No one likes to pay taxes, and why would they especially when a person earns money with so much hard work? It is like giving a significant amount of money to the government just because you earn it. It does sound a little bit harsh, isn’t it? Sometimes we all wonder how life would have been if there was no tax system. But at the end of the day, harsh reality will hit you with full force and you will be back to square one. However, what if we tell you that it is possible to do so? Now, you must think that we’re lying to you. But no, this all is absolute truth, Dubai City does not have any direct tax policy. This piece of information might come off as a shock to you but it is the truth.
You should take a look at the below content to gain more information about the tax system.
Value Added Tax (VAT)
This is a common tax system you must’ve heard about it in different cities. Under this taxation system, the taxes collected by the government are known as indirect taxes. The UAE government has never been a fan of collecting large amounts of from the residents in the name of direct taxes. Therefore, in the year 2018, the introduction of the VAT system took place. However, tax policy is still not applicable to everyone. The points presented below will tell you the eligibility and criteria:
- A business entity should go for the mandatory registration process if the turnover of their company increases from AWD 375,000.
- It is not necessary for the users to get their business if they have an annual turnover of over 185,000. It is a voluntary decision to get done with the registration.
How to get registered under VAT?
If the annual turnover in the past 12 months goes below the voluntary limit of the registration, then you can go and apply for de-registration from the official portal. And if you fail to submit the form then you will have to pay a hefty penalty of AED 10,000.
Zero Rated Items under VAT?
There are a few items that are rated as 0% under the Dubai Tax system. Here is the list of those items:
- Exports of goods and services to outside the GCC
- International transportation, and related supplies
- Supplies of certain sea, air, and land means of transportation (such as aircraft and ships)
- Certain investment-grade precious metals (e.g. gold, silver, of 99% purity)
- Newly constructed residential properties, that are supplied for the first time within 3 years of their construction
- Supply of certain education services, and supply relevant goods and services
- Supply of certain Healthcare services, and supply of relevant goods and services
Who is exempt from the Federal Corporate Taxes?
Below is the list of institutions that are exempted from the corporate taxes of the federal system:
- Government entities
- Government controlled entities
- Persons engaged in an extractive business
- Persons engaged in a non-extractive natural resource business
- Qualifying public benefit entities
- Qualifying investment funds
- Public pension or social security funds, or a private pension or social security funds that is subject to regulatory oversight of the competent authority in the state
- Juridical persons incorporated in the state that are wholly owned and controlled by certain exempt persons; and
- Earning in Personal Capacity
- Freelance Professionals (Subject to Annual Income)
- Natural Resource Extraction
- Any other persons as may be determined in a decision issued by the cabinet at the suggestion of the minister.
Entities that manage investment funds, public pensions, and social security funds are exempted from corporate tax subject to conditions.
Dubai Property Investment
Since you do not have to pay any taxes to the government, saving money is much more easy. The ideal way to use that money will be by investing it in the Greenville at Emaar South. These apartments are considered the most luxurious apartment to ever exist in the country. Everyone needs a better lifestyle and if you can have this, then why settle for less?