19 08 2020

Tax system in the United Arab Emirates

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You may have heard that the UAE lacks some taxes that are mandatory in many countries. This creates the right investment climate and, consequently, an inflow of foreign funding. Let's take a closer look at the tax system in the UAE.

If you look at the whole picture, you can see that each of the Emirates carries its own unique tax conditions. However, there are some taxes that apply to all emirates at once. If we consider the tax agreements concluded in the UAE, then they apply immediately to all the Arab Emirates.

The authorities of the United Arab Emirates are very active in signing agreements to avoid double taxation on capital growth and profitability of the population. At the moment, the Arab Emirates has more than 115 signed agreements with various countries, for example, with Belgium, Ukraine, Austria, Czech Republic, China and others.

In the United Arab Emirates, there are no tax duties on capital gains and personal income.

What taxes exist in the UAE?

- Tourist tax on services;

As an example, we can cite a 10% tax for tourists who pay for service or want to rent a hotel room. Also, there are various 10% municipal taxes in the UAE.

There are also objects for tourists that charge a duty in the form of tourist taxes in the amount of 6% or in the form of a city tax (from 6 to 10%).

- Rental tax;

This fee is charged on the amount of rent per year in the amount of 5%. This tax applies to rent in all United Arab Emirates.

In the capital, the tax is slightly less and amounts to 3%, and also, it does not apply to local residents. In the Emirate of Sharjah, everyone pays tax at a rate of 2%.

- Property tax;

When transferring property in the UAE, you need to pay 4% tax in Dubai, and 2% in Abu Dhabi.

The UAE offers some of the most favorable conditions for real estate investment worldwide.