Tax climate in Dubai, UAE

Despite thecomfortable tax system in Dubai, some nuances apply to foreigners. There is really no income tax in the emirate, but the excise tax on energy drinks and tobacco products is 100%. There are not only buy-to-live properties, but also off-plan projects in Dubai for investment. Thesources - https://www.axcapital.ae - will tell you about the specifics of taxation and what taxesindividuals and companies must pay. _________________________________________________________________________ Tax system in the UAE:- The UAE is a country with a minimal tax burden. Taxes on income, capital of individuals and inheritance are not levied. The tax is levied only on a very limited number of enterprises, for instance, branches of foreign banks and foreign companies involved in the oil and gas industry. _________________________________________________________________________ Value-added tax was introduced in the Emirates in January 2018 by the Federal Tax Authority (FTA), but it is just 5%. _________________________________________________________________________ Federal taxes:- Federal taxes are a list of fees established by the government and are mandatory for payment throughout the territory of each of the Emirates. Federal taxes make up a significant share of the state budget. A certain circle of taxpayers is established for each type of federal fees such as: _________________________________________________________________________ • Individuals; _________________________________________________________________________ • Legal entities; _________________________________________________________________________ • Individual entrepreneurs. _________________________________________________________________________ Income taxes:- In Dubai, as in all other Emirates, individual income tax is not charged, so there is no need to return the tax within the country. This rule applies equally to freelancers and self-employed persons who have a resident visa. _________________________________________________________________________ Individual tax:- Social security contributions to General Pensions and Social Security Authority (GPSSA) apply only to UAE citizens and locals of countries, which belong to the Persian Gulf. Emirati citizens must pay 5% of their salary as a social security contribution. Employers must pay 12.5%. If the employer is a state institution, the amount of payment will increase to 15%. Social security contributions are also obligatory for employees of companies registered in the free-zones. _________________________________________________________________________ Corporate taxes:- Only oil producing companies and branches of foreign banks are subject to corporate tax in the Emirates. This type of tax does not apply to any other industries other than the above. In Dubai, oil companies are subject to the maximum corporate income tax that is 55% of the income received in the UAE. _________________________________________________________________________ Enterprises registered on the territory of free-zones are exempt from paying taxes for a certain period, which can be extended. Currently, there are 45 free trade zones in the UAE, which are business zones with special customs, tax and import regimes, where companies and organizations in such areas are exempt from paying taxes, including corporate taxes. _________________________________________________________________________ Double taxation:- The double tax is paid by a company whose branches are located in different Emirates. This has a negative impact on the exchange of services, goods and capital between the two states. For this reason, an agreement on non-double taxation (DTA) is concluded between the countries. _________________________________________________________________________ Tax on tourist places:- This form of taxation is valid in hotels, restaurants and resorts. Its cost is included in the cost of services and maintenance, such as: _________________________________________________________________________ • Room service fee - 10% _________________________________________________________________________ • Municipal fee - 10% _________________________________________________________________________ • City tax - from 6 to 10 % _________________________________________________________________________ • Tourist fee - 6 % _________________________________________________________________________ Property transfer:- The tax for the transfer of real estate is paid in the case of direct and indirect transfer of real estate located in the UAE. The fee also includes the transfer of shares of a company that owns real estate in the Emirates. _________________________________________________________________________ As a rule, the tax is divided between the seller and the buyer. However, the commission can only be paid by the buyer. The conditions may differ depending on what is written in the contract. _________________________________________________________________________ When they pay for the transfer of property:- _________________________________________________________________________ • When selling or buying a property _________________________________________________________________________ • When renting out real estate; _________________________________________________________________________ • When buying with a mortgage. _________________________________________________________________________ Obligatory notary fees in all emirates of the country are paid to a notary public for the certification of corporate documents for legal purposes. Notary fees in Dubai and Abu Dhabi can range from AED 100 (USD 27) to AED 500 (USD 136). _________________________________________________________________________ State taxes:- This taxes in the Emirates include special tax regimes in free trade zones, tourist fees from each emirate and rental tax. _________________________________________________________________________ Free trade zones:- There are about 45 free trade zones in the United Arab Emirates. There are special tax, import and customs regimes in these territories. Within these zones, companies are exempt from paying corporate tax for up to 50 years. In addition, organizations have 100% exceptions for import and export taxes. _________________________________________________________________________ Our assistance in buying a property in Dubai:- To find real estate for investment, business and life in Dubai, contact AX Capital specialists. The agents will select the object according to your preferences and needs, as well as help to conduct a secure purchase and sale transaction.