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Paying taxes in Dubai

Updated on Saturday 11th February 2017

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Dubai is an attractive destination for foreign investors and citizens looking for a place to work as it is considered a tax-free city. The United Arab Emirates Government does not impose income taxes to companies and individuals living in the country. However, foreign citizens registered for taxation purposes in other countries and making profits in Dubai may be required to pay certain taxes. Dubai has also concluded different double taxation agreements with other countries in order to reduce the taxes applied to foreign citizens when repatriating profits to their home countries and thus becoming even more attractive to foreign enterprisers.

The corporate tax in Dubai

Apart from the UAE taxation system, each Emirate has its own corporate tax system in place. Dubai also has its own corporate tax legislation which imposes certain taxes to companies operating within the Emirate. However, in reality taxes only apply to several types of companies only:

  • -          Dubai companies operating in the gas and oil industry,
  • -          branches of foreign banks operating in Dubai.

While Dubai gas and oil companies are subject to a 55% tax rate applied to the company’s profits, branches of foreign banks are required to pay a 20% tax rate on the taxable income. However, there are no withholding taxes for remitting dividends, royalties or interests abroad.

For complete information about the taxation of businesses you can obtain more information from our company registration agents in Dubai.

You can also find out from this video what the main taxes in Dubai are:

Other taxes in Dubai

Even if there is no value added tax levied in Dubai, there are other indirect taxes applied to individuals. The following taxes are levied by the Dubai tax authorities:

  • -          a 10% municipal tax applied to hotels and other entertainment facilities,
  • -          a 10% municipal tax on the rental of commercial spaces,
  • -          a 5% municipal tax on the rental of residential property in Dubai.

The Dubai Electricity and Water Authority also apply certain taxes on utility bills and there is also a road toll. Foreign citizens must also be aware that bringing or purchasing alcohol within the Emirate is subject to different tax rates.

For details about all the taxes applied in the Emirate, please contact our Dubai company formation agents.

 

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