Municipality Tax in Dubai
The UAE and Dubai, in particular, are known all over the world for their tax-free environment. You won’t have to pay neither corporate, nor income tax, as well as taxes on dividends and interest. While the majority of the taxes are absent, there are some minor ones that are still charged. Municipality tax or municipality fee is one of them.
What is Dubai municipality tax and who is eligible?
Dubai municipality tax refers to the housing fees charged by the Dubai Municipality, a government department responsible for public facilities. Municipality tax Dubai was introduced in 1962 for expatriate tenants. It is imposed on all non-citizen residents who rent apartment and is included into the bill for public utilities.
What is the rate of Dubai municipality tax?
The rate of Dubai municipality tax is 5% of the annual rent. If you possess your own property in Dubai, Municipality tax Dubai comprises 0.5% of the property purchase price. The overall amount of Dubai municipality tax is divided by 12 months and charged with the utility bull accordingly.
Dubai is not the only emirate that has a municipality tax. The same tax has been recently introduced in Abu Dhabi. Unlike Dubai municipality tax, which is 5% of the annual rent, municipality tax in Abu Dhabi comprises 3% and is also imposed on expats residing in the country.
It should also be noted that it is possible to get a refund on Municipality tax Dubai in case you are overcharged. It is necessary to file an objection to Dubai Electricity and Water Authority and send the bills for re-calculation and re-assessment. If after files verification the information about overcharging is confirmed, you will be able to get a refund on Dubai municipality tax.
Dubai municipality tax is also charged as a part of the Dubai hotel tax, so tourists have to pay it as well. A hotel tax is an amount of money travelers have to pay for every night of their stay at a hotel. Its rate depends on the rate of the hotel and it ranges from 7 to 20 dirhams per night.
Since Municipality tax Dubai on properties rent is included into your utility bill and comprises 5% of the annual rent, you won’t probably notice it. It is one of the minor taxes charged in the UAE known for its tax-free environment all over the globe.