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The business of… Tax in the GCC
From corporate income tax in Saudi Arabia to social security tax in Kuwait, Kipp takes a look at how the citizens of the Gulf are taxed.
September 9, 2010 2:17 by kippreport
UNITED ARAB EMIRATES
CORPORATE INCOME TAX
- The UAE does not impose a federal corporate income tax, but some emirates have issued their own decrees. In practice, taxes are only enforced on foreign oil companies and banks.
- The tax rate for oil companies is generally 55 percent of operating profits, but the actual tax amount is based on a rate agreed in individual concessions. The rate can range between 55-85 percent.
- Branches of foreign banks are taxed at 20 percent of their income.
- Most emirates impose municipal taxes on annual rental payments. The municipality tax rates are 5 percent of residential rent and 10 percent of commercial rent.
- In Dubai, a 10 percent tax is applied on hotel revenues, a 10 percent fee on commercial property rents and a 5 percent fee on residential property rents.
- Abu Dhabi does not levy a municipality tax on rented premises, but landlords are required to pay certain annual license fees.
PRIVATE INCOME TAX
- Income tax is not imposed on individuals.
CAPITAL GAINS TAX
- Capital gains tax is not imposed on individuals.
LAND REGISTRATION FEES
- A fee is levied on a transfer of ownership of land in Dubai at a 2 percent of the sale value of the property.
- There is no VAT levied in the UAE, although its introduction has been discussed several times in the past.
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