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Tax Comparison: Germany Vs UAE

  • priyankamurali555
  • Oct 22
  • 3 min read

German investors and entrepreneurs are increasingly assessing the tax benefits in the UAE in contrast to Germany's income tax system. Expanding a business internationally relies significantly on comprehending the destination country's tax environment. In 2025, the UAE continues to offer a low-tax jurisdiction, whereas Germany upholds a structured taxation system with progressive corporate and personal taxes.


German VS UAE

Germany and the United Arab Emirates (UAE) have significantly different tax structures. Understanding these differences is crucial for individuals and businesses considering relocation or investment.


Income Tax

  • Germany: Germany has a progressive income tax system with rates ranging from 0% to 45%. The highest rate applies to income exceeding approximately €274,613 for singles.

  • UAE: The UAE has no personal income tax, making it an attractive destination for expatriates and high-income earners.


Corporate Tax

  • Germany: Corporate tax rates in Germany are approximately 15%, plus a solidarity surcharge of 5.5% on the corporate tax, leading to an effective tax rate of around 15.825%. Additionally, local trade taxes can increase the overall corporate tax burden.

  • UAE: The UAE has introduced a corporate tax of 9% on profits exceeding AED 375,000 (approximately €90,000), which is relatively low compared to global standards.


Value Added Tax (VAT)

  • Germany: The standard VAT rate in Germany is 19%, with a reduced rate of 7% for certain goods and services.

  • UAE: The UAE has a VAT rate of 5%, which is one of the lowest in the region.


Property Tax

  • Germany: Property owners in Germany are subject to property tax (Grundsteuer), which varies by municipality and is assessed based on the value of the property.

  • UAE: The UAE does not levy property tax; however, there may be other fees related to property ownership, such as registration fees and service charges.


Social Security Contributions

  • Germany: Employees and employers contribute to social security, which includes health insurance, pension insurance, unemployment insurance, and long-term care insurance. Contributions can total around 20-22% of gross income.

  • UAE: There are no social security contributions for expatriate employees; however, UAE nationals contribute to a social security system.


Germany has a comprehensive tax system with various taxes on income, corporate profits, and consumption, while the UAE offers a more favourable tax environment with no personal income tax and low corporate tax rates. This makes the UAE an attractive option for individuals and businesses seeking to minimise their tax liabilities.


Why Choose UAE

The United Arab Emirates (UAE) is a remarkable destination for various reasons. Here are some key factors that make it an attractive choice:

1. Economic Opportunities

  • Diverse economy with thriving sectors such as tourism, finance, and technology.

  • A business-friendly environment with low taxes and free zones.

  • Access to a growing market in the Middle East and beyond.

2. Cultural Diversity

  • Home to a multicultural population with a rich tapestry of traditions and customs.

  • Numerous cultural events and festivals throughout the year.

  • Opportunities to experience a blend of modernity and tradition.

3. World-Class Infrastructure

  • State-of-the-art transportation systems, including airports and public transit.

  • Modern healthcare and educational facilities.

  • High-quality residential and commercial developments.

4. Safety and Security

  • Low crime rates and a strong sense of security for residents and visitors.

  • Robust law enforcement and emergency services.

5. Stunning Landscapes and Attractions

  • Beautiful beaches, deserts, and mountains offering various recreational activities.

  • Iconic landmarks such as the Burj Khalifa and the Louvre Abu Dhabi.

  • Vibrant nightlife and entertainment options.

6. Strategic Location

  • Geographically positioned as a gateway between Europe, Asia, and Africa.

  • Convenient access to major global markets.


The UAE offers a unique blend of economic prospects, cultural richness, and modern living, making it an ideal choice for individuals and businesses alike.


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