Short Tax Guide of Dubai and Rest of the UAE

The United Arab Emirates are the country with zero tax rates in almost all areas of business and life. Both residents and non-residents of the UAE are exempt from income and corporate tax, tax on interest and dividends and withholding tax. Moreover, there are about 40 free trade zones on the territory of the UAE where the system of taxation is even more lenient – there is no import and export tax. This makes the UAE particularly attractive for investors and entrepreneurs from all over the world. Below is our short tax guide on the taxes in Dubai and the UAE.

UAE Tax Guide – Useful Info

January 2018 was marked with certain changes in the tax legislation of Dubai, the UAE. The countries of the Gulf Cooperation have taken a common decision to introduce the VAT tax comprising 5% of the product’s value. Although, the UAE authorities do not impose any taxes on the residents of the UAE, the following article is a UAE tax guide and contains useful information on some minor taxies levied within the state and Dubai, in particular.

If you’re planning to visit Dubai as a tourist or willing to stay here for permanent residence, you have to be aware of the Dubai city tax and service charge. The Dubai city tax and service charge also known as the “tourist dirham” is collected from the travelers staying at Dubai hotels. The Dubai city tax and service charge is included into the price of the room and is levied for every night of your stay. The rate of the Dubai city tax and service charge depends on the type and class of the hotel and varies from 7 to 20 dirhams per night.

Apart from the Dubai city tax and service charge, there is also the so-called “municipality fee” in the Dubai tax structure. It is a tax added to the utility bills paid by the residents and non-residents of the emirate. Dubai city tax and service charge is not the only tax you are expected to pay in Dubai as a visitor. There is also the Dubai departure tax which is included into the price of your airplane ticket and is a fee imposed on you for using one of the Dubai airports. Its rate is 35 dirhams.

The Dubai city tax and service charge was introduced by the authorities of the UAE in order to further diversify the economy of the emirate. The government bodies of the UAE think of the future and realize that the economy that relies on oil too heavily is doomed. Thus, it is necessary to strengthen it and find alternative sources of budget replenishment.

Whether you’d like to visit the UAE as a tourist or your ultimate goal is to do business here, this UAE tax guide will help you to learn more about some minor taxes existing in Dubai and the UAE. There is the Dubai city tax and service charge and some other tariffs you have to be aware of before visiting this place.