GSL / International Taxation / Tax systems of foreign countries / United Arab Emirates: Dubai Multi Commodities Centre (DMCC) Free Zone

United Arab Emirates: Dubai Multi Commodities Centre (DMCC) Free Zone

Basic taxes (briefly)

Personal tax No
Corporate tax (in detail) There is currently no federal corporate income tax in the UAE. However, the emirates introduce income tax at their own level. In the emirates, where income tax has been introduced, it is levied only on companies engaged in the extraction and processing of oil and gas and branches of foreign banks.
Capital gains tax. Details There is no capital gains tax in the UAE
VAT. Details The standard VAT rate is 5%.
Other taxes real property tax, municipal duties
Government fee
Stamp duty No

International tax agreement

   


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TAXATION

Individual Taxation

The UAE does not levy personal income tax.

Corporate Income Tax

The UAE is a federation of seven emirates. There is currently no federal tax on corporate profit/income in the UAE. However, corporate tax is imposed at the level of individual emirates.
The emirates that do have corporate tax only charge this to oil and gas extraction and processing companies and to branches of foreign banks.

Social Security Contributions

Social security contributions only apply to citizens of the UAE and of other Gulf Cooperation Council countries.
The contribution rate for UAE citizens is usually 17.5%: 12.5% of the remuneration is paid by the employer, and 5% is withheld from the employee's remuneration.
Abu Dhabi has higher rates: 20% (employer's contribution is 15%).

VAT

The standard VAT rate is 5%.

Withholding Tax

The UAE has no withholding tax.

Other Taxes and Contributions

Municipal tax is charged on rented premises. The tax base is normally the annual rent.
Typically, the tax is levied on tenants, in some cases both on the tenant and the landlord.
The rate for commercial property is generally 10%.
Registration fees may apply, in particular for land and real estate transactions.
There are also fees for hospitality and tourist businesses.

Tax Returns

Since most companies do not have an obligation to pay corporate taxes, they do not file corporate tax returns.

Double Tax Agreements

The UAE have exchange of information relationships with 106 jurisdictions through:
  • 99 DTCs: Albania, Algeria, Andorra, Armenia, Austria, Azerbaijan, Bangladesh, Barbados, Belarus, Belgium, Belize, Benin, Bosnia and Herzegovina, Brunei Darussalam, Burundi, Canada, China, Comoros, Cyprus, Czech Republic, Ecuador, Egypt, Equatorial Guinea, Estonia, Ethiopia, Fiji, Finland, Former Yugoslav Republic of Macedonia, France, Georgia, Germany, Greece, Guinea, Hong Kong (China), Hungary, India, Indonesia, Ireland, Italy, Japan, Jersey, Jordan, Kazakhstan, Kenya, Korea (Republic of), Kosovo, Kyrgyzstan, Latvia, Lebanon, Libya, Liechtenstein, Lithuania, Luxembourg, Malaysia, Malta, Mauritania, Mauritius, Mexico, Mongolia, Montenegro, Morocco, Mozambique, Netherlands, New Zealand, Nigeria, Pakistan, Panama, Paraguay, Philippines, Poland, Portugal, Romania, Russian Federation, Saint Kitts and Nevis, Senegal, Serbia, Seychelles, Singapore, Slovakia, Slovenia, South Africa, Spain, Sri Lanka, Sudan, Switzerland, Syrian Arab Republic, Tajikistan, Thailand, Tunisia, Turkey, Turkmenistan, Uganda, Ukraine, United Kingdom, Uruguay, Uzbekistan, Venezuela, Viet nam, Yemen/
  • 8 TIEAs: Argentina, Colombia, Denmark, Faroe Islands, Finland, Iceland, Norway, Sweden.

It should be noted that the above treaties do not apply to offshore companies.

Foreign exchange control

There is no foreign exchange control in the UAE.

Economic Substance Reporting

UAE companies and some other types of entities must comply with the requirements established by the UAE economic substance legislation.
In particular, all companies must submit an Economic Substance Notification (the filing deadline is within 6 months of the end date of the company's financial year).
If a company conducts a relevant activity and derives income from it, then it must also submit an Economic Substance Report (within 12 months of the end date of the relevant financial year) and meet the economic substance test. The scope of required economic substance depends on the type of the relevant activity (for example, holding activity that only generates income in the form of dividends and capital gains is subject to reduced requirements, while high-risk intellectual property activities are subject to more requirements).
The legislator exempts a number of UAE registered companies, which conduct relevant activities, from meeting the economic substance test and submitting the Economic Substance Report: an investment fund, a company that is tax resident in another country; a company owned by a UAE resident (subject to certain conditions) and a UAE branch of a foreign company, if the income of such branch is subject to tax in another country.

    Taxes of UAE

    Min. rate for corporate tax No
    Capital gains tax No
    VAT 5%
    Withholding tax No
    Exchange control No
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