The United Arab Emirates is a federation of seven emirates, with autonomous emirate and local governments. UAE does not have any enforced federal income tax legislation for general business. An income tax decree has been enacted by each Emirate, but in practice, the enforcement of these decrees is restricted to foreign banks and to oil companies.
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Value Added Tax
It was announced that a VAT will be applied in the UAE at a rate of 5%, 100 food items, health, education, bicycles and social services would be exempt from VAT. The implementation date is set on January 1, 2018.
Other taxes
Municipal taxes are levied in most Emirates on annual rental paid at 5% for residential premises and 10% for commercial premises.
Other local taxes include a 5% tax on hotel services and entertainment.