What is the present corporate tax rate in Dubai?

Answer 1

The UAE does not have any federal income tax on wages or salaries. Each emirate can impose income taxes but none do, and it would be very unlikely for that to change in the near future although there has been talk of introducing income tax in the past. Look to Saudi Arabia as a guide, where the idea has been mooted more often or more seriously, but usually dismissed. If it ever does happen there, the UAE could follow suit.

Exceptions below:

• Foreign banks are subject to a 20% corporation tax on profits earned in the emirates of Abu Dhabi, Dubai, and Sharjah (according to government.ae, the UAE government website). Local banks do not have any UAE tax bills.

• Oil companies are subject to a 55% tax rate in Dubai and 50% in other emirates, in addition to royalties

Sales tax already exists, or some form of it does, in the UAE. For example:

• Alcohol in Dubai attracts 30% sales tax (or none if you buy it illegally - one reason why many do)

• Hotel services and entertainment attract a 5% municipality tax ie rooms, food, other services.

• Restaurants often add a service charge of 5-15% so you will usually see "++" written on menus indicating plus municipality tax plus service charge. And in case you're wondering, that service charge rarely ends up in the pockets of the service personnel. Just another one of Dubai's many ironies.

• Cigarettes attract some tax, so yes, in answer to that perennial question, they are slightly cheaper at airport duty free. And the limit was reduced to 200 cigarettes (1 carton) from 2000 (10 cartons) several years ago. Not that anyone seems to take any notice.