Personal income tax in Dubai:<\/h2>\n
Personal income tax does not exist in the UAE, so 0%. I would definitely like to add other personal income to this. For example, wages, dividends, capital gains and rental income or capital gains from real estate are also exempt from taxation. In short, the tax on individuals is 0%. Compared to the Hungarian tax system, the United Arab Emirates is a home of favourable tax opportunities. To a European eye, it is perhaps unthinkable that an employee, investor or business owner should not have to pay tax.<\/p>\n
![\"dubai](\"https:\/\/orderoffshore.com\/wp-content\/uploads\/2023\/09\/378831867_164658453345662_334222286858270968_n.jpg\")
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Dubai corporate tax - Corporate tax 2024<\/h2>\n
The introduction of the corporate tax in the United Arab Emirates was introduced by the new Federal Law No. 47\/2022, published on 3 October 2022, which was unprecedented in the country.It was introduced in June 2023, so all entities registered in the United Arab Emirates must comply with the newly enacted regulations from the next financial year, usually 1 January 2024.<\/span><\/p>\n The aim of taxation is to maintain the country's development and transformation, to remain the world's leading financial centre and to comply with the regulations dictated by the OECD.<\/span><\/p>\n It is important to know that this regulation does not affect the general sales tax<\/a> (VAT), which was introduced on 1 January 2018 at the rate of 5%.This VAT of 5% applies only to services and goods sold in domestic and non-free trade zones.<\/span><\/p>\n In the United Arab Emirates, the corporate tax rate is progressive, with the rate of profit determining the rate of tax on profits. There are 3 categories:<\/span><\/p>\n Companies with a turnover of less than AED 3,000,000 will be exempt from paying the tax until the end of 2026. This is more than 763,000 Eur or 292 million HUF at the current exchange rate. Under the current rules, since these companies will be exempt from paying tax until the end of 2026, any part of this amount can be profit.<\/span><\/p>\n A company registered in the United Arab Emirates has a turnover of AED 5M (\u20ac1.28M) and a profit of AED 750,000 (\u20ac190,000) in 2024. In this case, as the company exceeded the AED 3,000,000 limit, it is liable to pay corporate tax. The tax rate is AED 0% up to a profit of AED 375,000 and AED 9% for the part above that. Thus, half of the company's profit is exempt from tax and the other half is subject to corporate tax at AED 9%, so that it will be liable to pay corporate tax of AED 33,750 (\u20ac8,600). The total profit is 4.5%.<\/span><\/p>\n Annual revenue of the company: 2.800.000 AED (715.000\u20ac)<\/span><\/p>\n Company profit: AED 2.600.000 (\u20ac663.000)<\/span><\/p>\n Tax payable: 0%, AED 0<\/span><\/p>\n As the company will be exempt from tax until the end of the financial year 2026 for revenues below AED 3,000,000.<\/span><\/p>\n From a tax perspective, it is currently the same for an offshore company registered in Dubai, a free zone company or even a mainland local company, but low corporate tax is mandatory.<\/p>\n Basically, a company can account for its operating expenses and purchases. However, there are some areas where special rules are imposed, in my personal opinion quite understandably:<\/span><\/p>\n The Ministry of Finance has identified additional sectors that are exempt from corporate tax in the United Arab Emirates:<\/span><\/p>\n The UAE has a number of free trade zones. In some of them, not only is it possible to set up a company in a free zone, but an owner can also set up an offshore company. Offshore companies are not allowed to carry out their activities in the UAE, in the same way as offshore companies registered in other countries are subject to the main condition that they cannot carry out their activities in the country of registration. In business, it is quite common for a company to outsource its activities to another low-tax country. But in this case, the company must register for corporate tax with the Federal Tax Authority in the same way as any other company, with proper financial records and annual tax returns. The owner and its employees are not eligible for residence permits and other business visas. It is also very difficult to open a local bank account.<\/p>\n For information on setting up a company in Dubai and related information, see our previous article on this topic. However, as a Freezone company and a Mainland company are lumped together for corporate tax purposes, there are still important differences between companies set up in the Free Trade Zone and local companies. Freezone companies can only carry out certain activities, usually b2b, while local companies can obtain a licence to operate on a wider scale. A freezone firm may provide a limited number of visa opportunities for the owner or employee, while for a local firm these opportunities increase in proportion to the growth of the business. A free zone company can invoice VAT-free in a free trade zone and abroad. The ins and outs of setting up a company in Dubai here<\/a> read more.<\/p>\n Many people were scared by the expected introduction of corporation tax. They were worried that their companies, which had been set up in the past, had lost their main advantage, in addition to promises to preserve the tax exemption. In my view, this is a viable tax policy and Dubai will continue to be a great place for tax optimisation. Tax optimisation today will not necessarily be about 0 tax, but really about optimisation. However, setting up a company in Dubai is the easiest way to obtain a residence permit in the United Arab Emirates<\/a>, until 2026, the corporate tax 0% for our customers 98%. Dubai taxation will hopefully be synonymous with non-taxation for a long time to come.<\/span><\/p>\n I am at your disposal for Dubai taxation issues, feel free to contact me. If you have set up your company elsewhere but need help, you are also welcome to contact me.<\/span><\/p>\nUnited Arab Emirates corporate tax rate:<\/h3>\n
![\"Dubai](\"https:\/\/orderoffshore.com\/wp-content\/uploads\/2023\/09\/percent-9-300x225.jpg\")
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![\"transmitter](\"https:\/\/orderoffshore.com\/wp-content\/uploads\/2023\/09\/0-1-300x82.png\")
<\/span><\/li>\n<\/ul>\nWhat should business owners do now?<\/span><\/h3>\n
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Important information:<\/span><\/h3>\n
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Example 1.<\/h3>\n
Example 2:<\/span><\/h3>\n
![\"Dubai](\"https:\/\/orderoffshore.com\/wp-content\/uploads\/2023\/09\/375191904_10224324855171381_197370188920600101_n-300x200.jpg\")
<\/p>\nCost accounting for corporation tax purposes:<\/span><\/h3>\n
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\n![\"The](\"https:\/\/orderoffshore.com\/wp-content\/uploads\/2023\/07\/Tax-Planning-300x200.jpg\")
<\/h3>\n<\/li>\n<\/ul>\nThe following entities are exempt from corporate tax:<\/h3>\n
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Dubai offshore company<\/h2>\n
![\"one](\"https:\/\/orderoffshore.com\/wp-content\/uploads\/2023\/09\/371095218_681831580637448_6145313417351060283_n-240x300.jpg\")
<\/p>\nFree Trade Zone and Mainland (local) company formation
![\"tax](\"https:\/\/orderoffshore.com\/wp-content\/uploads\/2023\/07\/712810db-c742-47f8-b1b5-f7c8999dc491.jpeg-300x200.jpg\")
<\/h2>\nSummary:<\/span><\/h2>\n