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The story of “0% tax in Dubai” has not been true since 2018. The UAE has had VAT (5%) since 2018, and corporate tax (9% above AED 375,000) since 2023. For residents, income tax remains 0% — provided they have genuine residency. For Dutch nationals with substance and a good structure: there is still a substantial advantage over Dutch corporate income tax (19-25.8%) and Dutch Box 1 tax (49.5%). Below is the realistic calculation and what it actually yields.
The short answer
- UAE Corporate Tax: 9% above AED 375,000 (~95,000 euros) since June 2023.
- UAE VAT: 5% since 2018, for most deliveries.
- UAE Income Tax: 0% for residents (no income tax on salary).
- No inheritance tax, no wealth tax.
- For Dutch nationals: benefit only with emigration + substance.
The three taxes that do exist
1. UAE Corporate Tax (9% since 2023)
- Applies to all UAE companies with profits > AED 375,000 (~95,000 euros).
- Below this amount: 0%.
- Free zone QFZP status: 0% on “qualifying income” subject to conditions.
- First return filed from 2024 for the 2023 financial year.
2. UAE VAT (5% since 2018)
- 5% on most deliveries and services.
- 0% on exports outside the GCC.
- Companies with a turnover of more than 375,000 require AED registration.
- Quarterly or annual return.
3. Excise tax
- Specific products: tobacco (100%), energy drinks (100%), sugary drink (50%).
- Relevant for specific industries.
What is missing
- No income tax: for residents 0% income tax on salary and private income.
- No wealth tax: no Box 3 equivalent.
- No inheritance tax: no levy upon death.
- No capital gains tax: on the sale of private property.
- No dividend tax: for residents on distributions from UAE companies.
Comparison with the Netherlands
| Tax | The Netherlands | UAE |
|---|---|---|
| Low corporate tax | 19% (up to 200k) | 9% (above 95k euros) |
| Corporate tax high | 25.8% (above 200k) | 9% (everything above 95k) |
| IB max | 49.5% box 1 | 0% |
| Box 2 dividend | 24,5%-31% | 0% (for resident) |
| VAT | 21% | 5% |
| Box 3 assets | ~36% on notional return | 0% |
| Inheritance tax | 10-40% | 0% |
Floor (Director-major shareholder, 300,000 euros profit, dividend paid out):
- NL: Corporate income tax (~60k) + Box 2 (~50k on net dividend) = ~110,000 euros tax (37%).
- Dubai: 9% corporate tax (~28k), 0% IB = 28,000 euros (9%).
- Difference: 82,000 euros/year.
But… substance costs
The difference of 82,000 euros/year is gross. Substance costs Dubai:
- Office + employee: 50,000-80,000 euros/year.
- Consultants: 10,000-20,000 euros/year.
- Living in Dubai (vs. NL): possibly higher.
- Travel between the Netherlands and Dubai (if not full emigration): 10,000+ euros.
Net benefit typically 30-50% of the gross figure. For Floor: 25-40k euros/year net benefit.
When is it rewarding?
- < 200,000 euros profit/year: rarely worthwhile – Dubai costs eat away at the profit.
- 200-500,000 euros: marginal benefit, only with a good structure.
- 500,000-2 million: substantial benefit possible.
- > 2 million: almost always rewarding with substance.
NL-UAE Tax Treaty
NL-UAE Tax Treaty (2007, in force 2010):
- Prevents double taxation.
- Tiebreaker in case of dispute regarding domicile.
- 0% withholding tax on dividends under conditions.
- 0% withholding tax on royalties.
- MLI clause since 2019 (anti-abuse).
The Treaty does not prevent substance requirements — those are national/EU.
Honest recommendation
The tax benefit of Dubai is realistic but has diminished since 2018 (VAT) and 2023 (corporate tax). For Dutch nationals with international activity and a willingness to genuinely emigrate: still a substantial benefit. For a “paper” structure or Dutch residency: almost always disadvantageous after adjustment and costs. Calculate everything precisely with an international tax specialist — do not rush into anything.
For other topics: UAE Corporate Tax, tax comparison and substance requirements.
Frequently Asked Questions
Since June 2023: no for companies. UAE Corporate Tax 9% above AED 375,000 (~95,000 euros). Since 2018: 5% VAT. However: 0% income tax for residents, no wealth or inheritance tax.
With 300,000 euros in profit and dividends: NL ~37% effective, Dubai ~9%. Gross difference 28 percentage points = 82,000 euros/year. Net after substance costs: 30-50% of gross = 25-40k euros/year. More for higher profits.
Qualifying Free Zone Person: free zone company with 0% corporate tax on “qualifying income” provided substance conditions are met. Strict requirements: real activity, adequate substance, no local UAE trade (mainland) of qualifying income.
In the event of full emigration to Dubai: yes, the Dutch Box 3 capital yield tax ceases (no Dutch tax liability). For those remaining in the Netherlands: Box 3 continues to apply – also to Dubai assets.
The NL-UAE tax treaty (since 2010) prevents double taxation and regulates the allocation of taxing rights. 0% withholding tax on dividends and royalties under certain conditions. MLI clause since 2019 for anti-abuse. Does not prevent substance requirements.
Under 200,000 euros/year: rarely rewarding, Dubai costs eat away at the benefit. 200-500k euros: marginal benefit with good structure. 500k-2M: substantial benefit. > 2M: almost always rewarding with substance.
Consider Dubai with every serious consideration. Combination of Dutch tax specialist (for residence, place of establishment, ATAD) + UAE tax specialist (for corporate tax, VAT, QFZP). Investment of 10-30k euros for the initial phase – pays for itself many times over.
