• UAE - Dubai Tax System

  • GENERAL

    A company is considered to be tax resident in Dubai (United Arab Emirates) if it is incorporated in the United Arab Emirates and provided that it can establish that:

    • all the shares of the company are beneficially owned by residents of the United Arab Emirates; and
    • all or substantially all of the company's income is derived from the active conduct of a trade or business, other than an investment business, in the United Arab Emirates.

    However, United Arab Emirates offer several free trade zones where foreign shareholding of companies is permitted. The most popular free trade zone is in Dubai, the Dubai International Financial Centre ("DIFC"). Our analysis below covers only taxation of DIFC companies.

  • TAX RESIDENCY

    Tax Residency

    A company is considered to be a tax resident of Dubai DIFC if it is registered in Dubai DIFC and its management and control is exercised in Dubai.

    Taxable Basis

    Not applicable since there are no taxes on income and profits of Dubai DIFC companies.

  • TAX ADMIN

    Taxable Period

    Not applicable since there are no taxes on income and profits of Dubai DIFC companies.

    Tax Returns

    Not applicable since there are no taxes on income and profits of Dubai DIFC companies.

    Tax Assessments

    Not applicable since there are no taxes on income and profits of Dubai DIFC companies.

  • CORPORATION TAX

    Corporation Tax

    There are no taxes imposed on income and profits of companies in Dubai DIFC.

  • DIVIDENDS

    Dividend Income

    Dividend income of a Dubai DIFC company from local or foreign investments is not subject to tax.

    Withholding Tax on Dividends

    There is no withholding tax on dividend payments to local or foreign recipients.

  • INTEREST

    Interest Income

    Interest income of a Dubai DIFC company is not subject to tax.

    Interest Expense Deductibility

    Interest expense is not tax-deductible since interest income is not taxable.

    Withholding Tax on Interest

    There is no withholding tax on interest payments to local or foreign recipients.

  • ROYALTIES

    Royalty Income

    Royalty income of a Dubai DIFC company is not subject to tax.

    Royalty Expense Deductibility

    Royalty expense is not tax-deductible since royalty income is not taxable.

    Withholding Tax on Royalties

    There is no withholding tax on royalty payments to local or foreign recipients.

  • TAX LOSSES

    Ordinary Tax Losses

    Not applicable since there are no taxes on income and profits of Dubai DIFC companies.

    Group Relief

    Not applicable since there are no taxes on income and profits of Dubai DIFC companies.

  • CAPITAL GAINS

    Disposal of Shares by Foreign Shareholder

    The gain on disposal of shares in a Dubai DIFC company by its foreign shareholder is not taxable.

    Capital Gains

    Capital gains of a Dubai DIFC company are not taxable.

    Capital Losses

    Not tax-deductible since capital gains are not taxable.

  • PARTNERSHIPS

    Partnership Profits

    Not applicable since there are no taxes on income and profits of Dubai DIFC companies.

  • BRANCHES

    Branch Profits

    A Branch is treated in the same manner as other types of companies in the Dubai DIFC and therefore not subject to any tax.

    There is no remittance tax on profits transferred by a Dubai DIFC Branch to its foreign head office.

  • STAMP DUTY

    Stamp Duty

    There is no stamp duty in Dubai DIFC.

  • CAPITAL DUTY

    Capital Duty

    There is no capital duty in Dubai DIFC.

  • VAT

    There is no VAT in Dubai. However there is growing speculation that the United Arab Emirates will introduce VAT in the near future.

Compare Dubai to other jurisdictions and see the difference in corporation tax rates, tax residency requirements, VAT rates, capital gain taxes, etc.

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