Do Americans living abroad pay US tax?

Yes. US citizens and resident aliens (including green card holders) are taxed on their worldwide income, wherever they live, and must file if their income is above the filing threshold. Moving to Dubai doesn't change that. [1][4]

Do Americans living in Dubai get taxed twice?

Usually not on salary, because the UAE has no personal income tax. The flip side is that the foreign tax credit, which normally prevents double tax, has nothing to credit against UAE salary. The main relief for earned income is the exclusion below. [5][6]

How much foreign income is tax-free in the US?

The foreign earned income exclusion for 2026 is $132,900 per person (it was $130,000 for 2025). To claim it, your tax home must be abroad and you must meet one of two tests: [2][7][19]

  • the physical presence test: 330 full days in a foreign country or countries in any period of 12 consecutive months, or
  • the bona fide residence test: living in a foreign country for an uninterrupted period that includes a full tax year

The exclusion covers earned income only, meaning pay for your own work, including self-employment income. Investment income, such as interest and dividends, isn't earned income and must still be reported in the US. A separate foreign housing exclusion or deduction can cover some housing costs. [1][7]

Can the IRS see my foreign bank account?

Yes. A FATCA agreement between the UAE and the US has been in force since 19 February 2016. Under it, the UAE obtains information on accounts that US persons hold at UAE financial institutions and passes it to the US each year. You must report them yourself too: [8][9]

  • FBAR (FinCEN Form 114): required if your foreign accounts total more than $10,000 at any time in the year.
  • Form 8938: required for taxpayers living abroad with foreign financial assets above $200,000 at year-end or $300,000 at any time (single), or $400,000 and $600,000 (married filing jointly).

Owning a UAE company as a US citizen

  • Form 5471 is required for US citizens and residents who are officers, directors or shareholders in certain foreign companies, which can include a UAE company. [10]
  • Controlled foreign company income can be included in a US shareholder's income each year. From 1 January 2026, the rules once known as GILTI are called net CFC tested income (NCTI). Take US advice before setting up. [10][11][20]
  • Passive foreign investment companies (PFICs). US shareholders of a PFIC may need to file Form 8621, including an annual report. [12]

State tax: leaving your state

Some states keep taxing you until you prove you've set up a permanent home elsewhere. California and New York both look at domicile, not just where you are living. Keeping a home, family ties or business links there can keep you taxable as a resident. [13][14]

Estate and gift tax

The US rules for estate and gift tax returns apply to citizens abroad in the same way as at home. For 2026, the basic exclusion is $15 million per person, and the annual gift exclusion is $19,000 per recipient. [2][4][15]

Social Security

There is no US–UAE totalization agreement. The US has 31 such agreements, and the UAE isn't among them. [16]

What about giving up US citizenship?

Some Americans abroad consider renouncing. It carries its own tax:

  • Who is caught. The expatriation tax rules apply to "covered expatriates". For 2026, that includes average annual US income tax over the previous 5 years above $211,000, or net worth of $2 million or more, or failing to certify on Form 8854 that you have met all your US federal tax obligations. [2][17]
  • The exit gain. Covered expatriates are taxed as if they sold their assets, with the first $910,000 of gain excluded for 2026. [2]
  • The fee. The State Department fee for processing a Certificate of Loss of Nationality fell from $2,350 to $450 on 13 April 2026. [18]
  • The form. Form 8854 is required. [17]

Renouncing is permanent, so take specialist US advice first.

How Marlborough Gulf helps

What we do:

  • We set up the UAE side of your move: residency, the company you'll hold, its accounts and UAE tax.
  • We coordinate the timing and structure with your US tax adviser, so the UAE company and the US forms fit together.

What others do: A US tax adviser prepares your US return, FBAR and company forms. You appoint them directly.

Book a consultation

Questions people ask

Do I have to pay US taxes while living in Dubai?

Yes, US citizens file and are taxed on worldwide income wherever they live. The foreign earned income exclusion can remove up to $132,900 of earned income for 2026. [1][2]

Is there a US–UAE tax treaty?

No comprehensive income tax treaty exists. There is a FATCA agreement for reporting accounts. [3][8]

Do I need to file an FBAR if I live in Dubai?

Yes, if your foreign accounts total more than $10,000 at any point in the year. [9]

Can I move to Dubai as a US citizen?

Yes. US citizens can live in the UAE on a residence visa, such as an employment, Green or Golden Visa. ICP's Golden Visa criteria make no reference to nationality. [21] UAE residence visa →

This guide is general information, not US tax advice. US tax rules for Americans abroad are detailed and change every year. Take advice from a qualified US tax professional.

Related guides

Sources

  1. IRS, Publication 54: Tax Guide for U.S. Citizens and Resident Aliens Abroad, revised Dec 2025. https://www.irs.gov/publications/p54
  2. IRS, Rev. Proc. 2025-32 (2026 inflation adjustments), Oct 2025. https://www.irs.gov/pub/irs-drop/rp-25-32.pdf
  3. IRS, United States income tax treaties – A to Z, updated 3 Jan 2026. https://www.irs.gov/businesses/international-businesses/united-states-income-tax-treaties-a-to-z
  4. IRS, U.S. citizens and resident aliens abroad, updated 20 Oct 2026. https://www.irs.gov/individuals/international-taxpayers/us-citizens-and-resident-aliens-abroad
  5. IRS, Foreign tax credit, updated 9 Jul 2026. https://www.irs.gov/individuals/international-taxpayers/foreign-tax-credit
  6. PwC Worldwide Tax Summaries, UAE: individual, taxes on personal income, reviewed 9 Sep 2026. https://taxsummaries.pwc.com/united-arab-emirates/individual/taxes-on-personal-income
  7. IRS, Foreign earned income exclusion, updated 12 Jun 2026. https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion
  8. US Treasury, Foreign Account Tax Compliance Act (list of agreements: UAE Model 1, in force 19 Feb 2016), and the UAE agreement, Article 2. https://home.treasury.gov/policy-issues/tax-policy/foreign-account-tax-compliance-act https://home.treasury.gov/system/files/131/FATCA-Agreement-UAE-6-17-2015.pdf
  9. IRS, Comparison of Form 8938 and FBAR requirements, updated 19 Sep 2026. https://www.irs.gov/businesses/comparison-of-form-8938-and-fbar-requirements
  10. IRS, About Form 5471, updated 17 Sep 2026. https://www.irs.gov/forms-pubs/about-form-5471
  11. RSM US, "International tax reform under the One Big Beautiful Bill Act", 7 Jul 2025. https://rsmus.com/insights/services/business-tax/international-tax-reform-under-the-one-big-beautiful-bill-act.html
  12. IRS, About Form 8621, updated 30 Mar 2026. https://www.irs.gov/forms-pubs/about-form-8621
  13. California Franchise Tax Board, Publication 1031: Guidelines for Determining Resident Status (2025). https://www.ftb.ca.gov/forms/2025/2025-1031-publication.pdf
  14. New York State Department of Taxation and Finance, Nonresident FAQs. https://www.tax.ny.gov/pit/file/nonresident-faqs.htm
  15. IRS, What's new: Estate and gift tax, updated 23 Jul 2026. https://www.irs.gov/businesses/small-businesses-self-employed/whats-new-estate-and-gift-tax
  16. Social Security Administration, POMS GN 01701.005, Totalization Agreements, 17 Sep 2026. https://secure.ssa.gov/poms.nsf/lnx/0201701005
  17. IRS, Expatriation tax, updated 4 Oct 2026. https://www.irs.gov/individuals/international-taxpayers/expatriation-tax
  18. Department of State, final rule, Schedule of Fees for Consular Services: Fee for Administrative Processing of Request for Certificate of Loss of Nationality, Federal Register Vol. 91, No. 49, 13 Mar 2026 (FR Doc. 2026-04931), effective 13 Apr 2026. https://www.govinfo.gov/content/pkg/FR-2026-03-13/pdf/2026-04931.pdf
  19. IRS, Figuring the foreign earned income exclusion, updated 14 Mar 2026. https://www.irs.gov/individuals/international-taxpayers/figuring-the-foreign-earned-income-exclusion
  20. IRS, Instructions for Form 1120-IC-DISC, revised Dec 2025 ("Effective January 1, 2026, GILTI and FDII have been renamed"). https://www.irs.gov/instructions/i1120icd
  21. ICP, What is the UAE Golden Residency?, updated 10 Sep 2026. https://icp.gov.ae/en/uae-golden-residency/