Yes many don't realize that UAE has in practice introduced personal income tax
It's just hidden behind CIT
Possible workaround for new UAE Corporate Tax?
- Thread starter imtaku
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It's just hidden behind CIT
Haven't read much but what about capital gains? Dividends?
I mean: income is still tax free, and if you make $1m profit in a year, you pay 9%/90k on corporate, and then you can distribute the remaining amount at 0% to the personal. It's still better than many other options.
There are people saying UAE killed their biz model etc, but I think they made a quite calculated decision here.
Last edited: Aug 9, 2023
Good point, my reasoning was more regarding a flow corporate to personal but that make the taxable net even lower.
"The Corporate Tax Law fully exempts dividends derived from UAE entities, as well as dividends from foreign subsidiaries that qualify as a “Participation”. A Participation is a juridical person in which the UAE shareholder company owns a 5% or greater ownership interest (a “Participating Interest”) for at least 12 months, and that meets the conditions of the participation exemption regime."
Is it basically saying that dividends to a Dubai parent company from a foreign subsidiary are exempt as long as it owns more than 5% of the shares for a minimum period of 12 months before any distribution is made?
So it seems that IFZA Freezone company is a juridical person
So it seems that IFZA Freezone company is a juridical person
Correct.
I have already previously mentioned it in this thread. Salary and dividends are exempted, if any other income received even in personal bank account then it will be considered a business income and taxed at 9%.
It seems that Dubai has changed its clientele. It will offer zero tax to people who use it as a headquarters and send the money in as foreign dividends. You can pay out tax free salaries as long as they are arms length and invest the other remaining money in Dubai, or send it back overseas to the subsidiaries as loans or investment.
As long as you dont grow too big, more than say 5m USD per year, you can stay at zero tax.
As long as you dont grow too big, more than say 5m USD per year, you can stay at zero tax.
PE has also been clarified in detail, only Nexus will be clarified by the end of this month. The tax filing form will ask for all the bank accounts held by the resident (so as I have heard)
5m or 5% of the total as non-qualifying, whichever lower.
Any workaround or setup will cost your mental peace....You can not sleep well at night in Dubai....
@Konstanz
Can not agree more with you......unofficially person income tax is declared......Official announcement will be in some time...
And If you look into detail like IF I receive Interest or Dividend from any USA ETF.....It is already taxed in USA...(Yes Most incomes are taxable while living in dessert at personal level )
Only UAE based dividend and interest are not taxed.....(Who want to keep money in UAE bank account or want to invest in UAE company)
UAE is trap now. Ignore it
@Konstanz
Can not agree more with you......unofficially person income tax is declared......Official announcement will be in some time...
And If you look into detail like IF I receive Interest or Dividend from any USA ETF.....It is already taxed in USA...(Yes Most incomes are taxable while living in dessert at personal level )
Only UAE based dividend and interest are not taxed.....(Who want to keep money in UAE bank account or want to invest in UAE company)
UAE is trap now. Ignore it
Thank you for your personal opinion. I'm still not certain that Dubai or the entire UAE is dead or a trap as you call it.
Some people may still find it useful to have their business headquartered there because of tax reasons and IP rights or asset protection reasons. If you look through the entire discussion here you can see that with some tax knowledge you can easily (if you are a small business) navigate to some very low or even 0% taxes.
Maybe in the future there will be more changes in the UAE, but I believe more in major changes in the EU in the negative direction.
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Noted...
But you forget to mention ...Indirect tax which audit, accounting and as usual GOV fees....which same for small or big enterprise....USA LLC cost penny compare to UAE company.....Just move to territorial tax country i.e. Thailand.....
Time will tell...who is right and wrong ,,
meanwhile enjoy Dubai air
I don't enjoy the Dubai Air 😀 since I'm not living there. I don't say you are wrong nor do I say I'm right. What I say is that each business has it's own requirements and is individual. What not works for me, may work for you 😉
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True........Holding, wealth management etc companies are still tax free....For particular IT business, ecommerce , As of Now UAE is not worth headache....better solutions are in market
Lol. That must be the reason why no UAE resident keeps their money in UAE bank accounts.
Assets, don't need to be money!
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