Tax information: going to United Arab Emirates.
Welcome to the tax guide on going to United Arab Emirates, produced by Deloitte. Looking for tax information about leaving United Arab Emirates, Click here
This document has been prepared based on the legislation and practices of the country concerned as at 01 April 2009. Tax legislation and administrative practices may change, and this document is a summary of potential issues to consider. This document should not be used as a substitute for professional tax and immigration advice which should be sought for the country of arrival and departure in advance of moving in order to discuss your specific circumstances.
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Before/once you arriveQ. Do I need a work permit to work in UAE?
A. A work permit and an entry visa are required before the arrival of a foreign worker in the UAE, and upon arrival the worker must apply for a residence permit. Sponsorship is required for the work permit, and certain restrictions apply to the number of foreigners granted such permits. It is reported that quota levels have recently been established for foreign workers and that steps are being taken to enforce “emiratisation”, that is the employment of UAE nationals.
Q. Should I open an offshore bank account or is it beneficial to open an account on UAE mainland?
A. Offshore bank accounts do not create additional tax advantages from a UAE perspective where, but they may be advisable from a home country tax perspective.
Q. What is the tax year?
A. 1 July to 30 June.
Q . How will I be taxed in the UAE?
A. No personal taxation exists in any of the emirates.
Q. Are there any regional or state taxes?
A. The Dubai Municipality levies several local fees and taxes:
- a residential buildings tax at 5% of the rental income on residential leases and letting of hotel rooms to foreign nationals (increased to 10% with effect from 1 May 1998);
- a commercial property tax at 10% of rental income;
- a market tax or fee for the rental of stalls in the various local markets; and
- a vehicle registration charge.
Q. Do I need to file a UAE tax return?
A. No. Individuals do not need to file an annual tax return.
Q. Does UAE have a Capital Gains Tax regime?
A. There is no taxation on capital gains in UAE.
Q. What do I need to know about any other tax regime, e.g. Inheritance, Estate or Wealth tax?
A. Currently there is no value-added tax (VAT) or general sales tax in the UAE, although it is expected that VAT will be introduced within the near future. In the absence of a will, inheritance is dealt with in accordance with Islamic Sharia principles.
Q. Will I be required to pay Social Security in UAE?
A. The UAE does not impose social security taxes on foreign workers. Employer pension contributions for national employees are mandatory at 12.5% of “contribution calculation salary”. In addition, national employee contributions are levied at 5% of the contribution calculation salary.
