Moving to Dubai: What Germans Need to Know About Tax When Leaving

No income tax on salaries, sunshine all year round and a hub for half the world: anyone thinking about moving to Dubai usually has the advantages in mind. For tax purposes, however, the move is not decided in Dubai but in Germany, and on the basis of questions that have little to do with your new life. What happens to your home? Do you hold shares in a GmbH? Which income will continue to flow from Germany? Because there has been no double tax treaty between Germany and the United Arab Emirates since 2022, leaving for the Emirates forgives fewer mistakes than a move to most other countries. The following sections explain what Germans need to know about tax when leaving.

Your Home in Germany Is Decisive

Anyone who has a residence or their habitual abode in Germany is subject to unlimited income tax liability (§ 1 Abs. 1 EStG, the German Income Tax Act). A person has a residence if they occupy a dwelling in circumstances suggesting that they will keep and use it (§ 8 AO, the German Fiscal Code). The number of days is irrelevant. As early as 1997, the Federal Fiscal Court (BFH) ruled that a residence does not require a minimum period of stay and that regular use for a few weeks a year can be sufficient; the centre of vital interests does not have to be in Germany for this (BFH, judgment of 19 March 1997, I R 69/96).

The administrative guidance on the Fiscal Code (Anwendungserlass zur Abgabenordnung) is even clearer: if you establish a residence abroad and keep your home in Germany, you continue to have a residence here as well. Letting it out for a short period of up to six months generally changes nothing if you intend to use the home again on your return. If, on the other hand, it is let on a long-term basis and merely managed as an asset, the residence ends when you move away. This makes your home in Germany more decisive than any visa.

Why the Missing Treaty Matters So Much

The double tax treaty between Germany and the Emirates expired on 31 December 2021. Treaties usually contain a rule for people with two residences that determines in which state they are treated as resident. Why is this so important? Without a treaty, that rule is missing, and this is why the missing treaty matters so much for emigrants: if you keep a residence in Germany, you are taxed here on your entire worldwide income, including what you earn in Dubai. Foreign tax is only credited if it has actually been assessed and paid (§ 34c EStG). As the Emirates do not levy income tax on individuals, there is nothing to credit. According to a specialist report, both states declared their intention in September 2026 to negotiate a new treaty; there has been no official confirmation from the Federal Ministry of Finance so far.

Deregistering in Germany, Proof of Residence in the Emirates

If you move out of your home and do not take up a new one in Germany, you must deregister with the registration office within two weeks of moving out (§ 17 Abs. 2 BMG, the Federal Registration Act). Deregistering alone does not end your tax liability, but it is an important indication.

In the Emirates, conversely, you need proof that you are tax resident there, for example for banks or German authorities. On application, the tax authority issues a Tax Residency Certificate for this purpose via the EmaraTax portal. Under Cabinet Resolution No. 85 of 2022, you are resident if you spend at least 183 days in the Emirates within twelve consecutive months, if your usual residence and the centre of your financial and personal interests are there, or if you spend at least 90 days there and also hold a valid residence permit (or are a national of the Emirates or another GCC state) and have either a permanent place of residence or employment or a business in the Emirates. Bear in mind, too, that a residence visa generally lapses if you stay outside the Emirates for more than 180 consecutive days; different rules apply to certain visa categories such as the Golden Visa.

Extended Limited Tax Liability: Ten Years After You Leave

Even after a clean departure, Germany may continue to tax you. Extended limited tax liability under § 2 AStG (the German Foreign Tax Act) applies to German nationals who were subject to unlimited tax liability for at least five of the last ten years, move to a low-tax country and retain substantial economic interests in Germany. Taxation counts as low if the income tax in the new country on an income of €77,000 is more than one third lower than the German tax; with no income tax on individuals, this is the case in the Emirates.

Substantial economic interests exist, for example, if you hold at least 1% of a German corporation, remain the owner of a commercial business in Germany, your German income makes up more than 30% of your total income or exceeds €62,000, or your assets in Germany amount to more than 30% of your total assets or exceed €154,000. This liability extends until the end of the tenth year after you leave, provided the income concerned exceeds €16,500 a year.

Exit Tax on GmbH Shares

If you hold shares in a GmbH or other shares in a corporation, moving away can trigger tax without your having sold anything. Under § 6 AStG, this exit tax applies to a notional capital gain if you held at least 1% at any time within the last five years (§ 17 Abs. 1 EStG) and were subject to unlimited tax liability for a total of at least seven of the last twelve years. On application, the tax can be paid in seven equal annual instalments, but as a rule only against security. If you return within seven years and the shares have been neither sold nor transferred in the meantime, the tax claim can lapse again. On application, the tax office can extend this period by a maximum of five years if the intention to return persists.

Income from Germany Remains Taxable

Even without a residence, income from German sources remains taxable in Germany (§ 1 Abs. 4 EStG). This includes in particular rental income from a property in Germany (§ 49 Abs. 1 Nr. 6 EStG) and profits from a commercial business for which a permanent establishment is maintained here (§ 49 Abs. 1 Nr. 2 Buchstabe a EStG). So if you let your home rather than sell it, you continue to declare the rent in Germany.

Working and Doing Business in the Emirates

As for working in Dubai, the starting point is this: if you are employed there, you pay no income tax on your salary, because the Emirates currently have no such tax on individuals. Corporate tax only affects individuals doing business whose turnover exceeds AED 1 million (approx. €243,000) a year; salaries, private investment income and income from real estate investment are disregarded, whatever their amount (Cabinet Decision No. 49 of 2023). If you plan your own company in Dubai, you will find the rules on licences, free zones and corporate tax on our country page for Dubai.

Checklist Before the Move

The key points before moving to Dubai in a checklist:

• Give up your home in Germany or let it on a long-term basis, rather than simply leaving it empty.
• Deregister within two weeks of moving out and keep the confirmation.
• Check holdings of 1% or more: is exit tax under § 6 AStG a risk?
• Identify your substantial economic interests in Germany and have the consequences under § 2 AStG assessed.
• Continue to declare German income such as rent in Germany.
• Meet the conditions for tax residence in the Emirates and apply for the Tax Residency Certificate.
• Keep a record of your travel days and keep stays outside the Emirates below 180 consecutive days.

Some different rules apply to Austrians, including a valid treaty with the Emirates; they are summarised in the article “Leaving Austria: What Happens for Tax When You Move Abroad”. If you hold a company in Germany before moving to Dubai, you should coordinate the steps with your tax adviser at an early stage.

Frequently Asked Questions About Moving to Dubai

Questions we are frequently asked before a move to the Emirates:

Conversions from dirham to euro are rounded. This article is for general information only and does not replace tax or legal advice. Last reviewed: October 2026.