United Arab Emirates

United Arab Emirates

Thinking beyond borders

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There are currently no personal taxes applicable on individuals in the UAE.

Key message

Please note that social security contributions are applicable in the UAE only for UAE nationals. If UAE nationals are employed, then both the employer and the employee will be required to make social security contributions. Neither the employer of an expatriate nor the expatriate employee are required to make any social security contributions in the UAE.

Income tax

There are currently no personal taxes applicable in the UAE.

Social security

Liability to social security

Social security contributions are applicable in the UAE only for UAE nationals. If UAE nationals are employed, then both the employer and the employee will be required to make social security contributions to the General Pension and Social Security Authority (GPSSA). A payment of 12.5 percent by the employer (15 percent if the employer is a public entity) and 5 percent by the employee are due for UAE nationals to the GPSSA.

The employers of an expatriate or an expatriate employee are not required to make any social security contributions in the UAE.

Compliance obligations

Employee compliance obligations

There are no employee compliance obligations in regards to taxes and social security in the UAE.

Employer reporting and withholding requirements

There are no employer reporting and withholding requirements in the UAE.

Immigration

Work permit/visa requirements

Employment visas are issued by the immigration of the relevant emirate. In general, a business can recruit either expatriate or local staff, subject to certain requirements. Employers must apply to free trade zone authorities for visas for individual members of staff, working in companies operating in free trade zones. Similarly, for companies operating in mainland UAE, the visa is issued by immigration of the relevant emriate.

Other issues

Double taxation treaties

The UAE has a wide network of tax treaties, with over 75 treaties signed and in force at this time, with several others in the pipeline.

However, the applicability of the respective tax treaties in the counter jurisdiction lies with the interpretation of the respective tax authorities if they view the UAE as a no-tax or a low-tax jurisdiction. 

Permanent establishment implications

As corporate taxes are currently enforced on foreign oil companies engaged in the exploration and production of oil, and branches of foreign banks, the creation of a permanent establishment in the UAE and its related implications would be purely academic from a UAE tax perspective. 

Indirect taxes

There are currently no indirect taxes applicable in the UAE, other than customs duty. A majority of the goods imported into the Gulf Cooperation Council (GCC) states attract a uniform customs duty of 5 percent, and this is levied at the point of first entry into the GCC. Further movements of goods within the GCC are free of customs duties.

Please note that the GCC countries are actively considering the introduction of a value-added tax (VAT) regime in the near future. 

The UAE, in conjunction with the other GCC states is now actively considering the introduction of a VAT regime. However, there is no information in public domain on when VAT will be introduced in the UAE.

Transfer pricing

There are currently no transfer pricing rules applicable in the UAE.

Local data privacy requirements

There are no data privacy laws in the UAE.

Exchange control

There are no exchange controls in force in the UAE.

Nondeductible costs for assignees

There are no nondeductible costs for assignees in the UAE.

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