With the objective of establishing a simplified and robust taxation regime in the United Arab Emirates, a value added tax (VAT) with a rate currently set at 0% will be applied to certain types of income earned in the UAE by non-residents, provided that such income is not attributed to a permanent establishment of the non-resident in the country. The applicable tax rate, as well as the specific categories of income subject to the tax, will be determined by a decision of the Council of Ministers.

Since the VAT rate is currently 0%, there is no obligation to register or submit tax returns for these revenues.

Tax Withholding Credits (WHT)

Under the Corporate Taxation Act, a credit is established for value added tax (VAT) borne by a taxable person, with the objective of reducing the amount of VAT payable. This tax withholding credit is limited to the lower of the following amounts: the amount of WHT deducted by the taxable person in accordance with the UAE TC Act or the TC due under this law.

If the amount of the credit exceeds the amount of tax due, the excess will be reimbursed to the taxable person.

Network of Tax Agreements

Individuals and legal entities resident in the United Arab Emirates (UAE) benefit from an extensive and growing network of agreements to avoid double taxation (DTT). These agreements allow the application of tax breaks in partner countries, facilitating international tax management. The list of agreements currently in force is detailed below. In addition, other agreements that will expand this network are in various stages of negotiation and ratification.