Dubai is known for the benefits it provides to the corporate world. Not only has this and other cities in the UAE allowed businesses to grow with the help of modern technology and communication services, the UAE government has also drawn up rules and regulations which make it easier and profitable for the businesses to operate.
One such ease is related to the tax laws of the UAE. In many areas companies have been allowed to operate tax free. Taxes add up to form a major chunk in any company’s costs all around the world but this is not always the case in the UAE. This factor has played a major role in promoting business in the UAE.
Business Registration Dubai is a consultancy which works with individuals and companies who look to start business operations in Dubai. Their knowledge regarding tax laws and regulations is second to none and their experience allows business registration to become easy. Other services that the consultancy offers are business support services that allow operations to become smoother for your business setup in UAE.
The structure of taxes
The UAE government has not levied taxes on the wealth or income of companies. An exception to this rule is for the oil and gas companies and subsidiaries of foreign banks. However, a 10% tax on annual office rents and 5% on annual payment to employees is deducted and there is no exception to for any company. These two charges are deducted when a company gets its Trade license Dubai renewed.
Laws such as Abu Dhabi Income Tax Decree of 1965, Sharjah Income Tax Decree 1968, the Dubai Income ordinance and the Dubai Income Tax Degree state that companies that generally fall in the category of petrochemical and petroleum industries. Another category that these taxes apply to are the foreign bank branches. On income less than AED 1 million, no tax is deducted. However, on every next AED 1 million of income, a tax of additional 10% is levied. The maximum tax rate under these laws is 55% for incomes greater than AED 5.5 million.
Other laws allow municipalities of the UAE to deduct taxes and charges however, they do not account for too high a cost for the business.
For imports and exports
Under the G.C.C common customs law, imports that are headed towards the 37 free zones of the UAE are not taxed. However, a guarantee equivalent to tariff will be applicable on all imports to free zones which are re-exported to other parts of the world. This applies to goods with value of over AED 20 thousand. Tariff is levied on goods coming in to Mainland custom zones or Free trade zone for sale in the U.A.E or re-export to the G.C.C countries.
For exports, there are no taxes levied by the UAE government. This has promoted the trade license Dubai as export oriented companies try to take advantage of low cost exports. For those interested in business setup Dubai, must be sure that they are following all the laws and regulations relevant to their businesses.