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UAE Capital Gains Tax 2026: How to Keep Your Rate at 0% (And the Mistake That Triggers 9%)

UAE capital gains tax 2026 - tax documents showing corporate tax on capital gains

14 min read

Does UAE Have a Capital Gains Tax in 2026?

The UAE does not have a standalone capital gains tax. However, gains from selling shares, real estate, business assets, or an entire business are subject to 9% corporate tax under Federal Decree-Law No. 47 of 2022, unless a specific exemption applies. Whether you pay 9% or 0% depends entirely on what you sold, who you are, and whether your transaction meets the conditions for an exemption.

In this guide, Qaspro Global breaks down every scenario: individual investors, UAE companies selling shares, property owners, and business sellers. Each situation has a different tax outcome, and getting it wrong can cost you 9% of a gain that should have been completely tax-free.

What Counts as a Taxable Capital Gain Under UAE Corporate Tax?

Under Article 9 of Federal Decree-Law No. 47 of 2022, taxable income includes all income derived by a taxable person during a tax period, including gains from the disposal of assets. This means any gain your UAE-registered business earns from selling shares, property, equipment, intellectual property, or other assets forms part of its taxable income and is subject to 9% corporate tax, unless an exemption specifically removes it.

The key point that confuses most business owners: the UAE does not carve out capital gains as a separate, lower-taxed category. Gains are taxed at the same 9% rate as operating profits. The only way to achieve 0% on a gain is to meet the conditions of one of the three exemptions described below.

Who Is Exempt from UAE Corporate Tax on Capital Gains?

Three categories of persons pay 0% on capital gains under UAE law, each governed by a different legal provision:

Individual investors (personal investment income): Under Article 2(2)(b) of Cabinet Decision No. 49 of 2023, personal investment income is excluded from corporate tax entirely, regardless of amount. This covers gains from selling shares, bonds, funds, and other investments held personally, without a trade licence.
Individual real estate investors: Under Article 2(2)(c) of Cabinet Decision No. 49 of 2023, real estate investment income, including gains from selling property, is excluded from corporate tax for natural persons acting without a licence.
Companies using the Participation Exemption: Under Article 23 of Federal Decree-Law No. 47 of 2022 and Ministerial Decision No. 116 of 2023, a UAE company’s gain from selling qualifying shares in another company is fully exempt from corporate tax.

Every other capital gain is taxable at 9% unless a specific exemption applies, such as the business restructuring relief under Article 27 of Federal Decree-Law No. 47 of 2022.

UAE Capital Gains Tax for Individuals: The Personal Investment Exemption Explained

Cabinet Decision No. 49 of 2023, issued 8 May 2023, explicitly defines “Personal Investment” as an investment activity a natural person conducts for their personal account that is neither conducted through a licence nor required to be conducted through a licence, and is not considered a commercial business under Federal Decree-Law No. 50 of 2022.

This means: if you are an individual in the UAE and you sell shares in a listed company, sell units in a mutual fund, sell cryptocurrency, or sell bonds from your personal brokerage account, the gain is not subject to UAE corporate tax. There is no registration requirement and no tax return obligation for this income, regardless of the amount.

The same Cabinet Decision defines “Real Estate Investment” as any activity related to the sale, leasing, sub-leasing, or renting of land or real estate property in the UAE that is not conducted through a licence. An individual who sells a flat, villa, or plot of land held personally pays 0% corporate tax on the gain.

The one trigger that removes this exemption: if the individual’s total business turnover exceeds AED 1,000,000 in a calendar year (Article 2(1) of Cabinet Decision No. 49 of 2023), the individual becomes a taxable person for corporate tax purposes. At that point, business income is taxed at 9%, though personal investment and real estate investment income remain excluded even for taxable natural persons.

UAE Capital Gains Tax for Companies: The Participation Exemption

When a UAE company sells shares in another company, the gain is taxable at 9% by default. The only way to exempt it is through the Participation Exemption under Article 23 of Federal Decree-Law No. 47 of 2022, detailed in Ministerial Decision No. 116 of 2023.

To qualify for the participation exemption on a share disposal, four conditions must all be met:

Condition 1: Minimum Ownership Threshold

The selling company must hold at least 5% of the shares in the company being sold, OR the total acquisition cost of the shares must be at least AED 4,000,000 (Article 8 of Ministerial Decision No. 116 of 2023). The AED 4 million threshold allows smaller percentage holdings in large companies to still qualify if the investment value is sufficient.

Condition 2: Minimum Holding Period

The shares must have been held for a continuous period of at least 12 months. If the 12-month period is met through an exchange of shares under Article 27 of the Corporate Tax Law (business restructuring), the continuous ownership requirement is treated as maintained across the exchange (Article 4 of Ministerial Decision No. 116 of 2023).

Condition 3: The Target Company Must Be Subject to Tax

The company whose shares are being sold must be subject to a corporate income tax of at least 9% in its country of residence, or demonstrate an effective rate of at least 9% (Article 6 of Ministerial Decision No. 116 of 2023). For UAE resident companies, this condition is automatically met. For foreign companies, the seller must verify the tax rate in the relevant jurisdiction.

Condition 4: Asset Composition of the Target

The target company’s assets must not consist of more than 50% UAE immovable property (real estate). If more than half of the target’s assets are UAE real estate, the participation exemption does not apply and the gain is taxed at 9%. This rule prevents companies from using share structures to avoid tax on UAE property gains.

Worked Example: Participation Exemption on Share Sale

Company A (UAE mainland) holds 20% of Company B (UAE free zone) with an acquisition cost of AED 2,000,000. After 18 months, Company A sells its entire 20% stake for AED 5,500,000, realising a gain of AED 3,500,000.

Ownership threshold: 20% exceeds 5% minimum. Condition met.
Holding period: 18 months exceeds 12-month minimum. Condition met.
Tax status of Company B: UAE company subject to 9% CT. Condition met.
Asset composition: Company B is a trading company. Less than 50% real estate. Condition met.

Result: The AED 3,500,000 gain is fully exempt from corporate tax under Article 23 of Federal Decree-Law No. 47 of 2022. If even one condition had failed, Company A would owe AED 315,000 in corporate tax (9% of AED 3,500,000).

UAE Corporate Tax on Gains from Selling Property (Companies)

When a UAE company sells real estate it owns directly, the gain is included in taxable income and taxed at 9%. The participation exemption does not apply to direct property sales by companies, only to share disposals.

However, two reliefs reduce the tax burden for property-owning companies:

Depreciation deductions: Under Ministerial Decision No. 173 of 2025, UAE companies can deduct 4% per year of the cost of investment property as a depreciation expense, reducing taxable income over time and lowering the effective gain on disposal.
Business restructuring relief: Under Article 27 of Federal Decree-Law No. 47 of 2022, if a company transfers property as part of a qualifying business restructuring at net book value, no taxable gain arises at the time of transfer. A 2-year clawback applies if the asset is subsequently sold outside the qualifying group.

UAE Corporate Tax on Gains from Selling a Business

Selling an entire business or a significant part of it triggers corporate tax in one of two ways, depending on the structure of the transaction:

Asset sale: The selling company recognises gains on individual assets sold (goodwill, equipment, stock, IP). Each asset is taxed at 9% on the gain above book value. No automatic exemption applies.

Share sale: The selling shareholder disposes of shares in the company being sold. If the participation exemption conditions are met (5% ownership, 12 months, 9% tax, under 50% real estate assets), the gain is 0%.

This is why most major business sales in the UAE are structured as share transactions rather than asset transactions. The tax difference on a AED 10,000,000 gain is AED 900,000 (9% of AED 10M vs 0%). Qaspro Global’s tax consultants regularly advise clients on transaction structuring before they sign a sale agreement, since restructuring after the deal is signed rarely achieves the same result.

Capital Gains Tax Comparison: UAE 2026 Summary Table

Who Is Selling	What Is Being Sold	Tax Rate	Legal Basis
Individual (personal account)	Shares, funds, bonds, crypto	0%	CD 49/2023, Art. 2(2)(b)
Individual (personal account)	Residential/commercial property	0%	CD 49/2023, Art. 2(2)(c)
UAE company	Qualifying shares (5%+ / AED 4M+, 12m, 9% tax)	0%	FDL 47/2022, Art. 23; MD 116/2023
UAE company	Non-qualifying shares (under 5%, under 12m, or low-tax country)	9%	FDL 47/2022, Art. 9
UAE company	Real estate (direct sale)	9%	FDL 47/2022, Art. 9
UAE company	Business assets (equipment, IP, goodwill)	9%	FDL 47/2022, Art. 9
UAE company	Business restructured under Art. 27	0% (deferred)	FDL 47/2022, Art. 27; MD 133/2023
Individual with business turnover above AED 1M	Business assets	9%	CD 49/2023, Art. 2(1)

What Expenses Are Deductible Against a Capital Gain?

For gains taxed at 9%, the taxable gain is the sale price minus the tax book value of the asset. Normal business expenses related to running the business are deductible under Article 28 of Federal Decree-Law No. 47 of 2022.

However, for gains covered by the participation exemption, Article 10 of Ministerial Decision No. 116 of 2023 specifies that acquisition and disposal costs are not deductible in any tax period. These costs include professional fees, due diligence costs, litigation costs, commissions, brokerage fees, stamp duty, appraisal fees, and refinancing costs. Instead, they are capitalised as part of the acquisition cost of the participating interest. This is a common error in CT returns that Qaspro Global’s tax team identifies during return reviews.

How Are Capital Gains Reported on the UAE Corporate Tax Return?

Capital gains on asset disposals are reported through the taxable income computation on EmaraTax. Exempt gains (participation exemption income) are disclosed in the exempt income section of the return and excluded from the taxable income calculation. The corporate tax return must be filed within 9 months of the end of the tax period, and tax is due on the same date.

Businesses using the Small Business Relief election (available to companies with revenue of AED 3,000,000 or less) effectively pay 0% on all income including gains, but still must file a return and elect SBR on EmaraTax for the relevant tax period.

Frequently Asked Questions

Does UAE have capital gains tax in 2026?

The UAE has no standalone capital gains tax. However, gains from selling business assets, shares, or property are subject to 9% corporate tax under Federal Decree-Law No. 47 of 2022, unless an exemption applies. The participation exemption can reduce the rate to 0% for qualifying share disposals by companies.

Do individuals in the UAE pay tax when they sell shares or property?

No. Under Cabinet Decision No. 49 of 2023, personal investment income and real estate investment income are excluded from corporate tax for natural persons, regardless of the amount. This applies to selling shares, funds, crypto, and residential or commercial property held personally without a trade licence.

What is the participation exemption for capital gains in UAE?

The participation exemption under Article 23 of Federal Decree-Law No. 47 of 2022 exempts dividends and capital gains on qualifying share disposals from 9% corporate tax. The four conditions are: ownership of 5% or more (or AED 4 million acquisition cost), at least 12 months of continuous holding, the target company is subject to 9% or more in tax, and the target’s assets are less than 50% UAE real estate.

What is the AED 4 million threshold in the participation exemption?

Under Article 8 of Ministerial Decision No. 116 of 2023, a company that paid AED 4,000,000 or more to acquire shares in another company qualifies for the participation exemption even if its ownership percentage is below 5%. This threshold allows large minority investments in high-value companies to still benefit from the 0% capital gains exemption.

Is there UAE corporate tax on selling property if I own it through a company?

Yes. A UAE company that directly sells real estate recognises a taxable gain at 9% on the difference between the sale price and the tax book value. The participation exemption does not apply to direct property sales. However, under Ministerial Decision No. 173 of 2025, investment properties can be depreciated at 4% per year, reducing the gain on disposal over time.

Does UAE corporate tax apply when I sell my whole business?

It depends on the transaction structure. A share sale can qualify for the participation exemption (0% if conditions are met). An asset sale triggers 9% corporate tax on gains above book value for each asset sold. Most business sales in the UAE are structured as share transactions to utilise the participation exemption.

Is the gain from selling a UAE free zone company exempt from corporate tax?

If the seller is a UAE company holding 5%+ of the free zone company for at least 12 months, and the free zone company is subject to corporate tax (which it is as a registered UAE entity), the gain on sale qualifies for the participation exemption and is taxed at 0% under Article 23 of Federal Decree-Law No. 47 of 2022.

Can I defer capital gains tax in UAE using business restructuring relief?

Yes. Under Article 27 of Federal Decree-Law No. 47 of 2022 and Ministerial Decision No. 133 of 2023, a business can transfer assets or an entire business to a related company at net book value with no taxable gain at the time of transfer. Seven conditions must be met. A 2-year clawback applies if the receiving entity disposes of the transferred assets within 2 years of the restructuring.

Do I need to register for corporate tax just to sell shares or property personally?

No. Under Article 2(3) of Cabinet Decision No. 49 of 2023, a natural person whose activities are limited to wages, personal investment income, or real estate investment income is not required to register for corporate tax, regardless of the value of their transactions.

Are acquisition costs for shares deductible against capital gains tax in UAE?

For gains taxed at 9%, the gain is calculated as sale proceeds minus tax book value, so the acquisition cost is already factored in. For gains covered by the participation exemption (0%), Article 10 of Ministerial Decision No. 116 of 2023 specifically prohibits deducting acquisition and disposal costs such as legal fees, due diligence costs, and brokerage fees. These costs must be capitalised as part of the investment cost instead.

Need Expert Help?

Whether you are planning a share sale, structuring a business acquisition, or reviewing your corporate tax position before filing, Qaspro Global’s team of UAE tax consultants can help you identify the right exemption and avoid a 9% charge on gains that should be tax-free. Contact us today for a free consultation.