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Taxes in Dubai, the UAE

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Most countries of the world use taxation systems as the main source of the budget replenishment. Governments use taxes during the organization of elections and for many other purposes. However, there are countries in the world where taxes are practically or completely absent. Taxes are not imposed on the income of citizens and companies, as well as on import and export. The UAE is just like that – taxes are not imposed on residents and non-residents of the country.

The UAE has a number of undeniable advantages in terms of doing business. First, there is a very high level of GDP. Taxes are levied only on companies the activities of which are related to the oil or gas industry. Dubai is an extremely convenient place for doing business. This emirate will allow you to implement any, even the most brave, business project. There are a lot of office premises in Dubai. Almost all of the largest international companies are represented in Dubai. It is not only the excellent resort for all fans of traveling around the world, but also the very attractive investment direction.

What is the main advantage of doing business in Dubai? Unquestionable, this is the convenient system of taxation. Taxes are absent in almost all areas. In addition, the UAE have signed agreements on the avoidance of double taxation with many countries around the world. This not only facilitate business, but also makes it to be more profitable.

Unlike many other progressive and developed countries in the world, the UAE has zero tax rate in the majority of income typs. What taxes are absent in the United Arab Emirates?

  • income tax;
  • corporate tax;
  • tax on interest and dividends;
  • tax on import and export.

Any working person must pay tax on earnings in other countries of the world. In the UAE, there is no such tax, both for individuals and legal entities. There are no other types of taxes such as, for example, tax on inheritance, etc.

Corporate tax is levied only on those companies that work in the oil and gas industry, as well as on banking institutions. Please pay attention to this important information. If you are engaged in this kind of business, corporate tax will be imposed on your company. This applies only to those companies that work directly in the local market. That is, this rule does not apply to international companies.

When it comes to taxes in the UAE, we cannot fail to mention another undoubted advantage of the country – these are free economic zones. What are the main features of free economic zones in the UAE? This is the absence of taxes – on income and corporate, as well as customs fees. Companies are also able to repatriate investments. Many companies are interested in having their representative offices in Dubai. Most international companies have already established their representative offices in the UAE.

According to the latest research data, the economy of the UAE is one of the most effective and stable in the world. In addition, it is extremely diversified. What criteria are used to assess the effectiveness of the economy? First of all, this is the tax rate for individuals and legal entities. Second, this is the total sum of taxes and its ratio to GDP.

According to the latest reports of experts, Dubai holds the leading position on these criteria in the territory of the UAE. This is facilitated by excellent infrastructure of the emirate and its convenient location. It is not surprising that in the last decade, Dubai has become the true financial hub of the Middle East and the important business center of the world.

Let's take a closer look at the existing taxes in the UAE. Which taxes are not imposed? Here is their full list:

  • income tax;
  • value added tax;
  • capital gains tax;
  • tax on interest and dividends;
  • tax on wages;
  • customs duties (if for re-export);
  • tax on assets.

In addition, there are no export-import restrictions in the UAE and the control over the majority of activities is very weak. This, along with a flexible taxation system, attracts an increasing number of investors.

Conclusion

The UAE is the extremely convenient country for doing business. The first and main advantage of the country is its tax-free environment. It is very comfortable for entrepreneurs to conduct business in the territory of one of free trade zones. Free trade zones are not subject to income and corporate taxes, tax on interest and dividends, as well as tax on import and export.

The only exception is companies doing business in the oil or gas industries or banks operating at the local market. Employees of companies and individuals, living in the UAE are not taxed.

In addition, the UAE has the excellent, highly developed banking system. It is the foundation businesses can rely on. In the last decade, the UAE and Dubai, in particular, have acquired the reputation of a truly globalized financial center. The presence of an office here will very favorably affect your business.

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