For several years now, you have been considering
launching a business abroad, in a country with advantageous tax treaties. The United Arab Emirates seem to you to be the ideal location for developing your company under optimal conditions, but so far, you have not taken the plunge because you fear that the benefits offered in Dubai may not be as attractive once you are there.
First of all, it is important to take the time to learn about
the tax benefits in Dubai as well as the
tax treaties in force. This is still the best way to decide whether or not the United Arab Emirates are a good choice for establishing and developing your company.
Dubai: a favorable tax system
If many entrepreneurs decide to launch their
business in Dubai, it is not by chance. Indeed, the tax benefits are particularly attractive:
- There is a very low corporate income tax rate (CIT 9%)
- There is also no withholding tax on distributed dividends
- There are no social security contributions in the United Arab Emirates
Please note that, since January 1, 2018,
VAT has been applied in the United Arab Emirates, whereas this was not the case before. The applicable rates are 0% or 5%, depending on the products concerned.
Your company is subject to VAT in the following cases:
- Your turnover for the last 12 months or the next 30 days exceeds AED 375,000. In this specific case, VAT registration is mandatory.
- However, it is optional if your turnover (for the last 12 months or the next 30 days) is between AED 187,500 and AED 375,000.
Companies whose activities are concentrated outside the United Arab Emirates and outside the GCC are not subject to VAT. The same applies to certain specific sectors, such as healthcare, oil, real estate, and education.
What is a tax treaty?
A
tax treaty is an agreement signed between two states. It establishes their tax relations. This is a very important document because, when there is no tax treaty signed between two countries, the taxpayer may be taxed twice. In the UAE, there is indeed a France-UAE tax treaty signed in 2008 and entered into force in 2010.
Regardless of the nature of the
international tax treaty, it necessarily concerns:
- Individuals and legal entities
- A defined period of application
Of course, not all international tax treaties are the same. Indeed, the terms of application are not always identical. If a tax treaty has been signed between the United Arab Emirates and your main country of residence, we therefore recommend that you learn more about it to ensure that you fall within the scope of
double tax relief. Our firm can of course provide you with information on this matter: contact us without delay to learn more about the France-UAE tax treaty.
Which countries are covered by the double tax treaty?
The United Arab Emirates have signed a large number of
tax treaties with other countries. Here is the list of countries that are not subject to double taxation: Algeria, Germany, Armenia, Austria, Azerbaijan, Belgium, Belarus, Bosnia and Herzegovina, Bulgaria, Canada, China, Cyprus, South Korea, Egypt, Spain, Estonia, Finland, France, Georgia, Hungary, Mauritius, India, Indonesia, Italy, Kazakhstan, Latvia, Lebanon, Lithuania, Luxembourg, Malaysia, Malta, Morocco, Mexico, Mongolia, Montenegro, Mozambique, New Zealand, Pakistan, Panama, the Netherlands, the Philippines, Poland, Portugal, the Czech Republic, Romania, Russia, Serbia, Seychelles, Singapore, Slovenia, Sudan, Sri Lanka, Syria, Tajikistan, Thailand, Tunisia, Turkmenistan, Turkey, Ukraine, Venezuela, and Yemen.
