Technical article
Gulf States That Tax Individuals Little: What It Means for a US Citizen
A friend told them the Gulf has no income tax.
Picture a couple named Mark and Linda, both 66. They live on Social Security and an investment account. A friend told them the Gulf has no income tax. They wonder if that means they would owe nothing anywhere.
The pages I could read are careful. They say less than the friend did.
What each government's page says
| Country | What the official page says |
|---|---|
| UAE | Corporate Tax covers "Natural persons (individuals) who conduct a Business or Business Activity in the UAE", with scope to come from a Cabinet Decision "in due course". The page does not discuss salaries or pensions. |
| Qatar | Income tax is "an annual levy on the aggregate income of taxpayers stemming from sources within Qatar". Standard rate: "10% on taxable income, applicable across all activities". The page does not say whether individuals pay. |
| Saudi Arabia | The 20% rate applies to, among others, "non-Saudi natural persons conducting business in Saudi Arabia". A resident person trading listed Saudi shares is excluded from taxable activity. |
| Oman | Not stated on an official page. |
What this means. In all three, the pages describe tax on business activity or on Saudi, Qatari or UAE sources. None of them, on the pages I read, says a retiree living on a pension would owe tax. None says the retiree would not. They are silent. I do not fill that gap.
The US side
The IRS says US citizens and residents abroad are taxed on worldwide income. On filing: "you generally are required to file income tax returns, estate tax returns, and gift tax returns". The foreign earned income exclusion is for earnings from work. The IRS page says "pension or annuity payments, including social security benefits" are not foreign earned income. The page lists US$120,000 for 2023 and no later figure, so none is given.
So for Mark and Linda, living in a country with little local tax does not end the US return. Whether anything is owed is a question for their own numbers.
What is left open
- Oman's rules, and any plan for a personal tax there.
- Whether the UAE, Qatar or Saudi Arabia tax a foreigner's pension or investment income. The pages are silent.
- Any tax treaty with the United States.
- Bahrain and Kuwait are not covered here.
You could…
- Ask each tax authority in writing how it treats a foreign pension.
- List your income by type: pension, Social Security, investments, work.
- Ask an accountant or lawyer who works with Americans abroad to confirm.
If the local tax were zero, what would still be left on your US return?
Figures are estimates for planning, based on public data. Date read: 10 October 2026.
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