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About UAE

Taxation in UAE

The UAE economy is considered throughout the world to be among the most liberal and most diversified in the region. Of all the countries globally, the UAE is probably among the very countries where no taxation on corporate profits is levied with the exception of branches of international banks, hotels and major oil and gas companies. The UAE does not levy any personal tax, capital gains tax, value added tax or withholding tax.

  • No Personal Tax
  • No Capital Tax

  • No Withholding Tax
  • No Corporate Tax expect on limited industries

While UAE has not legislated any tax laws, each Emirate can enact its own tax law. The Emirates of Abu Dhabi, Dubai and Sharjah have enacted tax laws for their respective Emirates. The Governments of these Emirates do not enforce their tax laws with an exception of the Emirates of Abu Dhabi and Dubai who levy taxes on oil, gas and petrochemical companies and branch offices of foreign banks. Service tax is levied on Hotel Services and Entertainment at a flat rate between 10% and 15%.

Taxation on Oil and Gas up to 55%
Flat rates on annual profits of branches of foreign Banks up to 20%
Flat rates service tax on Hotel Services and Entertainment up to 10-15%

Custom Duty

Under the terms of the Gulf Co-operation Council regulations (comprising the member states of UAE, Saudi Arabia, Qatar, Oman, Kuwait and Bahrain), a unified customs tariff of 5% of the c. I. f. value applies to the taxable imports of all of the GCC member states as from 1 January 2003. All existing taxes and duties on imports with in the GCC member states have been abolished.

Tobacco and tobacco products are subject to a 100% customs duty, and for alcohol the rate is 50%.

Exemptions from customs duties apply in the UAE and other GCC member states, to various items including basic foodstuffs, raw materials for manufacturing industries, spare parts for civilian airlines, diplomatic and consular missions’ imports, imports for military and internal security forces, personal effects and charitable organizations’ imports.

Special Incentives

An entity manufacturing goods in UAE can export its goods to GCC countries without duty if its manufacture involves 40% value addition and the entity is owned 51% by GCC National.

Property Tax

In most Emirates, tax is payable by residential tenants at a rate of 5% of the annual rent and or commercial tenants at 10% of the annual rent.

In Abu Dhabi a property tax in charged on the renewal and obtaining of a business license. These taxes are assessed at around 5 to 10% of the applicant’s annual office rent and 5% of the annual rental of the residence of the manager/license holder.

In Dubai, all residential properties are subject to an annual property tax payable to the Dubai Municipality. Dependent upon the employment status of the tenant a tax of between 5-15% will be payable. All professional, managerial and other senior employees in commercial and industrial sectors are charged at the rate of 5% of their annual rent, whereas in the banking sector the rate increases to 15%.

In Sharjah, all leased residential properties are subject to an annual property tax payable to the Sharjah Municipality. This tax will be equal to 2% of the annual rent shown in the tenancy agreement.

Double Taxation Avoidance Agreement

The UAE’s double taxation treaties are actually designed to make it an even more attractive destination and prospect for those individuals and companies who originate from countries with aggressive taxation policies.

The treaties are in place to further reduce any potential taxation burdens being levied against foreign companies and citizens operating in the UAE who remit their profits abroad.

Many countries have anti-avoidance provisions which either set minimum levels of tax from income to benefit from tax treaties or set out lists of low tax countries which do not qualify under tax treaties.

 

The main agreements formed are:

  1. Agreements on taxation depending on the income resulting from air transport
  2. Agreements on avoidance of double taxation on income & profits resulting from international air transport
  3. Agreements on avoidance of double taxation on income, capital gains & evasion of taxes

Jurisdiction Status Dividends Interest Royalties Notes
Albania Signed Mar 13, 2014 0% 0% 0% Not yet in force.
Algeria Eff. Jan 1, 2005 0% 0% 0%
Armenia Eff. Jan 1, 2004 0% 0% 0%
Austria Eff. Jan 1, 2005 0% 0% 0%
Azerbaijan Signed Nov 20, 2006 0% 0% 0% Not yet in force.
Bangladesh Signed Jan 17, 2011 0% 0% 0% Not yet in force.
Belarus Eff. Jan 1, 2002 0% 0% 0%
Belgium Eff. Jan 1, 1995 0% 0% 0%
Benin Signed Mar 11, 2013 0% 0% 0% Not yet in force.
Bosnia & Herzegovina Signed Sep 18, 2006 0% 0% 0% Not yet in force.
Brunei Signed May 21, 2013 0% 0% 0% Not yet in force.
Bulgaria Eff. Jan 1, 2010 0% 0% 0%
Canada Eff. Jan 1, 2004 0% 0% 0%
China Eff. Jan 1, 1995 0% 0% 0%
Cyprus Signed Feb 27, 2011 0% 0% 0% Not yet in force.
Czech Republic Eff. Jan 1, 1998 0% 0% 0%
Egypt Eff. Jan 1, 1996 0% 0% 0%
Estonia Eff. Jan 1, 2011 0% 0% 0%
Fiji Signed Sep 4, 2012 0% 0% 0% Not yet in force.
Finland Eff. Jan 1, 1997 0% 0% 0%
France Eff. Jul 1, 1990 0% 0% 0%
Georgia Eff. Jan 1, 2012 0% 0% 0%
Germany Eff. Jan 1, 2009 0% 0% 0%
Greece Signed Jan 18, 2010 0% 0% 0% Not yet in force.
Guinea Signed Nov 13, 2011 0% 0% 0% Not yet in force.
Hong Kong Signed Jul 20, 2010 0% 0% 0% Not yet in force.
Hungary Signed Apr 30, 2013 0% 0% 0% Not yet in force.
India Eff. Jan 1, 1994 0% 0% 0%
Indonesia Eff. Jan 1, 1997 0% 0% 0%
Ireland Eff. Jan 1, 2011 0% 0% 0%
Italy Eff. Jan 1, 1993 0% 0% 0%
Japan Signed May 2, 2013 0% 0% 0% Not yet in force.
Jordan Signed Jun 13, 2005 0% 0% 0% Not yet in force.
Kazakhstan Eff. Jan 1, 2010 0% 0% 0%
Kenya Signed Jul 5, 2011 0% 0% 0% Not yet in force.
Korea, South Eff. Jan 1, 2003 0% 0% 0%
Latvia Eff. Jan 1, 2014 0% 0% 0%
Lebanon Eff. May 21, 1999 0% 0% 0%
Libya Signed Apr 1, 2013 0% 0% 0% Not yet in force.
Lithuania Signed Jun 30, 2013 0% 0% 0% Not yet in force.
Luxembourg Eff. Jan 1, 2010 0% 0% 0%
Malaysia Eff. Jan 1, 2000 0% 0% 0%
Malta Eff. Jan 1, 2008 0% 0% 0%
Mauritius Eff. Jan 1, 2008 0% 0% 0%
Mexico Signed Nov 20, 2012 0% 0% 0% Not yet in force.
Mongolia Eff. Jan 1, 2001 0% 0% 0%
Morocco Eff. Jan 1, 2001 0% 0% 0%
Mozambique Eff. Apr 15, 2004 0% 0% 0%
Netherlands Eff. Jan 1, 2011 0% 0% 0%
New Zealand Eff. Sep 1, 2004 0% 0% 0%
Pakistan Eff. Jan 1, 1995 0% 0% 0%
Panama Eff. Jan 1, 2014 0% 0% 0%
Philippines Eff. Jan 1, 2009 0% 0% 0%
Poland Eff. Jan 1, 1995 0% 0% 0%
Portugal Eff. Jun 21, 2012 0% 0% 0%
Romania Eff. Jan 1, 1997 0% 0% 0%
Montenegro Signed Mar 26, 2012 0% 0% 0% Not yet in force.
Seychelles Eff. Jan 1, 2008 0% 0% 0%
Singapore Eff. Jan 1, 1992 0% 0% 0%
Slovenia Signed Oct 12, 2013 0% 0% 0% Not yet in force.
Spain Eff. Apr 2, 2007 0% 0% 0%
Sri Lanka Signed Sep 24, 2004 0% 0% 0% Not yet in force.
Sudan Signed Mar 18, 2001 0% 0% 0% Not yet in force.
Switzerland Eff. Jan 1, 2012 0% 0% 0%
Syria Signed Jan 26, 2000 0% 0% 0% Not yet in force.
Tajikistan Eff. Jan 1, 2001 0% 0% 0%
Thailand Eff. Feb 1, 2001 0% 0% 0%
Tunisia Eff. Aug 26, 1997 0% 0% 0%
Turkey Eff. Jan 1, 1995 0% 0% 0%
Turkmenistan Eff. Jan 1, 1999 0% 0% 0%
Ukraine Eff. Jan 1, 2005 0% 0% 0%
Uzbekistan Signed Oct 26, 2007 0% 0% 0% Not yet in force.
Venezuela Eff. Jan 1, 2012 0% 0% 0%
Vietnam Signed Feb 16, 2009 0% 0% 0% Not yet in force.
Yemen Signed Feb 13, 2001 0% 0% 0% Not yet in force.
Serbia Eff. Aug 1, 2013 0% 0% 0%
Palestine Signed Sept 24, 2012 0% 0% 0% Not yet in force.

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