As a rich source of oil, Dubai is not only the financial center of the Middle East, but also a global financial center connecting Asia, Africa and Europe. It has a well-developed logistics and trade industry, and is the international trade layout point for the world's major powers. So, what is the tax system of such a rich and prosperous city? Now let's decipher Dubai - a nearly "zero tax" tycoon paradise.

What are the taxes in Dubai?

Dubai as the world's famous "tax-free capital", its tax system is very simple, there is no personal income tax, capital gains tax, inheritance tax, property tax and other taxes, only need to pay seven kinds of taxes.

1. Corporate Income Tax

The UAE Ministry of Finance (MOF) has established a three-tier tax policy:

Tier 1: 0% tax rate

0% tax if the company's annual net profit is less than Dh375,000.

Tier 2: 9% tax rate

The government levies a 9% tax rate on companies with annual net profits above Dh375,000.

Tier 3: Different tax rates

Large multinational companies may implement higher tax rates.

2. Tourist Facility Taxes and Fees

The following taxes and fees are usually included when foreigners spend money on tourism in the UAE:

● Hotel Tax - 10%; ● Service Charge - 10%; ● Hotel Tax - 10%; and

● Service charge - 10%.

● Municipal tax - 0-10%; ● Municipal tax - 0-10%; ● Municipal tax - 0-10%.

● City tax - 6-10%.

● Tourist fees - 6%;

3. Customs duties

For most goods in Dubai, the basic rate of duty is 5%, with relatively higher duties levied on alcoholic products (50% rate) and tobacco products (100% rate).

4.Excise tax

The UAE has implemented an excise tax since 2017, levied on goods that the government deems harmful to human health or the environment. For example, all items listed in the GCC Common Customs Tariff Schedule 24, such as tobacco, are subject to a 100% tax rate;

5. Value Added Tax (VAT)

The UAE introduced Value Added Tax (VAT) in 2018 at a rate of 5%, which is an excise tax that applies to most goods and services. However, individual categories are exempt such as real estate in Dubai, restaurants, retail stores, construction companies, hotels, car dealerships, etc.

6. Lease Rent Tax

In Dubai, tenants are liable for 5% rental tax on leases while commercial tenants are liable for 10% rental tax.

7. Property Transfer Tax

There is no stamp duty or property tax on the purchase of property in the UAE, but there is a corresponding tax on the transfer of property. The property transfer tax in Dubai is 4%, i.e. if you buy a house in Dubai, you have to pay 4% of the price of the house to the Dubai Land Department (DLD), which is usually paid by the buyer.

Overall, as the "Switzerland of the Middle East", Dubai's FTZ tax is neither corporate income tax nor personal income tax in terms of corporate investment, which is why more and more HNWIs are beginning to look at Dubai as a new investment destination. In terms of real estate investment, Dubai real estate is also very advantageous, only 4% of the Land Office registration fee, no property tax, inheritance tax, stamp duty and other taxes, but also to get the identity by the way. If you have a plan for overseas asset allocation, don't miss out on Dubai, a low-tax option for high net worth clients.