Key tax rules for European expatriates living and working in the UAE. Updated for 2026. This is a quick-reference summary. For the full analysis including corporate tax, free zone structures, and pension transfer options, see the related pages below.
What individuals pay on income in the UAE
The UAE has never levied a personal income tax on individuals, whether UAE nationals or expatriates. This applies to salary, bonuses, investment income, dividends, and pension drawdown. The federal corporate tax introduced in June 2023 did not change this position, because it applies only to business profits, not personal earnings.
How you become a UAE tax resident
Cabinet Resolution No. 85 of 2022, effective 1 March 2023, sets out three routes to UAE tax residency. Meeting any one of them is sufficient.
- Route 1: Centre of life Your principal place of residence and the centre of your financial and personal interests are in the UAE.
- Route 2: 183-day presence Physical presence in the UAE for 183 days or more within any consecutive 12-month period. Days do not need to be consecutive.
- Route 3: 90-day conditional test Physical presence of 90 days or more within a consecutive 12-month period, available only to UAE nationals, UAE residence permit holders, or GCC nationals who have a permanent home in the UAE or a job or business there.
A UAE Tax Residency Certificate (TRC) can be applied for via the Federal Tax Authority portal once one of these routes is met. Establishing UAE tax residency is a separate question from establishing UK non-residence under the Statutory Residence Test; both need to be confirmed independently for the DTA position to hold.
Capital gains, inheritance, and gift treatment
The UAE has no general capital gains tax, no inheritance tax, and no gift tax at the individual level. Gains from selling shares, funds, or property are not taxed personally. Estate and succession planning in the UAE is instead governed by DIFC or ADGM wills registries, or forced-heirship rules under UAE civil law where no registered will exists.
What businesses and freelancers pay
| Taxable Income Band | Rate |
|---|---|
| Up to AED 375,000 | 0% |
| Above AED 375,000 | 9% |
Introduced under Federal Decree-Law 47 of 2022, effective from financial years starting on or after 1 June 2023. A Qualifying Free Zone Person can retain a 0% rate, but only on income that meets the "qualifying income" definition; non-qualifying income above 5% of total revenue (or AED 5 million, whichever is lower) causes the entire entity to lose the 0% treatment for that period. This regime applies to business and freelance licence income, not to personal employment income, investment income, or pension drawdown.
Key DTA partners
The UAE has an extensive DTA network. Key provisions for European expats:
DIFC, ADGM, and the mainland
The UAE runs the mainland Securities and Commodities Authority (SCA) framework alongside two financial free zones operating to international common-law standards: the Dubai International Financial Centre (DIFC), regulated by the DFSA, and Abu Dhabi Global Market (ADGM), regulated by the FSRA. Advice quality and regulatory protection vary meaningfully between mainland distribution and DIFC/ADGM-licensed firms.
VAT and other levies
- 5% VAT Standard rate, introduced 1 January 2018, applies to most goods and services.
- 1 June 2023 Effective start date for the federal corporate tax regime under Federal Decree-Law 47 of 2022.
- 1 March 2023 Effective date of the current individual tax residency criteria under Cabinet Resolution 85 of 2022.
- No ROPS No UAE-registered or DIFC-registered pension scheme currently appears on HMRC's Recognised Overseas Pension Schemes notification list. See the UK to UAE pension transfer guide.
Get the UAE tax and pension checklist
Tax residency triggers, filing obligations, and pension planning points for European expats in the UAE.