The UAE has a relatively low-tax regime, with no personal income tax, and corporate tax rates that vary depending on the type of business and industry. The main types of corporate taxation in the UAE are Corporate Income Tax (CIT) for the oil and gas sector, Value-Added Tax (VAT), and Import Duties. There are no export duties or sales taxes in the UAE. The rates for VAT and import duties vary depending on the type of goods or services, and businesses should consult with the FTA to determine the appropriate rate.
Types of Corporate Taxation in the UAE:
- Corporate Income Tax (CIT):
The UAE does not levy any Corporate Income Tax (CIT) on companies except for those operating in the oil and gas sector, where the CIT rate is 55%. This was established in accordance with Federal Decree-Law No. 13 of 2016.
- Value-Added Tax (VAT):
Value-added tax (VAT) was introduced in the UAE on January 1, 2018, with a standard rate of 5%. VAT is levied on most goods and services, including imports. However, some goods and services are exempt from VAT, such as residential properties, certain financial services, and healthcare services. VAT is governed by Federal Law No. 7 of 2017 and its Executive Regulations.
- Sales Tax:
There is no sales tax in the UAE.
- Import Duties:
Import duties are levied on goods imported into the UAE. The rates of import duty vary depending on the type of goods and their country of origin. Import duties can range from 0% to 100% of the customs value of the goods. The UAE's customs duty rates are governed by the GCC Customs Union Tariff, which was introduced in 2003. The rates are regularly updated, and businesses should consult with the FTA to determine the appropriate rate.
- Export Duties:
The UAE does not levy any export duties.
Tax Brackets in the UAE:
As mentioned earlier, the UAE does not levy any Corporate Income Tax (CIT) on companies, except for those operating in the oil and gas sector, where the CIT rate is 55%. The oil and gas sector is also subject to an additional tax known as the Hydrocarbon Tax, which is imposed on the production of crude oil and natural gas.
VAT or GST in the UAE:
The UAE levies Value-added tax (VAT), which was introduced on January 1, 2018, at a standard rate of 5%. The VAT is levied on most goods and services, including imports. The VAT system is administered by the Federal Tax Authority (FTA).
Related Information
