Tax Comparison: Germany Vs UAE

German investors and entrepreneurs are increasingly exploring the UAE as an international hub for business expansion, and for good reason. Understanding the tax landscape is one of the most crucial factors when expanding or relocating abroad.

In 2025, the United Arab Emirates continues to shine as a low-tax, business-friendly jurisdiction, while Germany maintains a structured, progressive tax system with higher personal and corporate tax rates.

For those seeking efficiency, growth, and simplicity, the UAE offers a clear advantage.

Germany and the United Arab Emirates (UAE) have fundamentally different tax systems. For individuals and businesses considering relocation or investment, understanding these differences can help shape a more strategic decision.

1. Income Tax

Germany: Germany operates on a progressive income tax system, with rates ranging from 0% to 45%. The top rate applies to annual income exceeding approximately €274,613 for single taxpayers.

UAE: The UAE imposes no personal income tax, making it especially attractive for expatriates, entrepreneurs, and high-income earners who want to maximize their net earnings.

2. Corporate Tax

Germany: Germany’s corporate tax rate is around 15%, with an additional 5.5% solidarity surcharge, bringing the effective rate to approximately 15.825%. When local trade taxes are added, the total corporate tax burden can rise significantly.

UAE: In contrast, the UAE has introduced a corporate tax of only 9% on profits exceeding AED 375,000 (around €90,000). This remains one of the lowest corporate tax rates globally, offering greater flexibility for international entrepreneurs.

3. Value Added Tax (VAT)

Germany: Germany applies a 19% standard VAT rate, with a reduced 7% rate for specific goods and services.

UAE: The UAE maintains a 5% VAT rate, among the lowest in the region — another reason why many businesses prefer Dubai as their operational base.

4. Property Tax

Germany: Property owners in Germany are subject to a property tax (Grundsteuer), which varies depending on the municipality and the property’s assessed value.

UAE: The UAE does not impose an annual property tax. However, owners may incur certain registration or service fees, a more transparent and cost-effective system for investors.

5. Social Security Contributions

Germany: Both employers and employees contribute to Germany’s comprehensive social security system, which covers health, pension, unemployment, and long-term care insurance. Total contributions typically amount to 20–22% of gross income.

UAE: Expatriate employees in the UAE do not pay social security contributions. UAE nationals contribute to a separate system, keeping expat employment costs significantly lower.

Key Takeaway: The UAE Advantage

Germany’s taxation structure is detailed and comprehensive, but it often results in higher overall tax liabilities. In contrast, the UAE provides a simplified, low-tax environment, helping entrepreneurs and investors focus on what truly matters: growing their business.

For those seeking tax efficiency, speed of setup, and global access, Dubai remains a top destination for business relocation.

Why Choose the UAE, and Expat Businesses

The United Arab Emirates is not just a tax-friendly nation; it’s a lifestyle and business destination that offers unmatched opportunities.

Here’s why more global professionals, especially from Germany, are choosing the UAE, and how Expat Businesses ensures a smooth relocation experience.

1. Economic Opportunities

• Thriving, diversified economy across tourism, finance, technology, and trade.

• Free zones and low taxes make it ideal for entrepreneurs.

• Access to regional and international markets through Dubai’s strategic global position.

  
  

At Expat Businesses, we help you establish your company in record time — handling every step from licensing to visa setup — with no hidden fees and full transparency.

2. Cultural Diversity

• A vibrant, multicultural society where global communities thrive.

• Countless cultural experiences, festivals, and events make Dubai truly global.

• A welcoming environment for professionals and families alike.

  
  

3. World-Class Infrastructure

• State-of-the-art airports, transport, healthcare, and education.

• Modern residential and business facilities that reflect Dubai’s forward-thinking vision.

• Seamless digital infrastructure supporting smart business operations.

  
  

4. Safety and Security

• Among the safest countries in the world, with exceptionally low crime rates.

• Strong governance and efficient law enforcement ensure peace of mind.

  
  

5. Stunning Landscapes and Lifestyle

• Iconic landmarks like the Burj Khalifa, the Louvre Abu Dhabi, and pristine beaches.

• Endless leisure, dining, and adventure opportunities.

• A perfect blend of luxury, innovation, and comfort.

  
  

6. Strategic Location

• Positioned as the gateway between Europe, Asia, and Africa.

• Easy global connectivity for businesses and frequent travelers alike.

  
  

Why Expat Businesses?

At Expat Businesses, we don’t just relocate you; we empower your move with trust, network, and speed.

From visa and residency setup to business registration, bank accounts, and lifestyle arrangements, our VIP concierge services handle it all with clarity and care.

No hidden costs or delays. Just seamless service — designed for global entrepreneurs who value time and transparency.

Your New Beginning Starts Here

Relocating your life and business to Dubai can be one of the most rewarding decisions you’ll make. With the UAE’s low-tax environment, modern infrastructure, and global connectivity, and Expat Businesses as your trusted partner, success is only a decision away.

Discover a smarter way to move, live, and build your business in Dubai, with Expat Businesses.

👉 Visit www.expatbusinesses.com to get started today.