If you are thinking about moving to live and work in the UAE you have probably heard that there is no income tax in Dubai.

    This is correct...

    ...No tax is seemingly levied against your income if you go and work in Dubai or if you have an investment property in the city and rent it out for profit.

    However, this is not the entire picture. Which is why, we lay out the facts about tax in Dubai to set the record straight.

    A Tax Free Emirate?

    Is it really tax-free in the UAE? Yes, it is - but not in all circumstances! There are times when you will have to face tax, and there are tips that you need to know about taxation in Dubai if you are thinking of going to live and work in the emirate.

      The UAE levies no personal taxation on income: what is more, in reporting on a broadcast last year, Sheikh Mohammed bin Rashid Al Maktoum, the Vice President and Prime Minister of the UAE and the Ruler of Dubai as having stated that: “his country would never adopt an income tax as a way to tackle the deficit. ‘My reply is: No income taxes.’”

    This means that it is unlikely that tax will ever be levied on an individual’s income in Dubai. However, if you earn your income in Dubai but are tax resident elsewhere, you may be subject to taxation on your income – this is because your tax obligations also depends on where you are resident for taxation purposes.

      For example, if you live in the UK and have an investment property in Dubai from which you earn a rental income, you will have to declare this income on your UK tax return and potentially pay tax on it if your overall earnings are above the nil rate band for income tax. Even if you live and work in the emirate for six months, you are likely to remain ordinary resident in the UK for tax purposes and your income could again be subject to British taxation.

      If on the other hand you move permanently to live and work in the UAE, or you become non-resident for tax purposes in your home country, then you should be fine.

      In short: you can earn your salary in Dubai 100% free of income taxation.

    Other taxes in Dubai

    In terms of other taxes in Dubai, they do exist contrary to popular belief. For a start the profits of international banks and energy firms operating in the UAE are taxed at the federal level.

    Further, you are taxed on any visit to a hotel in Dubai or even a meal out: tax adds 10% to your bill. Alcohol is heavily taxed upon importation, it is 50% to bring it in to the country and then another 30% if you have a liquor license and buy alcohol for home consumption.

    There is also a form of council tax when you pay your utility bills – and many people protest against this tax as it is supposedly for street lighting, waste collection etc and yet most residents pay for this through maintenance fees. And there is a 10% municipality tax as well as 5% municipality tax on rental income.

      In 2018, the UAE introduced a 5% VAT to mostly all purchases of services and goods sold in the UAE.

    Do you want to live a tax-free live in the UAE?

    You also can potentially earn your salary 100% free of tax in Dubai if you are tax resident in the emirate and have no other obligation to any other state for the payment of tax on foreign earned and sourced income.

    In order to do, you would have to obtain a residence permit.

    Residence permits

    Individuals, other than UAE and GCC citizens, must have a residence visa if they want to live in the UAE. Obtaining a residence permit is the primary condition for being considered as resident in the UAE. As a general rule, one has to have a sponsor in order to apply for a residence permit in the jurisdiction.

      For many expatriates, the company that employs them will act as their sponsor and secure them residence visa. For those who do not come on an employment contract, there are two other ways for obtaining UAE residency:

    • Investment in real estate (property residence visa)
    • Set up your own companyto act as sponsor

    Real estate investor/property residence visa

    The UAE government in June 2011 introduced a new system extending the validity of the visa granted to real estate investors for up to 3 years.

    The following rules and conditions govern the issuance of a real estate investor visa:

    • The property is built and ready for accommodation;
    • the applicant proves ownership (title deed issued by the Land Registrar);
    • the property is worth minimum AED 1 million (equivalent to US$300.000) with no mortgage;  and
    • the applicant’s income is higher than AED 10.000 (US$3.000) monthly.
     

    Setting up your own company

    The other way to obtain residency is through a corporate structure.

      As a general rule, one has to have a sponsor in order to apply for a residence permit in the jurisdiction. For foreigners, setting up a company is a practical way of obtaining sponsorship. This company acts as the sponsor.

      As far as the company is concerned, it must have physical presence in the UAE. In that regard, the most interesting and cost effective options are proposed by free zones situated in the northern emirates. Usually, these options consist of “flexi desks” or “flexi offices”.

    Are you interested in moving to Dubai? Simple contact us .

    Why don't you pay tax in Dubai?
    Like the rest of the UAE Dubai earns its revenue mainly through the oil industry and uses its no-tax policy to attract skilled expats and global companies to diversify and enrich its economy further. more
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    Portugal is one of the best places in the world to live if you want to avoid paying crypto taxes. Since 2018, all proceeds from selling crypto are tax free. Crypto trading isn't considered investment income either. Provided you're not a business, your crypto is also exempt from VAT and income tax in Portugal. more
    Is Dubai income tax free?
    Apart from the high quality of life, the foremost reason for such enthusiasm for Dubai is the fact that Dubai is a tax-free nation. There is no income tax on income generated in Dubai. Also, there is no sales tax on the majority of goods and services. more
    Is Dubai tax Free salary?
    There is currently no personal income tax in the United Arab Emirates. As such, there are no individual tax registration or reporting obligations. more
    Why Dubai has no income tax?
    Dubai is an island with literally no production of its own. Apart from oil, everything else in Dubai has been imported. Most of these imports are also exempt from taxation. more
    Is Dubai tax Free on crypto?
    As we've mentioned, in Dubai there's no Personal Income Tax or law regulating it, and cryptocurrencies are exempt from taxation in its free zones since September 2021. And this exemption covers any cryptocurrency operations: sale, staking, high-frequency or algorithmic trading, Defi or farming, mining or sale of NFTs… more
    Which countries don t tax cryptocurrency?
    While most nations tax crypto with capital gains tax or income tax, there are a few crypto tax havens and countries where you'll pay less crypto tax.In this article, we will cover below countries:
    • Belarus.
    • Cayman Islands.
    • El Salvador.
    • Germany.
    • Malaysia.
    • Malta.
    • Portugal.
    • Puerto Rico.
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    Do you pay property tax in Dubai?
    There is no special tax regime for expatriates in the U.A.E., according to a report by Santander Bank. That means expats in Dubai, the U.A.E.'s largest city, also benefit from the area's policy of not taxing individuals. There's no property tax on homes, as well as no income or inheritance tax. more
    What is income tax rate in Dubai?
    0 percent The Personal Income Tax Rate in the United Arab Emirates stands at 0 percent. source: Ministry of Finance. more
    Is Dubai a tax-free country?
    Apart from the high quality of life, the foremost reason for such enthusiasm for Dubai is the fact that Dubai is a tax-free nation. There is no income tax on income generated in Dubai. Also, there is no sales tax on the majority of goods and services. more
    Is Dubai tax Free for forex traders?
    Forex Trading is not only legal in the UAE but also Tax Free! more

    Source: www.freemontgroup.com

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