Dubai is known for its attractive taxation regime, as the UAE is a country which imposes few taxes on companies and individuals. This regime is the main reason why business owners choose to open companies here and individuals choose to move to and live in Dubai. Taxes in Dubai can be direct or indirect. For a better understanding of the requirements regarding the taxation system in the UAE, we suggest you solicit complete guidance and legal assistance from our lawyers in Dubai. Our team can provide services for you and your company regarding the imposed levies, if there are any, and information about the tax compliance in Dubai.
The main business entities that can be set up in Dubai are the limited liability company, the private and public joint stock company, the branch and representative office. A company incorporated in Dubai is considered a resident company if all of the shares of the company are beneficially owned by United Arab Emirates residents, if the company’s income is derived from activities other than investments businesses in the UAE or if all or part of the value of the company’s property is used in the respective trade or business.
The income of a Dubai company is exempt from taxes, except if the company engages in oil and gas exploration and production or if it is a branch of a foreign bank. These companies are taxed according to the following rates: 20% for foreign bank branches and 55% for oil and gas companies. There are no withholding taxes in the UAE, no capital duty or payroll tax and no stamp duty. Dubai has several free trade zones where incentives apply.
Dubai can be regarded as a tax haven for companies and for individuals as there are no income taxes for individuals in Dubai. Also, individuals living and working in Dubai have no compliance obligations. Foreign citizens living and working in Dubai may be subject to taxation in their home countries for the income earned in Dubai, provided that:
However, due to the UAE’s double taxation agreements, the taxation of income can be avoided.
The Dubai Government applies the following indirect taxes which need to be considered when relocating in the Emirates:
If you want to know more about how to make investments in Dubai or about the taxation system in the UAE, please do not hesitate to contact our attorneys in Dubai.
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