Taxation in the UAE 5 Things Expatriates Should Know

Taxation in the UAE 5 Things Expatriates Should Know

Taxation in the UAE 5 Things Expatriates Should Know

The government of the UAE has worked hard to maintain high profitability so as to subtly invite investors who are always out on a hunt for new areas of business and look to expand their business empires to avenues that they have not explored. This is the reason why the UAE authorities have provided many incentives in many different forms to investors and entrepreneurs.

  1. The government has provided great infrastructure development that has made business easier for investors as this infrastructure supports and encourages business growth. The government has made sure that there is not an ounce of discomfort for entrepreneurs and investors.
  2. Another incentive is quick and easy processing of relevant documents for company setup in Dubai.
  3. The authorities have worked on legislation for many new types of businesses in order to create an environment in the UAE that is friendly for those who bring in new ideas. This is the third incentive for people looking to own a company setup in Dubai.
  4. The UAE government is also famous for allowing businesses to pay low taxes and even exempt them from taxes so that costs for businesses reduce significantly.

UAE taxation

a.  UAE does not require you to pay income tax

This is true. Many people talk about how taxation is low in the UAE and how this reduces business’ cost by a lot and increases the profitability. Unlike other countries, there is going to be no difference between your gross and net income on your salary slips at the end of month. For foreigners, the added advantage is that they are not liable to pay for funds for retirement and public pension.

b.  You should know something important

There are always stipulations for anything good offered to you by the government. You are liable to pay income tax if you are a tax payer In your country of origin. Also, if you own property in the UAE and you are living outside of the UAE, you are liable to pay tax on the rent income that you get from your property in the UAE.

The tax-free living is only for those foreigners who either declare themselves non-tax residents of the country of origin, are out of that country for a whole year or permanently move to the UAE.

c.  Corporate taxes

You should learn about business and corporate taxes in the UAE if you are willing to start your own business. Oil and gas companies as well as bank branches of foreign banks are liable to pay taxes to the government. The application for renewal of trade license is also taxable. For importers and exporters, relevant fees and charges are levied.

d.  Indirect taxation

Indirect taxes are to be paid by the people in the UAE and these are applicable for everyone. Taxes are collected for services like street lights and garbage collection and other such services.

d.  Expats do no pay taxes twice

According to agreements signed between the UAE and 60 other countries, foreigners do not have to worry about paying taxes to two separate governments on the income they earn. You should read up on that for more information.

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