities and non-qualifying income do not receive the 0% rate; that taxable income is taxed at 9% with no AED 375,000 (≈ $102,000) zero band. - Failure to satisfy QFZP conditions can forfeit status for the relevant period and subsequent periods under the law. - An individual employee's wage is outside Corporate Tax scope irrespective of free-zone status. #### Limits - AED 375,000 a year (≈ $102,000) · Other businesses pay 0% on taxable income up to AED 375,000 (≈ $102,000). A Qualifying Free Zone Person does not get this band: its taxable income that is not Qualifying Income is taxed at 9%. #### Tax residence This is an entity tax regime and does not establish an individual's tax residence. Individual tax status and foreign-country obligations are separate. #### Visas No visa or residence permission is conferred by free-zone tax status. #### Other taxes VAT, customs duties, payroll and social obligations and emirate-level fees are separate and may apply. Checked against official sources on 12 Oct 2026 [Change log](https://settleanywhere.com/changes/) ## Standard rules and foreign-source income Standard rules ### Personal income: no individual income tax; VAT 5% 0% tax **Details** - Limit: AED 1M/yr ≈ $272k The UAE does not levy income tax on individuals; VAT is 5%. Individuals running a business in the UAE pay corporate tax only if business turnover exceeds AED 1 million (≈ $272,000) in a calendar year. (sources 1, 2, 3, 4) #### Taxed on Individual wages, personal investment income and real estate investment income are outside corporate tax; business turnover of natural persons is the corporate-tax test. #### Who it applies to - Natural persons are taxed under the corporate tax law only if they conduct a business or business activity in the UAE and total turnover exceeds AED 1 million (≈ $272,000) in the calendar year. #### Exclusions - Wages, personal investment income and real estate investment income are not business activities for this test. #### Limits - AED 1,000,000 a year (≈ $272,000) · Business turnover of a natural person above which corporate tax registration and tax apply (calendar year). #### Days in the country - At least 183 days in 12 consecutive months · Physical presence in the UAE; days need not be consecutive. Alternative tests: usual place of residence and centre of financial and personal interests in the UAE; or 90 days or more with UAE nationality/valid residence permit/GCC nationality plus a permanent place of residence or employment or business in the UAE. - At least 90 days in 12 consecutive months · Applies to UAE nationals, holders of a valid residence permit, or GCC nationals who also have a permanent place of residence in the UAE or work or carry on business there. #### Tax residence The UAE levies no income tax on individuals, so wages, investment income and foreign-source income of an individual are not charged; only business turnover above AED 1 million (≈ $272,000) is within corporate tax. Tax residency is defined by Cabinet Decision No. 85 of 2022 (in force 1 March 2023): usual and primary residence plus centre of financial and personal interests, or 183 days, or 90 days with the stated additional links, in a 12-month period. #### Visas Holding a residence permit does not by itself determine tax residency; presence and ties do. #### Other taxes VAT 5% on goods and services; excise tax on specified goods; corporate tax 9% on taxable business income above AED 375,000 (≈ $102,000). Checked against official sources on 11 Oct 2026 [Change log](https://settleanywhere.com/changes/) Standard rules ### Corporate tax: 9% standard rate and Small Business Relief **Details** - On: Taxable income (accounting net profit adjusted under the corporate tax law) - Limit: AED 375k/yr ≈ $102k Resident companies and business-owning individuals pay 9% corporate tax on taxable income above AED 375,000 (≈ $102,000); 0% applies to the first AED 375,000 (≈ $102,000). Small Business Relief treats eligible businesses with revenue up to AED 3,000,000 (≈ $817,000) as having no taxable income, for tax periods ending on or before 31 December 2029. (sources 5, 6, 7, 8, 9) #### Taxed on Taxable income (accounting net profit adjusted under the corporate tax law). #### Who it applies to - Companies incorporated or effectively managed in the UAE, free zone persons and natural persons with business turnover above AED 1 million (≈ $272,000) are taxable persons and must register. - Small Business Relief: resident person elects for each tax period; revenue of AED 3,000,000 (≈ $817,000) or less in the current and all previous tax periods; available for tax periods starting on or after 1 June 2023 and ending on or before 31 December 2029 (Ministerial Decision No. 131 of 2026). #### Exclusions - Small Business Relief is not available to a Qualifying Free Zone Person or to a member of a multinational group with consolidated revenue above AED 3.15 billion (≈ $858,000,000). #### Limits - AED 375,000 a year (≈ $102,000) · 0% band of taxable income under the standard regime. - AED 3,000,000 a year (≈ $817,000) · Revenue ceiling for Small Business Relief in the current and all previous tax periods. #### Tax residence Returns and payment are due within 9 months of the end of the tax period. #### Visas Corporate tax status is independent of visa or residence permit. #### Other taxes VAT 5%; employer payroll and social obligations are separate. Checked against official sources on 12 Oct 2026 [Change log](https://settleanywhere.com/changes/) Standard rules ### UAE individuals: no personal income tax; Corporate Tax on business turnover above AED 1 million No personal income tax Foreign-source income: No personal income tax **Details** - Limit: AED 1M/yr ≈ $272k The UAE levies no income tax on individuals; foreign-source salary, investment and rental income of an individual is outside Corporate Tax. A natural person running a business in the UAE is subject to 9% Corporate Tax (0% on the first AED 375,000 (≈ $102,000) of taxable income) only once business turnover exceeds AED 1,000,000 (≈ $272,000) in a calendar year. (sources 11, 12, 13, 8, 9, 14) #### Taxed on Taxable income of a Business or Business Activity conducted in the UAE by a natural person whose turnover from it exceeds AED 1,000,000 (≈ $272,000) in a Gregorian calendar year; wage, personal investment income and real estate investment income are out of scope and not counted toward the threshold. #### Who it applies to - Applies to a resident or non-resident natural person conducting a Business or Business Activity (e.g. freelancing or sole proprietorship on own account) in the UAE. - Small Business Relief (simplified compliance, revenue up to AED 3 million (≈ $817,000)) may be elected for tax periods commencing on or after 1 June 2023 and ending on or before 31 December 2029, per Ministerial Decision No. 131 of 2026. - Freelance consultancy for a foreign client on the person's own account is business income, not wage, and counts toward the AED 1 million (≈ $272,000) turnover (FTA guide example). #### Exclusions - Wage (employment income) is not subject to Corporate Tax and not counted toward the AED 1 million (≈ $272,000) threshold. - Personal investment income and real estate investment income are out of scope regardless of amount. - Turnover not exceeding AED 1,000,000 (≈ $272,000) in the calendar year: no Corporate Tax registration or payment on that business income. #### Limits - AED 1,000,000 a year (≈ $272,000) · Turnover from a Business or Business Activity conducted in the UAE by a natural person; Corporate Tax applies only if exceeded. - AED 375,000 a year (≈ $102,000) · 0% rate band of taxable income; 9% applies to taxable income above it. - AED 3,000,000 a year (≈ $817,000) · Revenue ceiling for Small Business Relief (simplified compliance), claimable for tax periods ending on or before 31 December 2029. #### Days in the country - At least 183 days in 12 consecutive months · Physical presence in the UAE makes a natural person UAE tax resident under Cabinet Decision No. 85 of 2022. - At least 90 days in 12 consecutive months · Alternative residence test for UAE/GCC nationals or holders of a valid UAE residence permit who also have a permanent place of residence or a business in the UAE. #### Tax residence Tax residence (183-day test, or 90-day test with additional conditions) is needed for a UAE tax residency certificate and treaty use; it does not create personal income tax. The UAE does not tax individuals on foreign-source income because it levies no personal income tax. #### Visas Residence permit holders and visitors alike are outside personal income tax; a residence permit is one limb of the 90-day residence test. A natural person on a visit visa who works on own account is treated as conducting a business in the UAE (FTA example). #### Other taxes 5% VAT on goods and services applies; excise tax applies to specified goods; corporate tax applies to entities and qualifying natural-person businesses. Checked against official sources on 12 Oct 2026 [Change log](https://settleanywhere.com/changes/) ## VAT, social security and other taxes - VAT 5% on goods and services; excise tax on specified goods; corporate tax 9% on taxable business income above AED 375,000 (≈ $102,000). - VAT 5%; employer payroll and social obligations are separate. - VAT, customs duties, payroll and social obligations and emirate-level fees are separate and may apply. - 5% VAT on goods and services applies; excise tax applies to specified goods; corporate tax applies to entities and qualifying natural-person businesses. ## Questions people ask ### When do you become a tax resident in United Arab Emirates? At least 183 days in 12 consecutive months (Physical presence in the UAE; days need not be consecutive); At least 90 days in 12 consecutive months (Applies to UAE nationals, holders of a valid residence permit, or GCC nationals who also have a permanent place of residence in the UAE or work or carry on business there). The UAE levies no income tax on individuals, so wages, investment income and foreign-source income of an individual are not charged; only business turnover above AED 1 million (≈ $272,000) is within corporate tax. ### Is foreign-source income taxed in United Arab Emirates? No personal income tax. The UAE levies no income tax on individuals; foreign-source salary, investment and rental income of an individual is outside Corporate Tax. A natural person running a business in the UAE is subject to 9% Corporate Tax (0% on the first AED 375,000 (≈ $102,000) of taxable income) only once business turnover exceeds AED 1,000,000 (≈ $272,000) in a calendar year. ### Who qualifies for Qualifying Free Zone Person corporate tax treatment? Entity must be a Free Zone Person and satisfy all Qualifying Free Zone Person conditions, including adequate substance in a free zone, audited financial statements and transfer pricing documentation. No visa or residence permission is conferred by free-zone tax status. ### How are Virtual Work Visa holders taxed in United Arab Emirates? No special regime in our records is tied to the Virtual Work Visa. The standard rules apply: The UAE does not levy income tax on individuals; VAT is 5%. Individuals running a business in the UAE pay corporate tax only if business turnover exceeds AED 1 million (≈ $272,000) in a calendar year. ≈ USD figures are approximate: daily reference rates from ExchangeRate-API, dated 12 Oct 2026, refreshed when the site is updated. **Sources (14)** ## Official sources 1. [Taxation](https://u.ae/en/information-and-services/finance-and-investment/taxation) · UAE Government Portal (u.ae) · checked 2026-10-10 2. [Basis of Taxation - Natural Person](https://tax.gov.ae/en/taxes/corporate.tax/corporate.tax.topics/basis.of.taxation.natural.person.aspx) · Federal Tax Authority · checked 2026-10-11 · published 2024-05-06 3. [Cabinet Decision No. 85 of 2022 on Determination of Tax Residency](https://tax.gov.ae/Datafolder/Files/Legislation/Corporate%20Tax/Cabinet%20Decision%2085%20of%202022%20-%20For%20publishing.pdf) · Federal Tax Authority (legislation) · checked 2026-10-10 4. [Value Added Tax](https://tax.gov.ae/en/taxes/vat.aspx) · Federal Tax Authority · checked 2026-10-11 5. [Corporate Tax in the UAE](https://mof.gov.ae/corporate-tax/) · Ministry of Finance · checked 2026-10-11 6. [Free Zone Persons — Corporate Tax Guide](https://tax.gov.ae/Datafolder/Files/Guides/CT/Free%20Zone%20Persons%20-%2020%2005%202024%20final%20for%20GCD.pdf) · Federal Tax Authority · checked 2026-10-12 · published 2024-05-20 7. [Small Business Relief](https://tax.gov.ae/en/taxes/corporate.tax/corporate.tax.topics/small.business.relief.23.aspx) · Federal Tax Authority · checked 2026-10-11 8. [Ministerial Decision No. 131 of 2026 amending Ministerial Decision No. 73 of 2023 on Small Business Relief](https://mof.gov.ae/wp-content/uploads/2026/08/Ministerial-Decision-No.-131-of-2026-Amending-Certain-Provisions-of-Ministerial-Decision-No.-73-of-2023-on-Small-Business-Relief-for-the-Purposes-of-Federal-Decree-Law-No.-47-of-2022-EN.pdf) · Ministry of Finance · checked 2026-10-11 · published 2026-08 9. [Ministry of Finance announces extension of Small Business Relief until 31 December 2029](https://mof.gov.ae/en/news/ministry-of-finance-announces-extension-of-small-business-relief-for-corporate-tax-purposes-until-31-december-2029/) · Ministry of Finance · checked 2026-10-12 · published 2026-08-07 10. [Federal Tax Authority Issues Corporate Tax Guide on Free Zone Persons](https://tax.gov.ae/en/media.centre/news/federal.tax.authority.issues.corporate.tax.guide.on.free.zone.persons.aspx) · Federal Tax Authority · checked 2026-10-10 · published 2024-05-26 11. [Taxation (UAE does not levy income tax on individuals)](https://u.ae/en/information-and-services/finance-and-investment/taxation) · UAE Government Portal (u.ae) · checked 2026-10-10 12. [Corporate Tax Guide: Taxation of natural persons under the Corporate Tax Law (CTGTNP1)](https://tax.gov.ae/Datafolder/Files/Guides/CT/Taxation%20of%20natural%20persons%20-%2025%2011%202023.pdf) · Federal Tax Authority · checked 2026-10-10 · published 2023-11-25 13. [Cabinet Decision No. 49 of 2023 on categories of businesses or business activities of natural persons subject to Corporate Tax](https://mof.gov.ae/wp-content/uploads/2023/05/Cabinet-Decision-No.-49-of-2023.pdf) · Ministry of Finance · checked 2026-10-11 · published 2023 14. [Tax Resident and Tax Residency Certificate guide (TPGTR1)](https://tax.gov.ae/Datafolder/Files/Guides/VAT/VAT%20Guides/Tax-Resident-and-TRC--18-10-2024.pdf) · Federal Tax Authority · checked 2026-10-10 · published 2024-10-18