Tax Law in Dubai, Abu Dhabi, Sharjah, and other Emirates

UAE tax laws are one of the most lenient in the world. They attract businessmen and investors from all over the globe. The UAE offers entrepreneurs a number of undeniable advantages related to the launch and running a business. One of these unquestionable benefits is its tax-free environment.

There are about 40 free trade zones in the UAE. These are the territories that offer entrepreneurs and investors the best conditions for doing business. They are exempt of import and export tax, corporate tax and income tax. The only exception is oil and gas companies and branches of foreign banks – in their cases taxes are charged.

Dubai Tax Laws

Dubai is home to more than 20 free trade zones. It is not only a popular tourist destination but also a perfect place for a business start-up. Why do so many people choose Dubai as a place for launching a company? One of the reasons is Dubai’s tax advantages and Dubai tax law. First of all, Dubai does not impose income tax on individuals or companies. According to the tax laws in Dubai, foreign oil or gas production companies and subsidiaries of foreign banks are expected to pay corporate tax. However, all other businesses are exempt from it – neither corporate, nor income taxes are imposed.

As for Abu Dhabi, Sharjah and other Emirates, the same UAE tax laws apply here. Foreign banks are subject to tax rates of 20% in Dubai, Abu Dhabi, and Sharjah. As far as the corporate tax is concerned, tax laws on it vary depending on the emirate. However, free trade zones of the UAE impose neither corporate, nor income tax.

One important thing you have to be on the watch for when planning the launch of the company in the UAE is double taxation. Even if you do business in the UAE under the state jurisdiction and UAE tax laws, this does not mean that you are not subject to paying taxes in the country of your permanent residence. Luckily, the UAE has signed double taxation avoidance agreements with the majority of the countries of the world, including many European, Latin American, Arab and Asian states. This means that you won’t be charged taxes twice and you won’t have to pay them to two different governments.

The UAE tax laws provide facilitating, tax-free environment for entrepreneurs. Tax laws in Dubai, Abu Dhabi, and Sharjah guarantee the ease of doing business within the state turning the UAE into one of the most attractive directions for launching start-ups and investment.