Compare taxes and see how much you save moving from New York to UAE
New York state income tax reaches $5,600 at $100,000 income, with NYC residents paying an additional 3.876% NYC income tax on top — bringing the combined state+city burden to approximately $9,476 at $100,000. The UAE charges zero personal income tax on employment or self-employment income. For New York finance professionals and high earners considering a move to Dubai or Abu Dhabi, the tax savings are substantial — not just in state/city tax, but potentially in overall burden since Americans in the UAE can use the Foreign Earned Income Exclusion to shield up to $126,500 from US federal tax as well. The UAE's Dubai International Financial Centre (DIFC) is a major draw for Wall Street professionals.
High State Income Tax
9 progressive brackets from 4% to 10.9%; NYC residents pay an additional income tax up to 3.876% on top of state rates.
Tax-Free Income
No personal income tax on employment or self-employment income for UAE residents — one of the world's few zero income tax jurisdictions.
At $100,000 income:
New York state income tax is $5,600 at $100,000. UAE charges $0. New York City residents pay an additional 3.876% NYC income tax (not in these figures). Americans moving to UAE still owe US federal tax. Finance workers and traders: UAE's DIFC (Dubai International Financial Centre) is a major attraction.
| Income | NY Tax | AE Tax | Savings | 10-Year |
|---|---|---|---|---|
| $50,000 | $2,050 | $0 | $2,050 UAE saves more | $20,500 |
| $75,000 | $3,983 | $0 | $3,983 UAE saves more | $39,830 |
| $100,000 | $5,600 | $0 | $5,600 UAE saves more | $56,000 |
| $150,000 | $10,177 | $0 | $10,177 UAE saves more | $101,770 |
| $250,000 | $19,874 | $0 | $19,874 UAE saves more | $198,740 |
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Transfer Money Internationally →Yes — American citizens owe US federal income tax on their worldwide income regardless of where they live, including zero-tax jurisdictions like the UAE. Moving to Dubai does not eliminate the US federal filing obligation. However, Americans who establish genuine UAE residency and meet the IRS Physical Presence test (330 days outside the US in a 12-month period) or Bona Fide Residence test can claim the Foreign Earned Income Exclusion (FEIE) up to $126,500 in 2025, which can substantially reduce or eliminate the federal tax on earned income. The UAE does not have a tax treaty with the US, so the Foreign Tax Credit is not applicable (no UAE taxes to credit). Proper US expat tax planning is essential for Americans in the UAE.
New York City levies its own income tax on NYC residents at rates from 3.078% to 3.876%. This is separate from — and in addition to — New York State income tax. At $100,000 income, NYC tax adds approximately $3,876 to the already $5,600 state tax, for a combined state+city burden of roughly $9,476. Once you establish genuine domicile outside New York City (and outside New York State), you are no longer subject to NYC tax. However, New York State and City are notoriously aggressive about auditing high-income individuals who claim to have moved. You must cut all significant ties to New York to successfully terminate NYC/NY tax residency — this includes selling or leasing out your apartment, changing domicile declarations, and limiting time spent in NY.
The Dubai International Financial Centre (DIFC) is a special economic zone within Dubai that operates under its own legal and regulatory framework based on English common law, separate from UAE federal law. DIFC is home to more than 5,000 registered companies including major global banks, asset managers, hedge funds, law firms, and professional services firms. It has its own courts (DIFC Courts) and regulatory authority (DFSA), making it familiar territory for professionals from New York or London. Finance professionals are attracted by zero income tax, competitive compensation packages, proximity to growing GCC and emerging market investment opportunities, and a lifestyle that combines luxury amenities with relative safety and modern infrastructure.
New York State uses an 'domicile' test and a 'statutory resident' test to determine tax residency. Your domicile is your permanent home — your fixed place of abode that you intend to return to. Changing domicile to the UAE means establishing the UAE as your primary home with genuine intent to remain there. Additionally, even if you change domicile, you are a statutory New York resident if you maintain a permanent place of abode in NY and spend more than 183 days in NY during a year. To safely exit New York tax residency: establish clear UAE domicile, spend fewer than 183 days in New York, eliminate your permanent place of abode in NY (sell or lease it to an unrelated party), and maintain contemporaneous records of your non-NY days.
Yes — Americans residing in the UAE can claim the FEIE under IRS Form 2555 if they meet the Bona Fide Residence test (genuine UAE resident for an uninterrupted tax year) or the Physical Presence test (330 full days outside the US in any consecutive 12-month period). The 2025 FEIE exclusion amount is $126,500, indexed for inflation. Since the UAE has no income tax, there is no Foreign Tax Credit available — FEIE is the primary mechanism for US expats in the UAE to reduce their federal tax liability on earned income. Amounts above the FEIE limit are taxed at US federal rates. For investment income (dividends, interest, capital gains), FEIE does not apply and US federal tax rates are owed.
No — as of 2026, the United States and the United Arab Emirates do not have a comprehensive income tax treaty. This is uncommon for a major financial center but stems from the UAE's zero-income-tax status, which traditionally provides no basis for a mutual treaty. The absence of a treaty means US citizens in the UAE cannot use foreign tax credits for UAE taxes (because none exist), and must rely entirely on the Foreign Earned Income Exclusion and other US domestic provisions to manage their US tax liability. The FEIE up to $126,500 is the main tool. This also means that US-UAE cross-border investment and business transactions do not benefit from reduced withholding rates that treaty countries enjoy.
Dubai's cost of living for Western expatriates has risen significantly in recent years. High-end apartments in prime areas like Downtown Dubai, Dubai Marina, or DIFC are comparable to Manhattan in rental costs — $3,000 to $6,000+ per month for a one-bedroom. International school fees are substantial for families with children, often $20,000-$40,000 per year. However, income tax savings in the UAE are real: a New Yorker earning $250,000 saves approximately $19,874 in NY state tax alone, plus up to $126,500 can be excluded from US federal tax through FEIE — yielding potentially $30,000-$50,000+ in total annual tax savings at higher incomes. Groceries and dining in Dubai range from affordable to expensive depending on lifestyle, and no alcohol tax exists at point of sale in licensed venues.