The debate on the question of whether high taxation makes wealth a burden has rekindled discussions on world tax models. While India deliberates on a potential tax exemption up to 12 Lakh, many have highlighted the zero tax policy on the income of Dubai, which allows residents to keep their entire winnings. The comparison has led to a more in -depth examination of the way Dubai supports its economy without taxing individual income while retaining one of the most luxurious lifestyles in the world.
Dubai has long been known for its futuristic roofs and economic prosperity, but its policy of benefits in the tax franchise makes it an even more attractive destination for individuals. Residents, including expatriates, do not pay income tax of individuals, which gives them total control over their income. This system allows more available available income, more investment possibilities and, in some cases, allows expatriates to ask the tax residence of water to optimize their tax obligations in their country of origin.
Despite the lack of individual income tax, Dubai has established a structured tax system for companies and specific sectors. In 2023, the water introduced a company tax of 9% on the profits of companies exceeding 375,000 AED. Meanwhile, oil companies are taxed at rates ranging from 55% to 85%, and foreign banks are subject to a fixed tax of 20% of companies.
Other sources of income include a value added tax of 5% (VAT), implemented in 2018, which applies to most goods and services. In addition, municipal taxes are taken from property and public services bills, while the tourism sector contributes to taxes imposed on hotels, restaurants and services related to travel.
Dubai maintains his call for entrepreneurs by providing tax exemptions for start-ups and small businesses earning less than 375,000 AED. This exemption supports business growth and attracts investors while ensuring that large companies contribute to the government’s income model.
Dubai also benefits from complete double taxation agreements (DTA) with more than 100 countries, including major economies such as the United Kingdom, India and the United States. These agreements prevent individuals and companies from being taxed twice on the same income, strengthening Dubai’s reputation as a friendly hub.
While residents benefit from a free salary ecosystem, the structured tax model of Dubai on businesses and industries provides stable government income, maintaining its position of global economic power.
