Airbnb Taxes in Dubai – Simple Guide for Hosts

If you’ve started listing your apartment on Airbnb, the first thing on your mind is likely bookings, not paperwork. But Dubai’s tax rules are real, and ignoring them can cost you big. This guide breaks down what you need to pay, when to pay, and how to keep everything legit without drowning in red tape.

Why Dubai’s Tax Rules Matter for Airbnb

Dubai may feel like a tax‑free playground for businesses, but short‑term rentals are an exception. The government treats earnings from platforms like Airbnb as taxable income, and there are specific fees tied to tourism and hospitality. Skipping these obligations can lead to fines, blocked accounts, or even legal trouble.

Key Taxes You’ll Face

There are three main charges you’ll encounter:

• Tourism Dirham Fee – a per‑night charge that goes straight to the Dubai Department of Tourism. It’s usually around AED 7 per night and the platform often passes it on to guests, but you still need to confirm it’s being collected.
• Value‑Added Tax (VAT) – Dubai applies a 5% VAT on most services, including short‑term rentals. If your annual turnover exceeds AED 375,000, you must register for VAT and charge it on every booking.
• Income Tax / Corporation Tax – While the UAE has no personal income tax, rental income is considered commercial revenue. If you operate as a business entity, you’ll file corporate tax at the applicable rate.

Missing any of these can trigger penalties, so it’s worth setting up a reminder calendar.

Registering for VAT is straightforward: apply through the Federal Tax Authority (FTA) portal, upload your trade license, and wait for approval. Once you have a VAT registration number, add the 5% to each booking invoice and keep proper records for the quarterly filing.

For the Tourism Dirham, most hosts let Airbnb handle the collection, but you should double‑check your listing’s pricing breakdown. If the fee isn’t showing, you may need to add it manually to avoid under‑payment.

Beyond taxes, you’ll need a valid trade license to rent out a property short‑term. The Dubai Department of Economic Development issues a “home‑stay” license that shows you’re authorized to host guests. Without it, the platform can suspend your account.

Keeping all receipts, invoices, and transaction logs in one place makes filing painless. Use a simple spreadsheet or a cloud‑based accounting app. Record the date, booking ID, amount received, VAT charged, and Tourism Dirham collected. When it’s time to file, you’ll have a clear audit trail.

Many new hosts forget to account for the occasional “service fee” that Airbnb charges. It’s not a tax, but it reduces your net profit. Factor it in when you set your nightly rate so you don’t end up with less cash than expected.

Common mistakes you’ll want to avoid:

• Assuming the platform handles all taxes for you – you’re still responsible for compliance.
• Not registering for VAT because you think your earnings are low – the threshold is lower than many realize.
• Mixing personal and business expenses without clear separation – it complicates tax filings.

If you’re unsure about any step, a quick chat with a local accountant can save you headaches later. Most professionals charge a modest fee for a one‑time setup and can handle quarterly VAT returns for you.

Bottom line: Treat Airbnb like any other business. Know the Tourism Dirham, register for VAT if needed, and keep solid records. Stay on top of deadlines, and you’ll enjoy your extra income without nasty surprises.