Many expatriates and investors moving to the UAE ask: “is Dubai tax-free?” The short answer is largely yes — especially when it comes to personal income — but the full picture includes a few important nuances.

First and foremost, Dubai is tax-free on personal income for foreign nationals. There is no personal income tax on salaries, wages, rental earnings, dividends, or capital gains for individuals living and working in Dubai. This means your take-home pay isn’t reduced by income tax deductions, making Dubai particularly attractive for professionals migrating from high-tax countries.

However, saying the emirate is completely tax-free can be misleading if you consider the broader fiscal framework. In 2018, the UAE introduced a 5 % Value Added Tax (VAT) on most goods and services, which residents and visitors pay at the point of purchase. This indirect tax affects everyday spending but does not apply to personal income.

Another major development in the UAE’s tax landscape was the launch of corporate tax in 2023. A federal corporate tax regime now applies at 9 % on annual profits exceeding AED 375,000 for businesses operating in Dubai. Profits below this threshold remain tax-free, and qualifying companies in many free zones can still benefit from 0 % corporate tax under specific conditions.

Despite these business-related taxes, for most expatriates the answer to is Dubai tax-free remains positive: if your income comes as personal salary, investment gains, or rental earnings, you pay no direct tax in Dubai.

In summary, Dubai offers a highly tax-friendly environment for foreign nationals, with zero personal income tax and competitive business tax rules. While indirect taxes like VAT exist and corporate tax applies to profitable companies, the overall system still provides major financial advantages compared with many other countries.