How to pay yourself from a UAE company

Once a UAE company is trading, its owner needs to decide how to take money out of it. The UAE has no personal income tax, but the choice between salary and dividends still matters for the company's corporate tax. This guide explains the rules under Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses (the Corporate Tax Law).

No personal income tax in the UAE

There is no federal or emirate-level personal income tax in the UAE. A salary or dividend received by an individual is therefore not taxed in the UAE in their hands. Corporate tax applies at the level of the company: 0% on taxable income up to AED 375,000 and 9% above that amount.

If you remain tax resident in another country, or still have obligations there, that country may tax what you take out. Settle your residence position first; see is Dubai really tax-free? and UAE tax residency certificate.

Option 1: a salary

A salary paid to an owner, director or officer can reduce the company's taxable income, but only within limits:

• Connected persons (Article 36): owners, directors and officers of a company, and their related parties, are connected persons. A payment or benefit to a connected person is deductible only if it corresponds with the market value of the service provided and is incurred wholly and exclusively for the business.
• Related parties (Articles 34 and 35): an individual who owns 50% or more of a company, or controls it, is a related party of the company. Transactions with related parties must meet the arm's length standard. The FTA treats a person who is both a related party and a connected person as a related party.
• Who counts as an officer: in Public Clarification CTP010 of 29 April 2026, the FTA explained that the test looks at actual authority, such as the power to make strategic decisions or bind the company, rather than job titles.
• Disclosure: the FTA currently requires disclosure in the corporate tax return where payments or benefits to connected persons exceed AED 500,000 in a tax period.

In practice, a salary that matches what the company would pay an unrelated person for the same role is deductible. Any excess is not.

Option 2: dividends

Dividends and other profit distributions paid to an owner are not deductible (Article 33). They come out of profit that has already borne corporate tax at company level. On the other hand:

• the UAE applies withholding tax at 0% on payments to non-residents, so a dividend paid to a shareholder abroad suffers no UAE withholding tax;
• dividends from a UAE resident company to a UAE holding company are exempt from corporate tax. See UAE holding company.

Many owners combine a market-value salary with dividends from the remaining profit.

Working in your own name

An individual who runs a business without a company does not pay themselves a salary. Under Article 33, amounts withdrawn from the business by a natural person who is a taxable person are not deductible. Such an individual is subject to corporate tax only where turnover from the business exceeds AED 1 million in a calendar year. See corporate tax for freelancers.

Small businesses

A resident business with revenue of up to AED 3 million can elect for Small Business Relief and be treated as having no taxable income. Under Ministerial Decision No. 131 of 2026, the relief applies to tax periods ending on or before 31 December 2029. Where the relief is claimed, the deductibility of a salary makes no difference to the tax bill for that period. See our post on the extension.

What to document

• A written employment contract or board resolution setting out the owner's role, duties and pay.
• Evidence that the pay is at market value, such as salary surveys or comparable roles, especially where it is significant.
• Board or shareholder resolutions for each dividend, with accounts showing distributable profit.
• A record of all payments and benefits to owners, directors and their families, so they can be disclosed correctly in the return.

Our accounting and virtual CFO and corporate tax services can set up a remuneration policy and keep the records in order.

Sources

• Ministry of Finance: Federal Decree-Law No. 47 of 2022 and its amendments
• Ministry of Finance: Cabinet Decision No. 116 of 2022 on the annual taxable income subject to corporate tax
• KPMG: FTA clarifies directors and officers under Article 36 (CTP010)
• PwC Worldwide Tax Summaries: UAE taxes on personal income
• PwC Worldwide Tax Summaries: UAE withholding taxes
• Entrepreneur Middle East: UAE extends Small Business Relief through 2029

This page gives general information as at the date shown and is not advice for your specific situation. Rules in other countries are summarised for orientation; your home-country position should be confirmed before you act.