Tax Planning in Dubai

Tax planning in Dubai is relatively simple compared with most jurisdictions. It is essentially a 'no-tax' jurisdiction with relatively simple tax laws compared to many 'onshore' jurisdictions. When undertaking any tax planning in Dubai, it is important to note the following:
1.	In general, companies in Dubai pay no corporate tax, no value-added tax (VAT), no withholding tax and no capital taxes. In practice, only branch offices of foreign banks, as well as oil, gas and petrochemical companies, pay tax.
2.	Oil companies pay up to 55% tax on taxable income sourced in UAE, which is defined in the concession agreement. Oil companies are also obliged to pay royalties on their output.
3.	Banks pay 20% tax on taxable income, which is stipulated in the audited financial statements.
4.	Import duty is a standard 4%, although there are exemptions for the following products:
	i)	Food
	ii)	Building materials
	iii)	Medical products
	iv)	Items which are destined for Jebel Ali Free Zone (JAFZA), Dubai Internet City or the Dubai International Financial Centre.
5.	Because it is part of the United Arab Emirates (UAE), Dubai is obliged to charge a 10% duty on luxury good imports.
6.	A 10% business properties tax is levied on the the annual rental value.
7.	Dubai has signed double taxation treaties with several countries. Under these treaties, profits sourced from shares, dividends, interest, royalties and fees are taxable only in the contracting state where the income is earned.
8.	When conducting any tax planning in Dubai, it is important to note that many countries have anti-avoidance provisions which either set minimum levels income tax to benefit from tax treaties, or set out lists of low-tax countries which do not qualify under tax treaties.
Contact Us
For additional information on tax planning in Dubai, contact us at email@healyconsultants.com or phone us at (+65) 6735 0120
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