Hamriyah Free Zone tax system: audit, reporting and optimization of taxation of United Arab Emirates companies and individuals: VAT, income tax and capital gains
Basic taxes (briefly)
|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|
International tax agreement
|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|
|Argentina, Colombia, Denmark, Faroe Islands, Finland, Iceland, Norway, Sweden|
Taxation of individuals
There is no income tax on individuals in the UAE.
The UAE is a federation of seven emirates. There is currently no federal tax on profits/income of companies in the UAE.
However, income tax is imposed by the emirates at their level.
In the emirates where profit tax is imposed, it is only imposed on oil and gas production and processing companies and branches of foreign banks.
Social contributions are payable only to nationals of the UAE and other member states of the Gulf Cooperation Council (GCC).
The contribution rate for UAE nationals is normally 17.5%:
12.5% of the remuneration is paid by the employer and 5% is withheld by the employer from the employee's remuneration.
Higher rates are set in Abu Dhabi: 20% (the employer's contribution is 15%).
The standard rate of VAT is 5%.
There is no tax at source in the UAE.
There is no stamp duty in the UAE.
The annual fee for companies is AED 2,000. The fee is payable at the end of each year of incorporation, as is the registration agent fee.
Other taxes and fees
Municipal tax is collected on rented premises. Generally, the tax base is the annual rental value.
The tax is usually levied on tenants, in some cases both tenant and landlord.
The rate for commercial property is usually 10%.
Registration fees may be charged, particularly for land and real estate transactions.
There are also fees in respect of hotel and tourist businesses.
International tax treaties
The UAE has entered into 99 Double Tax Treaties (DTC) and 8 Tax Information Exchange Agreements (TIEA) with the following jurisdictions:
99 DTCs: Algeria, Andorra, Armenia, Austria, Azerbaijan, Bangladesh,Barbados, Belarus, Belize, Belgium, Bosnia and Herzegovina, Bulgaria, Brunei, Burundi, Hungary, UK, Guinea, Germany, Greece, Hong Kong, Georgia, Jersey, Egypt, Venezuela, Vietnam, India, Indonesia, Ireland, Italy, Jordan, Kazakhstan, Kenya, Canada, China, Colombia, Comoros, Kosovo, Kyrgyzstan, Latvia, Lebanon, Libya, Liechtenstein, Lithuania, Luxembourg, Malaysia, Malta, Macedonia, Mauritius, Morocco, Spain, Yemen, Mauritania, Mexico, Mongolia, Mauritius, Mozambique, Netherlands, New Zealand, Nigeria, Pakistan, Panama, Paraguay, Poland, Portugal, Romania, Saint Kitts and Nevis, Senegal, Serbia, Seychelles, Singapore, Slovakia, Slovenia, Sudan, Syria, 8 TIEAs: Argentina, Czech Republic, Ecuador, Equatorial Guinea, Estonia, Ethiopia, Fiji, Finland, France, Montenegro, South Africa, Sri Lanka, Switzerland, Tajikistan, Thailand, Tunisia, Turkey, Turkmenistan, Uganda, Ukraine, Uruguay, Uzbekistan, Japan.
8 TIEAs: Argentina, Colombia, Denmark, Faroe Islands, Finland, Iceland, Norway, Sweden.
In addition, the UAE has signed and ratified the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI). The Multilateral Convention entered into force for the UAE on September 1, 2019.
There are no currency controls in the UAE.
Taxes of UAE
|Min. rate for corporate tax||No|
|Capital gains tax||No|