Traditionally, the United Arab Emirates is perceived as a tax-free jurisdiction, as the income of individual residents in the country is not taxed, and the burden on business is absent or minimal. Knowledge of legal requirements for doing business in the UAE can help businesses to get maximum benefits within the country.
Some tax benefits in the UAE include:
- Several business activities are exempt from VAT;
- 0% corporate tax for ‘Qualifying Free Zone Persons’;
- Small business relief (nontaxable threshold of AED 3,000,000);
- Participation exemption for holding companies;
- Participation in Tax Groups;
- Transfer of tax losses;
- Restructuring benefits;
- No withholding tax on payments to foreign individuals and companies, regardless of the type of income, etc.
However, like any country, the UAE has its own laws and requirements for doing business, including tax obligations.