Expatriate taxation in Dubai: understanding, anticipating, optimizing

A tax system designed to attract talent and capital

No income tax

One of the pillars of Dubai's attractiveness is the complete absence of personal income tax. Salaries are paid without deduction, which boosts the purchasing power and investment capacity of expatriates. This model is based on a service and import economy where direct taxation has been replaced by targeted, low‑rate levies.

VAT and consumption taxes

Since 2018, a 5% VAT has applied to most goods and services. This rate remains moderate compared to the European average. Other taxes exist, notably excise duties on products deemed harmful (alcohol, tobacco, sugary drinks). Some municipalities add taxes on hotels and restaurants, contributing to the financing of local infrastructure.

Corporate tax

Since June 2023 , the United Arab Emirates has introduced a 9% federal corporate tax, applicable to profits exceeding AED 375,000 (approximately €95,000). This measure aims to comply with OECD standards while maintaining a competitive environment. SMEs, startups, and companies in free zones often remain exempt, subject to compliance requirements.

Free trade zones: a strategic lever for investors

Free zones are one of Dubai's major assets. They allow foreign companies to own 100% of the capital , repatriate all their profits and, in many cases, benefit from a corporate tax exemption of up to 50 years .
Each zone targets a specific sector: technology (Dubai Internet City), finance (DIFC), logistics (JAFZA), healthcare (Dubai Healthcare City), etc. The choice of zone therefore depends on the nature of the project and the business model.

France‑United Arab Emirates tax treaty: avoiding double taxation

A protective framework for French residents

Signed to prevent double taxation , the tax treaty between France and the United Arab Emirates determines which country can tax each category of income. Salaries earned in Dubai by a local tax resident are not taxable in France . This principle extends to most professional and private income, with the exception of public pensions, which remain taxable in France.

Income concerned

The agreement covers salaries, dividends, interest, royalties, property income, and business profits. In some cases, a tax credit is applied in France to avoid double taxation.
However, expatriates must declare their foreign income for informational purposes in their French annual tax return, even when it is not taxable.

Tax obligations in France after departure

Determining one's tax residence

Tax residence determines the country where you are liable for tax. In France, three criteria apply:

• the main focus remains in France

• the length of stay exceeds 183 days per year,

• or the main source of income remains French.

If none of these criteria are met, tax residency shifts to Dubai. This recognition is often formalized by a certificate of Emirati tax residency .

Foreign tax returns and accounts

Non‑resident expatriates must continue to declare their French‑source income (rent, public pensions, dividends).
All bank accounts opened abroad must also be declared to the French administration, under penalty of significant fines.

IFI and exit tax

• IFI : a non‑resident remains taxable only on real estate located in France.

• Exit tax : This applies to holders of significant shareholdings leaving France. Tax on unrealized capital gains is suspended until the shares are sold. Therefore, estate planning before departure is recommended.

France vs. Dubai: Two opposing tax models

As a result, net disposable income in Dubai is often 30 to 50% higher than that of an equivalent position in France, depending on salary level and family expenses.

Practical tips for a successful expatriation

1. Clarify your tax residence
   before departure and keep all supporting documents (contract, payslips, lease, certificates).

2. Conduct a wealth audit
   to anticipate IFI, exit tax or inheritance tax.

3. Declare your foreign accounts
   to the French administration, even if you are a non‑resident.

4. Take advantage of the tax treaty
   to avoid double taxation.

5. Invest in local real estate
   to benefit from a stable tax environment and a growing market.

6. Surround yourself with experts :
   Tax specialists, wealth management advisors and specialized real estate agencies in Dubai.

Conclusion: a tax system designed for mobility and investment

Dubai's tax environment is based on a logic of attraction: attracting talent, capital, and businesses through stability and simplicity. For French expatriates, this presents an opportunity for legal optimization , provided they carefully understand the distinction between local advantages and remaining French tax obligations.

Preparing for departure, securing one's tax status and investing wisely are the keys to a successful expatriation.
Dubai is not just about the absence of taxes: it is a structured economic ecosystem , where transparency and planning are the best allies for wealth building success.