Let’s dream, let’s take a breather, let’s talk about Taxation in Dubai

Dubai, one of the Seven Emirates that together form United Arab Emirates (UAE), has one of the most liberal Taxation systems in the World.

Dubai maintains its own judicial system, separate from the other Emirates.

Currently no Taxes are payable on Income by Individuals in Dubai, in addition to this there is no Tax on Capital Gains, no Value-added Tax and no Withholding Tax etc.

In Dubai, all Companies are required to pay Tax on their Income on a sliding scale of upto a maximum of 55%, however, practically, only Oil, Gas and Petrochemical Companies and Branches of Foreign Banks pay Tax.

Tax slab applicable to aforementioned Companies, with the exception of Branches of Foreign banks to whom 20% flat rate of Tax is applicable, is as follows:

On Income less than 10,00,000 AED, Tax is 0%

On Income equal to or more than 10,00,000 but less than 20,00,000 AED, Tax is 10%

On Income equal to or more than 20,00,000 but less than 30,00,000 AED, Tax is 20%

On Income equal to or more than 30,00,000 but less than 40,00,000 AED, Tax is 30%

On Income equal to or more than 40,00,000 but less than 50,00,000 AED, Tax is 40%

On Income more than 50,00,000 AED, Tax is 55%

If we convert AED to INR then, in the above case, in Dubai there is no Tax on Income of upto INR 1.7 Crores approx., sounds like a dream, isn’t it?

Custom duties are very low, however, all properties are subject to an annual property tax which ranges from 5% to 15%.

Dubai extends further Tax benefits to people and organisations across the World via Double Taxation Avoidance Agreements which it has with several nations.

No doubt that despite being such a small Emirate, it attracts so much of investment and continues to remain prosperous. Though it has other circumstances in its favour but still, having sustained one of the toughest Economic crashes, its regaining its Gold!!!!

(Compiled by  CA Sahil Jolly – Jolly & Co. Chartered Accountants, Contact: +91-9999830077, Email : [email protected])

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  1. PANKAJ SIBAL says:

    In India a few years ago there were standard deduction on salaried employees say 1/3rd of total salary or Rs.1 lac, which has been withdrawn by the UPA government, where as they should have given more benefit to salaried class, since after 60 years of age they are not employed, majority of employees are in private unorganised sector, where no retirement benefits are available. The withdrawal of standard deduction by the government is very much unjustified and is a blow to the middle class employees working in India. The vote bank of Government is poor class which are getting freebies, the wealthy people have their own system to earning and are being looked upon by the government since the ruling party always wants funds, rest remains middle class, who are always target for easy squeezing by the ruling party, always. I am wondering why no political party, no news magazines, no TV highlights this lacunae?!!!

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June 2021