In short: There is no personal income tax in the UAE. Your salary, personal investment income and rental income from property you own personally are not taxed, as long as the investment activity does not need a licence. The exception is business income: if an individual’s turnover from business activities in the UAE exceeds AED 1 million in a calendar year, they must register for corporate tax and pay 9% on taxable income above AED 375,000.
No income tax on individuals
The UAE government states plainly that it does not levy income tax on individuals. Employees do not pay tax on their salary, and there is no annual personal tax return.
That does not mean there are no taxes. VAT at 5% applies to most goods and services you buy, and businesses pay corporate tax. But your employment income is your own.
When an individual does pay corporate tax
Corporate tax can apply to individuals who run a business in their own name, such as freelancers, sole establishments and self-employed professionals. Cabinet Decision No. 49 of 2023 sets the rule: an individual is subject to corporate tax only if the total turnover from their business or business activities exceeds AED 1 million in a Gregorian calendar year (1 January to 31 December).
Once over the threshold, the individual must register for corporate tax and file returns. The normal rates then apply to their taxable business income: 0% up to AED 375,000 and 9% above it.
What is not counted
Cabinet Decision No. 49 of 2023 excludes three types of income when deciding whether an individual is in business for corporate tax:
- Wages: salary and other employment income;
- Personal investment income: for example, returns from shares or savings you invest in personally; and
- Real estate investment income: for example, rent from property you own personally.
The investment exclusions apply only where the activity is not carried on, and is not required to be carried on, under a licence. If you trade property or securities as a licensed business, the income can be business income.
Examples
- An employee earning AED 600,000 a year pays no income tax on that salary.
- A landlord with two personally owned apartments pays no corporate tax on the rent, provided no licence is needed for the activity.
- A freelance consultant billing AED 1.4 million in 2026 is over the AED 1 million turnover threshold and must register for corporate tax.
- A freelancer billing AED 800,000 is under the threshold for that year, but should monitor turnover each year.
What about VAT?
VAT is separate from corporate tax. An individual making taxable supplies above AED 375,000 in 12 months must register for VAT, whatever their corporate tax position. Freelancers often cross the VAT threshold long before the corporate tax one.
Frequently asked questions
Is there income tax in the UAE?
No. The UAE does not levy income tax on individuals, so salaries are not taxed.
Do freelancers pay tax in the UAE?
Only if their business turnover exceeds AED 1 million in a calendar year. Then they must register for corporate tax, which is charged at 9% on taxable income above AED 375,000. VAT registration may be needed at a lower level.
Is rental income taxed in the UAE?
Rent from property you own personally is excluded from corporate tax, as long as the activity does not need a licence.
Do I need to file a personal tax return in the UAE?
No, unless your business turnover makes you subject to corporate tax.
Get help from Alif
Alif is an accounting and tax firm in Dubai, with a tax team led by an FTA-registered Tax Agent. We help freelancers and business owners check whether they are in scope for corporate tax or VAT, register on time and keep the records the FTA expects. Book a free consultation to discuss your position.