BSA Ahmad Bin Hezeem & Associates

Tax regime in the United Arab Emirates

Tax regime in the United Arab Emirates

June, 2013

Michael Kortbawi of Bin Shabib & Associates discusses the Tax regime in the UAE.

There are no federal tax legislation in the United Arab Emirates (hereinafter referred UAE). However, we find the following emirates: Abu Dhabi, Dubai and Sharjah, legislation establishing a tax system generally companies, including:

• The tax on income Decree of Abu Dhabi in 1995;
• The tax decree on the Sharjah income in 1968;
• The tax decree on Dubai’s income in 1969.

Despite the above decrees, there is no imposition of taxes in the UAE with the exception of the following:

• Taxes on oil and gas companies at rates specified in terms of the relevant concession agreements;
• Flat rate on annual profits of foreign bank branches; and
• Service flat tax on hotel services.

Double tax treaties

Double taxation treaties UAE (hereinafter referred TDT) aimed at providing tax privileges to individuals and companies from other taxable jurisdictions.

They are in place to mitigate potential tax burdens on foreign companies and individuals operating in the UAE and pay their profits abroad or vice versa.

While corporate income taxes are not currently taxed in the UAE, the TDT does not require payment of such a tax in the UAE so that citizens are eligible for benefits under the respective treaties.

• The UAE has the TDT with:
• Africa (Algeria, Egypt, Morocco, Sudan, Tunisia, Mozambique);
• Asia, (China India, Indonesia, Japan, Malaysia, Mongolia, Pakistan, Philippines, Singapore, South Korea, Sri Lanka, Thailand, Turkmenistan, Armenia, Azerbaijan, Uzbekistan);
• Europe (Belgium, Bosnia, Finland, France, Belgium, Bosnia, Germany, Italy, Malta, Netherlands, Poland, Romania, Spain, Switzerland, Greece, the Netherlands, Belarus Turkey, Bulgaria, Ukraine, Austria, Czech, Luxembourg);
• The Middle East (Jordan, Kuwait, Lebanon, Syria, Yemen);
• North America (Canada);
• Australia (New Zealand).

Tax Certificate UAE

A tax residence certificate is a certificate issued by the Ministry UAE to enjoy the TDT signed between the UAE and other countries. The requirements for obtaining a tax residence certificate are:


• Copy of a valid trade license (valid for more than one year);
• Copy of a valid lease agreement;
• Copy of passport and residence visa Manager / Director;
• Application letter of request;
• Bank statement for the last 6 months;
• 5000 Dirham fee; and

Audited financial accounts or account statements for the final year of a bank in the UAE.

• Copy of a valid passport and visa copy of residence;
• Application letter of request;
• Bank statement for the last 6 months;
• Source of income;
• Certificate indicating individual promoter activity and source of income;
• 1000 Dirham fee.

A tax residence certificate may be given by the UAE than in relation to a national of a country with which a TDT is signed.

Published by Fusions & Acquisitions, to download the article in French CLICK HERE.

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