Tax in UAE

The Federal Tax Authority UAE does not charge income tax on individuals. This is ideal for freelancers and self-employed individuals in the UAE. The branches of the foreign banks are taxed 20% in most of the UAE. The capital gains are not subjected to any tax other than its other income tax. The business does not pay any Corporate Tax in UAE. Municipality tax is imposed on properties generally based on the annual rental value. To avoid double taxation on overseas investments the UAE has got about 96 agreements with other countries. 

Property transfer tax is usually paid when there is any transfer of property between two individuals. It is about 4% in Dubai and it is burdened on the buyer.

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There are two taxes levied on goods and services in UAE: Value Added Tax (VAT) and the excise duty. Value Added Tax or the UAE VAT law was implemented on January 1st, 2018, with a standard rate of 5%. VAT is charged mostly on all the goods and services. Exports outside the GCC, international transportation, and investment-grade precious metals hold 0% VAT. Some financial services, residential properties, and bare lands are also exempt from the VAT. The VAT-registered businesses must charge VAT only on taxable goods, can reclaim the VAT they purchase and must keep the records of the VAT.

This is also another type of tax levied on particular goods which cause any harm to health and the environment called the excise tax. The goods to which the excise tax applies are – 50% of carbonated drinks or beverages, 100% on drinks that contain caffeine, taurine, and guarana, 100% on tobacco and tobacco-based products. 5% on gasoline. The new tax in UAE 2020 has made so many changes in the financial system and has benefited the business people.

Since there is no income tax for individuals there is no need for most of them to hire an accountant. But it is mandatory for large businesses to seek the help of an efficient accountant found at KGRN to file the tax. 

For enquiries, call +971 45 570 204 / E-mail:

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