According to many economists, the tax system in the United Arab Emirates is one of the most progressive in the world. It is convenient to do business here, you do not need to make deductions from wages and income. But are taxes in Dubai and other emirates of the UAE so convenient? To clarify this, it is necessary to study the economic system of the state in more detail.
Content
Taxation for tourists
The first thing that vacationers and independent travelers face is the tourist tax in Dubai when checking into a hotel. It can be included in the tour price or paid separately after check-out. The amount depends on the room class – 7-20 dirhams. Yes, compared to the total cost of the holiday, the costs are small, but they are there. This is the first example of hidden taxes in Dubai and other regions of the country. By the way, the amount is determined by each emirate separately. So, the highest tariffs are in Abu Dhabi, the lowest are in Fujairah and Ras al-Khaimah.
What else will tourists have to pay extra for:
- Collection in the measurement of 10% in restaurants, bars, cafes. It is included in the final check and is a separate item.
- Driving on toll roads. Here you need to pay 1-3 dirhams. An example is moving through the SALIK toll gate, when you need to pay 1 dirham.
- VAT rate, which is 5%. This is not a direct tax levy in Dubai, but it applies to most goods and services. Exclusion of passenger and cargo transportation, sale of land, banking services.
For tourists and independent travelers, the largest tax in Dubai and other emirates is accommodation fees. The exact amount will be called at the hotel reception, but after check-out. This can be known in advance. The ordinance will enter into force in March 2014. The official name is Tourism Dirham. Now it plans to be introduced in other regions of the UAE.
Taxes for individuals
In the initial analysis, the taxation system for individuals in the UAE is more than loyal. There are no taxes in Dubai on income, including for private business. There is no income tax, land or any other property. This allows you to control your income, save money. Another advantage is that there are no deductions for profit from deposits. As a result, the employee receives the full declared salary.
But you need to take into account the mandatory and voluntary costs:
- Health insurance. It is drawn up by the employer, but at the initiative of the employee. The exception is specialties with an increased risk to health. Expenses – up to 700 dirhams per year.
- Payment of VAT during the purchase of goods, services. It is not refundable to the buyer, so these charges can be attributed to hidden taxes in Dubai and other emirates.
- Rental of property. Its cost includes utility bills, expenses for maintaining the infrastructure of the building.
Permanent residents of the United Arab Emirates have the advantage of not having to pay tourist tax in Dubai for their stay. An exception is a non-resident of the country who decided to stay in a hotel or a hotel. Therefore, many people prefer to rent apartments for a short period of time, up to 2-3 days. This will eliminate additional costs.
Fees for Entrepreneurs
The tax system for entrepreneurial activity depends on the type of occupation. In the service sector for tourists, in agriculture, in the production of building materials, the rate is zero. But the formalization procedure includes the purchase of a license. The cost depends on the type of business activity, and can be up to 20 thousand dirhams per year. The advantage of such a system is that the amount of hidden tax in Dubai does not depend on income.
Features of fees for business in the UAE, depending on the areas of activity:
- Extraction and processing of oil, hydrocarbons. Here the highest tax rate is up to 80% of the profit. But it is formed individually for each company. In the future, participation in national projects is possible.
- Banking business. The mandatory rate in Adu Dhabi, Dubai is 20%. It is deducted from the operating profit of the branch or branch of the bank. depends on the tax laws of a particular emirate. So, in Fujairah it is 15%.
- Requirements for shops, supermarkets, shopping centers. The cost of goods and services must include VAT at a rate of 5%. The state controls prices, mandatory price reduction during seasonal sales.
Important: to open your own business in the UAE, you need to take into account not only tax fees in Dubai, but also a mandatory requirement – the official support of a local guarantor. This private or public organization draws up a document confirming a joint business activity.
Real estate: purchase, rent
Simplified property taxes in Dubai are a convenient way to invest for locals and visitors. Fees are paid only when buying and renting houses, apartments and villas. There are no further deductions. Those. after the acquisition, the owner does not have to pay annual fees. This simplifies the cost calculation. The exception is the obligatory tourist tax in Dubai for hotels and hotel complexes.
What you need to know about real estate taxation in the UAE:
- Purchase/sale of commercial or residential property. A one-time fee of 4% of the total cost is paid. This is necessary to re-register ownership in the public register. Half of the amount is paid by the seller, the second – by the buyer.
- Rent apartments, apartments, villas. Before each contract renewal, after 1 year, a 5% fee must be paid. 2/3 is the amount to pay the landlord, the rest – the tenant. For the latter, it is distributed evenly over the year and is included in the rental price.
- Rent of commercial real estate. For her, the tax in Dubai is higher – 10%. The principle of payment is the same as for the housing stock.
This system allows you to accurately calculate the cost of rent. Moreover, for the tenant, the amount is much less than for the owner of the property. Considering that there are almost no other taxes in Dubai for tourists and individuals, in this country you can save most of your earnings.
Visa processing
For tourists and independent travelers, you need to know the fees for issuing a tourist visa. This can be done at the airport upon arrival or at the UAE Embassy. Such expenses are not included in the official taxes in Dubai for tourists, but are mandatory. The cost of a tourist visa is $ 80. To obtain it, you need a passport, permission for children. The latter must also have their foreign passport.
The cost of obtaining a work resident visa is much higher. For Russians, it starts at $ 1,100. The price depends on the chosen profession, level of earnings, age and qualifications. However, taxes are not paid from this amount. In Dubai, intermediaries are engaged in registration, most of the price goes to the costs of generating documentation.