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United Arab Emirates: Offshore Company in Ras Al Khaimah (RAK)

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

Personal income tax is not levied in the UAE.

Corporate Income Tax

There is no corporate tax at the federal level. At the level of each Emirate, decrees were issued on taxation of companies, which, however, did not enter into force and are not applied. The exception is some companies that are engaged in oil and gas production, oil products, as well as branches of foreign banks.
50-year tax holidays are provided to free zone companies at the legislative level.
Offshore companies are fully tax exempt in the UAE, but are not allowed to conduct business in the territory of the Emirates.

Capital Gains Tax

No tax is imposed on capital gains in the UAE.

Dividends

Dividends are not subject to taxation.

VAT

НДС

From 1 January 2018, the UAE introduced a Value Added Tax.
VAT as a general consumption tax applies to all transactions with goods and services, unless such transaction is exempted or taxed at 0% rate.
The standard VAT rate in the UAE is 5%.
There is no obligation to register for VAT unless sales turnover in the country exceeds the registration threshold, which is AED 375,000 (~ USD 100,000) in the UAE.
Registration as a VAT taxpayer is required in the following cases:
  • there is reason to believe that the taxable turnover in the next 30 days will exceed the registration threshold (for example, a contract has been made);
  • at the end of the month, the taxable turnover for the previous 12 months actually exceeded the registration threshold;
  • the company receives services to be included in the return using the reverse charge method, in excess of the registration threshold.

Withholding Tax

There is no such tax in the UAE.

Stamp Duty

Stamp duty is not levied in the UAE.

Other Taxes and Duties

Real Property Tax each transaction with real property is object to 4% tax of the contract value.
Municipal Duties levied on the hotel services as well as lease of living and commercial property.

Anti-Avoidance Rules

Transfer pricing: no.
Thin capitalization: no.
Controlled foreign companies: no.

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.

ACCOUNTS

Financial Statements

An offshore company does not have an obligation to submit its financial statements to any government authorities in the UAE, however, in accordance with part 7 of the Ras Al Khaimah International Commercial Companies Regulations 2006, the company must keep records of its business activities sufficient for the directors to determine the financial position of the company. A company must also keep at its registered office a book of accounts showing the company’s assets and liabilities, as well as money received or expended by the company

Audit

No audit requirement.

Tax Returns

It is not required to file tax returns.

    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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