Module V·Article IV·~1 min read
Taxation of Individuals in the UAE
UAE and DIFC Tax Regime
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No Personal Income Tax: What Does It Mean
The UAE does not levy personal income tax on individuals. This applies to: salary and bonuses, dividends and interest, capital gains, rental income, and freelance income.
For high net worth individuals, the UAE is one of the most attractive jurisdictions in terms of tax burden.
Social Contributions (GPSSA)
UAE citizens: are required to pay contributions to the General Pension and Social Security Authority (GPSSA): 5% employee + 15% employer. Expats: are exempt from GPSSA. Contributions to the country of citizenship — voluntary or mandatory according to the legislation of the home country.
Indirect Taxes
VAT (5%): applies to most consumer spending. VAT refund for tourists (Tax Refund for Tourists) — upon departure from the UAE.
Excise Tax: on alcohol (50%), tobacco (100%), energy drinks (100%). Collected at the import/production level.
Municipal Tax: for certain types of services (hotels, restaurants — Tourism Dirham, Service Charge).
UAE as a Wealth Management Hub
Zero direct taxes + developed banking infrastructure + political stability → the UAE has become the largest wealth management center in the Middle East.
Family Offices, HNWI (High Net Worth Individuals), UHNWI are relocating their wealth center to the UAE for tax optimization. Golden Visa — long-term resident visa (10 years) for investors (from AED 2 million in real estate) and "outstanding individuals".
Practical Assignment
A top manager (Russian citizen) relocates to Dubai with his family. Salary — $500 thousand/year, bonus — $200 thousand/year, dividends from a Russian company — $100 thousand/year. (1) What is his tax burden in the UAE? (2) What is the tax burden if he retains Russian residency? (3) How to correctly formalize the change of residency?
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