Tax in UAE

Different Categories of Tax in UAE

Tax in UAE : Due to its 0% personal income tax, a multitude of business permits and operations permitted in the free zones, and cheap import tariffs, the United Arab Emirates (UAE) has been one of the most appealing destinations for budding companies, mid-sized firms, and major corporations.

The UAE government has always strived to make the country’s tax environment as attractive and reasonable as possible.

Over the years, the United Arab Emirates has produced a variety of tax categories.

Corporate Tax in UAE

For the fiscal year beginning on or after June 1, 2023, the United Arab Emirates has decided to impose a corporate tax on business profits. The proposed UAE corporate tax rates are as follows:

 There is no tax on taxable income up to AED375,000

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There is no tax on taxable income up to AED375,000

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Non Taxable Income & Exemptions

Businesses that engage in commercial activities and the exploitation of natural resources
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On domestic and cross-border payments, there will be no withholding taxes.

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Individuals who own shares or other assets in their own name and get dividends, capital gains, or other forms of income.

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Individuals who have bank accounts or savings plans earn interest and other income.

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An individual’s earnings are determined by their salary or employment income.

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Dividends and capital gains are generated by qualifying shareholdings in a UAE firm.

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Intra-group transfers and reorganizations that qualify

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Individuals who do not require a company license or license to invest in real estate in the UAE can do so in their personal capacity.

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Value Added Tax (VAT)

Indirect taxes, such as the Value Added Tax (VAT), which was established on January 1, 2018, are collected on the purchase and sale of goods and services.

In order to minimize the nation’s reliance on oil and petroleum products for funding, the UAE government has decided to impose VAT on a variety of items, with a 5% rate.

Zero rated supplies include:

  •  Medical Supplies and Equipment
  •  Trading in gold, silver, and platinum
  •  Natural Gases and Crude Oil
  •  Residential sold for the first time.
  •  Healthcare
  •  Exports, as well as international transportation
  •  Education

Exempt supplies include:

  •  The provision of certain financial services as defined under VAT legislation
  •  Residential real estate
  •  Vacant land
  •  Passenger service in the local area
Excise Tax

Excise tax is a type of indirect tax levied on things that are often damaging to people or the environment. The following items must be categorized as excise commodities: 

  • Tobacco-based items
  •  Carbonated drinks excluding unflavored aerated water
  •  Electronic smoking devices and equipment
  •  Drinks that have been sweetened.
  •  An energy drink is any beverage that is promoted or sold as such and includes stimulator ingredients that provide mental and physical stimulation.

Useful Links : UAE Tax Authority, Dubai VAT

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