Types of Taxes in Abu Dhabi
Abu Dhabi, the capital of the United Arab Emirates (UAE), is known for its tax-friendly environment. However, with the introduction of certain taxes, maintaining tax compliance in Abu Dhabi has become an essential part of the business landscape. One of the key taxes is the Value Added Tax (VAT), which was implemented in 2018 at a rate of 5%. VAT applies to most goods and services, though some are exempt, such as basic food items, healthcare, and education. Another significant tax is the Corporate Tax, which came into effect in June 2023, applying to businesses with profits exceeding AED 375,000 at a rate of 9%. This is part of efforts to align with international tax standards.
Abu Dhabi also imposes a municipal property tax on real estate, calculated based on the annual rental value of the property. Additionally, there are sector-specific taxes, such as excise tax on harmful products like tobacco and sugary drinks. While there is no personal income tax in Abu Dhabi, social security contributions are required depending on an individual’s nationality. Tax compliance in Abu Dhabi ensures businesses and individuals follow the legal requirements, contributing to the country’s infrastructure, healthcare, and economic growth while promoting long-term sustainability.
Abu Dhabi also imposes a municipal property tax on real estate, calculated based on the annual rental value of the property. Additionally, there are sector-specific taxes, such as excise tax on harmful products like tobacco and sugary drinks. While there is no personal income tax in Abu Dhabi, social security contributions are required depending on an individual’s nationality. Tax compliance in Abu Dhabi ensures businesses and individuals follow the legal requirements, contributing to the country’s infrastructure, healthcare, and economic growth while promoting long-term sustainability.