Your Experts in Taxation in Dubai

Dubai’s attractive tax environment makes it a popular destination for entrepreneurs and expatriates. This guide covers key aspects of Dubai’s tax system, focusing on its implications for foreign residents.

Personal Taxation in Dubai

One of Dubai’s major advantages is the absence of personal income tax. Residents are not subject to taxation on salaries, investments, or other sources of personal income.

Additionally, there is no wealth tax or inheritance tax, offering a particularly favorable tax framework for individuals.

Corporate Taxation in Dubai

Historically, Dubai did not impose corporate tax, except on specific industries such as oil and gas and foreign banks.

However, since June 1, 2023, a federal corporate tax has been introduced in the UAE, including Dubai.

Free Zones in Dubai continue to offer tax incentives, including periods of corporate tax exemption, subject to meeting certain conditions.

Value Added Tax (VAT)

Introduced in January 2018, VAT in the UAE is set at a standard rate of 5%.

VAT applies to most goods and services, with some exceptions such as:

Businesses with an annual turnover exceeding a certain threshold are required to register for VAT and collect the tax on their sales.

Tax Residency and Obligations for Expats Residents

To benefit from Dubai’s favorable tax environment, it is important to understand the criteria for tax residency.

An individual is considered a Expat tax resident if they meet any of the following criteria:

Therefore, to be considered a tax resident of Dubai, it is essential to effectively transfer your home and center of economic interests to the UAE.

It is recommended to keep tangible evidence of this transfer, such as:

Precautions and Advice for Foreign Residents

Documentation: Keep proof of your residence in Dubai, such as rental contracts, utility bills, and registrations for local services.
Economic activities: Ensure that your main professional and economic activities are based in Dubai.
Professional advice: Consult tax experts specializing in both French and Emirati legislation to ensure full compliance and optimize your tax situation.

Conclusion

In conclusion, Dubai offers an attractive tax environment for expatriates, with an absence of personal income tax and competitive corporate tax rates.

However, it is crucial to fully understand the tax implications, both in the United Arab Emirates and your home country, and to take the necessary steps to clearly establish one’s tax residence in Dubai.