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])