Spotlight On Can I Pay Myself Tax-Free in Dubai? The Truth About Salaries, Dividends & Business Income

If you’re an expat running a business in Dubai, you may be able to pay yourself without paying income tax.

But the landscape is changing with UAE corporate tax, international compliance rules, and proper business structuring becoming more important than ever.

Here’s how to stay smart, legal, and tax-efficient in 2025 and beyond.

A Quick Introduction

Why So Many Expats Choose Dubai for Business

Dubai’s popularity among global entrepreneurs is no accident. The UAE offers:

0% personal income tax

Business-friendly regulation

Robust financial infrastructure

Attractive lifestyle and residency options

But as global tax scrutiny increases, especially on offshore income and controlled foreign companies (CFCs), how you pay yourself from your Dubai-based business matters more than ever.

Salary vs. Dividends: What's the Difference?

💼 Option 1: Paying Yourself a Salary

You can legally pay yourself a salary from your Dubai business, and here’s the upside:

• No personal income tax in the UAE on your salary

• Allows for visa and residency sponsorship

• Creates a clear employment relationship

But watch out:

If you're a tax resident in another country (like the UK or US), that salary could be taxable there, depending on where your tax residency lies and how you’ve structured your affairs.

✅ Best for: Expats fully based in the UAE with no tax residency ties abroad.

📈 Option 2: Taking Dividends from Your Company

If your company is generating profit, you can distribute that to yourself as a dividend, especially if you’re a shareholder.

Benefits of dividends in Dubai:

• No withholding tax on UAE dividends

• No capital gains tax or income tax in UAE

• Greater flexibility in timing and distribution

⚠️ Important: Make sure your business is properly licensed and that profit distributions are clearly documented.

✅ Best for: Entrepreneurs wanting to optimise profit withdrawal without inflating employment costs.

What About UAE Corporate Tax?

Since June 2023, the UAE introduced a 9% corporate tax on profits exceeding AED 375,000. Here's how it impacts you:

Salaries are considered business expenses and reduce taxable profits

Dividends are paid from post-tax profits (so your company pays 9%, then you take the rest — but you don’t pay personal tax)

Good news: Free Zone entities may still qualify for 0% corporate tax under certain conditions. Speak to a Dubai tax advisor to see if your business qualifies.

Don't Forget About International Tax Rules

If you:

• Hold a passport from a country with global income tax rules (e.g. US)

• Have residential ties to countries like the UK or Australia

• Are using Dubai as a temporary base but still spend significant time in your home country...

Then you need to be extra careful. Offshore income might be reportable — or taxable — elsewhere. Tools like:

• Double tax treaties (DTTs)

• Proper tax residency status

• Non-dom planning

...can help, but only if you plan ahead.

Business Structures That Maximise Efficiency

To optimise your income in Dubai:

• Use a Free Zone company for potential tax-free treatment

• Maintain separate personal and company bank accounts

• Pay yourself a modest salary + dividends for flexibility

• Ensure tax residency documentation is solid

• Keep up with corporate tax filing requirements

🧠 Real Example: Alex, a UK Consultant in Dubai

• Alex moved from London to Dubai and set up a Free Zone consultancy. He:

• Paid himself AED 15,000/month salary

• Took quarterly dividends from profits

• Retained UK non-residency status using the Statutory Residence Test

• Paid zero personal tax and remained fully compliant

With expert tax planning, he saved over £20,000 in unnecessary overseas taxes in just one year.

Final Word: Speak to a Dubai Tax Expert First

At The Tax Faculty, we specialise in helping Dubai-based expats:

• Structure their income properly

• Minimise global tax exposure

• Comply with new UAE corporate tax laws

• Avoid double taxation and penalties

💬 Want to pay yourself smarter — not harder?

Book a consultation with our Dubai tax team and unlock your full income potential.