Taxes for Employees in Dubai, the UAE

In recent decades, the UAE and Dubai, in particular, have turned into the real financial hub of the Middle East, center of innovation, an important investment direction and a perfect place for the launch of a new company. Why do so many people choose the UAE as the country to work and reside in?

First of all, expats are attracted by one of the most diversified economies of the world, constant sustainable economical growth of the state, the government’s attitude to innovation and technology and lenient taxation system of the country. Besides, the UAE and Dubai, in particular, allow expats to enjoy beautiful landscape, vibrant cultural and social life, high quality service, great healthcare system and educational facilities.

Rules regulating working in UAE and related tax vary depending on the emirate. If you are thinking about moving to Dubai, the conditions of tax on your income when working in Dubai must be of great interest to you. However, the first thing you have to know is that you’ll need a work permit, an Emirates ID card and a residence visa if you are interested in the working in UAE tax free environment. In order to be eligible for a residence visa, your employer needs to apply for your visa.

As soon as you get a residence visa, you can start working under the regulations of the UAE tax system. The leniency of the taxation system of the UAE is one of the biggest attractions for expats. The good news for everyone willing to work in the United Arab Emirates is that the UAE imposes no tax on income.

In comparison with majority of other countries where there are hefty taxes on your salary and other income, Dubai offers tax-free environment for salaried persons means what you earn – you get.

The UAE has signed numerous double taxation avoidance agreements with a number of countries. If the place of your permanent residence is on the list, this means that as a person working in Dubai or any other emirate of the UAE you won’t be charged taxes on your salary by the government of the country of your origin.

If you are a US citizen working in Dubai, please, note that no double taxation treatment has been signed between the US and the UAE, but there have been extensive discussion concerning it. Normally there is no income tax in Dubai for people working in Dubai tax. But as a US citizen you’ll have to annually file reports and pay tax on worldwide income directly to the Internal Revenue Service, the revenue service of the United States of America.

In terms of other citizens and their liability on tax on salary in their home country – when moving to Dubai for working here or receiving your salaried income from Dubai, you need to consult with your local tax advisor on your possible tax liabilities in your home country.