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	United Arab Emirates		Info-Prod Country Guide
JUDICIARY   BUSINESS FORMS & STRUCTURES   CURRENCY & BANKING   INTELECTUAL PROPERTY TAXATION   INVESTMENT & TRADE   PUBLIC PROCURMENT   ENVIRONMENTAL LAW

Taxation Income Tax The UAE does not have any enforced federal income tax legislation for general business. An income tax decree has been enacted by each Emirate, but in practice, the enforcement of these decrees is restricted to foreign banks and to oil companies. This practice is not likely to change in the near future as the relevant mechanisms with which to implement the tax decrees have not yet been established. The decrees indicate, however, that if taxation were enforced, taxes could be imposed retroactively. Foreign banks are taxed at 20 percent of their taxable income in the Emirates of Abu-Dhabi, Dubai and Sharjah. The tax is restricted to the taxable income which is earned or deemed to be earned in that particular Emirate. Oil Companies (which include any chargeable person that deals in oil or right to oil both off-shore and on-shore) pay a flat rate of 55 percent on their taxable income in Dubai and 50 percent in the other Emirates. In addition, they pay royalties on production. Personal incomes, including all forms of salary and capital gains wherever arising, are not subject to taxation in any of the Emirates. Customs Duty Under the terms of an agreement on customs tariffs with countries of the GCC, all Emirates are bound to levy a minimum customs duty of 10 percent on luxury goods and 4 percent on the C.I.F. value of all other goods imported, excluding certain items such as alcohol and cigarettes. Recently, the federal government has approved a tobacco tax rate of 50 percent. In practice, however, exemptions are made for a wide range of goods. In cases where customs duties are charged, it is generally restricted to 1 percent. Other Local Taxes Municipal taxes are levied in most Emirates on annual rental paid at 5 percent for residential premises and 10 percent for commercial premises. Other local taxes include a 5 percent tax on hotel services and entertainment. Previous Chapter Contents Menu Next Chapter

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