What is the tax regime in Dubai vs. Abhu Dhabi?

Dubai International Financial Center (DIFC) Gate Dubai

Tax Regime in Dubai (2025 Overview)

• Personal Income Tax: 0% on salaries, wages, dividends, bonuses, and most personal income for residents and expats (no federal or emirate-level tax).

  
  

• Corporate Tax: 9% on business profits exceeding AED 375,000 (~$102,000 USD); 0% below that threshold. Free zone companies may qualify for 0% if meeting criteria (e.g., no mainland dealings).

  
  

• Value-Added Tax (VAT): 5% on most goods and services; exemptions for healthcare, education, and certain financial services.

  
  

• Excise Tax: 50–100% on harmful goods (e.g., tobacco, energy drinks, sugary beverages).

  
  

• Other Taxes: No capital gains, inheritance, or wealth taxes; property transfer fee is 4% on real estate sales. New 2025: 15% Domestic Minimum Top-Up Tax (DMTT) for large multinationals (global revenue > €750M) to align with OECD standards.

  
  

• Key Benefits for Expats: Tax-free salaries make Dubai attractive; however, businesses must register and comply with federal rules.

Differences in Abu Dhabi

• Overall Similarity: Abu Dhabi follows the same federal UAE tax regime as Dubai (0% personal income tax, 9% corporate tax, 5% VAT, etc.)—no major differences in core taxes, as they're unified nationally.

  
  

• Minor Variations: Property transfer fees are lower at 2% (vs. Dubai's 4%); free zones in Abu Dhabi (e.g., ADGM) focus more on finance/asset management with similar tax exemptions, but may have slight regulatory nuances (e.g., stricter for sovereign funds).

  
  

• 2025 Context: DMTT applies equally; Abu Dhabi's oil-heavy economy may influence excise taxes indirectly, but personal/business taxes remain identical to Dubai.

Important, please read:

For personalized advice, consult the UAE Federal Tax Authority or a tax advisor, as rules can evolve.