CORPORATE TAX REGIME IN DUBAI (UAE) _ AN OVERVIEW
Dubai, a major business center in the Middle East has been treated as a tax haven for the Investors / Businessmen. The Taxation system is very satisfactory for the Businessmen and Investors. The corporate tax is set at a maximum rate in the oil and bank sectors in the Emirates.
Taxation aspects for Companies in Dubai
- Corporate Tax
- Corporate taxation in Dubai is limited only to banks and oil companies.
- Oil companies in Dubai are subject to a maximum amount of 55% corporate income tax on the UAE-sourced income.
- Branches of foreign banks in Dubai, subject to 20% tax rate on their Dubai source income.
- calculation method for the taxable income:
|For Banks||For Oil Companies|
|according to their audited financial statements||according to their concession agreements|
- Free trade zones (FTZs) have their own rules and regulations and there is no corporate tax.
- VAT (VALUE ADDED TAX) In DUBAI
In the year 2018, the VAT was introduced in the UAE to provide a new source of income. VAT is a tax on the consumption or use of goods and services levied at each point of sale.
|Mandatory Registration||Optional Registration|
|· if its taxable supplies and imports exceed AED 375,000 per annum.
· expected turnover to be more than AED 375,000 in the next 30 days.
|· turnover or expenses (which were subject to VAT) were more than AED 187,500 in the last 12 months or
· expect that either your turnover or expenses (which were subject to VAT) to be more than AED 187,500 in the next 30 days.
Kindly note that:
If you fail to register for VAT on time, a late registration administrative penalty of 20,000 AED will apply.
- UAE Authorities implemented the VAT rate of 5% on jewelry, tobacco, luxury cars, and alcohol industry etc. (low rate as compared to other countries worldwide) for particular goods and services.
- VAT charged at 0% also on few services:
- investments in precious materials;
- the supply or residential properties;
- education services;
- healthcare services.
- Excise tax in Dubai
UAE have implemented an excise tax, generally ranging from 50% to 100%, non-essential goods which includes tobacco products and carbonated drinks / energy drinks, luxury cars etc.
- dividend tax in Dubai
Companies established in UAE can get benefit from the double taxation treaties signed by UAE and there is no tax on dividends / no withholding tax imposed for foreign or local investments. dividend payments are not tax-deductible from the paying company.
- Indirect taxes REGIME in Dubai
|hotels and entertainment activities||10% municipal tax|
|import of alcoholic beverages;||50% tax|
|purchase of alcohol||30% tax|
- Individual Taxation Aspects:
UAE has been treated as a tax haven country for businessmen and investors. And No Income Tax Provisions / Compliance Obligations are applicable to individuals in UAE (DUBAI).
CS Lalit Rajput !! +91 8802581290 !! firstname.lastname@example.org
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