Tax Advice for Your Company in Dubai

Updated on Friday 08th July 2016

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As part of the seven emirates of the UAE, Dubai hasn't any imposed income tax legislation for resident companies, no matter if they are small or big businesses

However, regardless of the line of activity or the company size, businesses still must keep their accounts updated and structured by professional accountants for permanent accurate reports on their profitability and steadiness, as well as for a proper preparation when they need financing. 

A company that is registered in the UAE is considered resident if it can prove that:

1.    All the shares are owned by residents of the UAE or
2.    The entire or the majority of the company’s income comes from a trade or a business other than an investment company in the UAE and
3.    The total or most of the value of the company’s property is attributable to the property utilized in that particular trade or business.
 

General Taxation Information for Resident Companies in Dubai


We provide accounting services in Dubai for both small and large companies. Here are the main tax information that concern a resident company in Dubai:

•    taxable income:

There are no taxes on the income of companies, with the exception of oil and gas exploration and production businesses and branches of foreign banks.

The branches of foreign banks are generally taxed at a 20% fixed rate. Income tax decrees have been given out, however they are applied only to the income of oil and gas exploration and production companies, at flat rates of 50-55%. If you wish to find out more details on our tax advice for your company in Dubai, as well as the bookkeeping services we can provide for you in this safe haven, please get in touch with us. 

•    fiscal year:

The financial year is from January to December, with the exception for the first year of a company which will be calculated since the incorporation. 

•    dividends:

There is no taxation on dividends for companies in Dubai. Yet, it is recommended to consult an accountant in Dubai for further advice.

•    capital gains:

There is no taxation on capital gains in Dubai. Nevertheless, accounting services are needed for the preparation of financial statements for distribution to banks, government bodies and shareholders. 

•    real property tax:

A transfer fee is applied on the transfer of real property, according to the local jurisdiction.

•    social security:

The UAE doesn’t apply social security taxes for foreign workers. The employer’s contribution is 12.5% of the contribution calculation salary.
 
•    V.A.T.:

There is no V.A.T. in Dubai.

•    other taxes:

Other taxes include municipal taxes applied to some hotels, leisure services and real estate rentals. The yearly rental income of residential and commercial tenants is taxed with 5 and 10%.
 

Business Entities in Dubai


A crucial issue when opening a company in Dubai is choosing the right business entity. The choice of such an entity can vary depending on the location, objectives, your particular line of business, as well as other factors. The form of the company should be chosen keeping in mind the markets where it will operate – local or international. 

The types of business entities in Dubai (United Arab Emirates) are:

•    the limited liability company; 
•    the private/joint stock company;
•    the branch or representative office.

Foreign investors in general own maximum 49% of a Dubai registered company, although owning 100% of the entire business is possible in the free trade zones, the most popular one being the Dubai International Financial Centre (DIFC). Investors who open a company in Dubai therefore need accounting services and taxation consultancy. We can help, as we are a team of accountants with expertise in tax advice for your business in Dubai, being able to provide you with personalized accounting services when you decide to open a business in the UAE.

We are accountants in Dubai committed to assisting you in an efficient manner with accounting services for your business in this safe haven, finding the most proficient methods so that you save as much as possible from your company’s income. Please contact us if you need more detailed and personalized tax advice for your company in Dubai.

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