dubai is finish any alternative?

[csp dubai]

I think dubai eith corporate tax at 9% is finish , next step is income tax at 7% ( tha law is already in process by the government), tha bank system is just a fraud, if you have commercial accout
they will push you to buy metflife life insurance policy that will cost you 50% of the capital.
And worst of all you will have to make audit tax return , that will be incredible expesive , and do not dare to not pay taxes they will put you in jail for years

Anyone has a credible alternative?

Ps all the Dubai agents will tell i am exagerating but unfortunatly is not true

 

[A1988]

Where did you get information on 7% personal income tax is in process by the government? With the banks asking for information and stressing on tax residency it looks very likely. In my opinion, if you want to live in asia then malaysia or singapore has territorial taxation and middle east maybe you can consider bahrain for sometime, in europe its malta, cyprus and ireland.

 

[troubled soul]

Personal Tax is Dubai killer....Dubai will empty overnight...Without zero personal tax Nobody is going to live there in Monarchy Desert country.......CIT is only apply to Local income....Freezone still tax free for international Income......Overthinking leads to depression....Dubai GOV is smarter than people think they are.....Ruler knew why People coming to Dubai.....Hope this help...

A sleeping person can be woken up, but it is difficult to wake up those who pretend to be asleep.

 

[Konstanz]

I think dubai eith corporate tax at 9% is finish , next step is income tax at 7% ( tha law is already in process by the government), tha bank system is just a fraud, if you have commercial accout
they will push you to buy metflife life insurance policy that will cost you 50% of the capital.
And worst of all you will have to make audit tax return , that will be incredible expesive , and do not dare to not pay taxes they will put you in jail for years

Anyone has a credible alternative?

Ps all the Dubai agents will tell i am exagerating but unfortunatly is not true

Source about 7% income tax?

Personal Tax is Dubai killer....Dubai will empty overnight...Without zero personal tax Nobody is going to live there in Monarchy Desert country.......CIT is only apply to Local income....Freezone still tax free for international Income......Overthinking leads to depression....Dubai GOV is smarter than people think they are.....Ruler knew why People coming to Dubai.....Hope this help...

I think not, people who bought real estate can't just leave everything behind

 

[A1988]

Something is surely cooking because I was asked to prove my employment income by my bank even though I have an investor visa, never happened in the last 8 years

I mentioned in one of the earlier threads that I get a feeling they might introduce 5% personal income tax, the reason being due to pressure from various organizations and there is no point in having corporate tax and no personal income tax, it will not save them from being blacklisted.

 

[TheCryptoAnt]

at this point Im just gonna commit tax fraud and live in a mismanaged place permanently

 

[Alonzo]

next step is income tax at 7% ( tha law is already in process by the government)

Can you tell us how you got that info?

 

[Martin Everson]

Personal income tax in UAE? I think this is a terminological inexactitude I hope .

 

[madihrb]

Personal Tax is Dubai killer....Dubai will empty overnight...Without zero personal tax Nobody is going to live there in Monarchy Desert country.......CIT is only apply to Local income....Freezone still tax free for international Income......Overthinking leads to depression....Dubai GOV is smarter than people think they are.....Ruler knew why People coming to Dubai.....Hope this help...

Except Dubai does not call the shots, its Abu Dhabi who call the shots and they will not care if Dubai loose some investors. Dubai is in debts, last time 2008 crisis Dubai went almost bankrupt, it was Abu Dhabi who bailed out Dubai, in return iconic Burj Dubai was renamed to Burj Khalifa, Khalifa was the ruler of Abu Dhabi. It is matter of time Dubai will again on the verge of bankruptcy and Abu Dhabi will again bail out.

Now my thesis is, they have plans like that:

2018 - VAT was introduced
2023 - Corporate Tax is Introduced
2028 - Income Tax should be introduced

They are slowly introducing taxes to replace the oil company, so every 5 years they are doing it.


Golden Visa in 2019 was introduced, initially the requirement to get Golden Visa was to invest 10 million AED, now currently they have reduced it to 2 million AED. They will reduce it to further in coming years may be it will be 500k AED or 200k AED. Golden Visas are synonym to Permanent Residency, once Golden Visas are available to majority of people then they will be start giving citizenships to rich.

Golden Visas and Citizenships will make sure that people dont leave UAE and its not empty place. Now lets talk about maths, currently approx 80% to 90% GDP of UAE comes from Oil. Total oil exports of UAE is $150 billion. They introduced VAT in 2019 at 5%, last year UAE got $26 Billion from VAT alone. Think how much revenue they will get once they increase that VAT, they introduce the new taxes. It will be more than current $150 billion which they get from oil exports.

Now does all that scenarios suits UAE, I think yes, but for me it does not. My problem with UAE is that they dont think for small business man living a decent life. All their planning and rules are made like every one is running multi million business. So I personally think its inevitable that UAE will become EU or US or SG where there are lot of taxes so I will prefer to move somewhere else where I pay taxes but in return I get easy banking, rules that siut small businessman like myself, courts and democracy.

 

[A1988]

Except Dubai does not call the shots, its Abu Dhabi who call the shots and they will not care if Dubai loose some investors. Dubai is in debts, last time 2008 crisis Dubai went almost bankrupt, it was Abu Dhabi who bailed out Dubai, in return iconic Burj Dubai was renamed to Burj Khalifa, Khalifa was the ruler of Abu Dhabi. It is matter of time Dubai will again on the verge of bankruptcy and Abu Dhabi will again bail out.

Now my thesis is, they have plans like that:

2018 - VAT was introduced
2023 - Corporate Tax is Introduced
2028 - Income Tax should be introduced

They are slowly introducing taxes to replace the oil company, so every 5 years they are doing it.


Golden Visa in 2019 was introduced, initially the requirement to get Golden Visa was to invest 10 million AED, now currently they have reduced it to 2 million AED. They will reduce it to further in coming years may be it will be 500k AED or 200k AED. Golden Visas are synonym to Permanent Residency, once Golden Visas are available to majority of people then they will be start giving citizenships to rich.

Golden Visas and Citizenships will make sure that people dont leave UAE and its not empty place. Now lets talk about maths, currently approx 80% to 90% GDP of UAE comes from Oil. Total oil exports of UAE is $150 billion. They introduced VAT in 2019 at 5%, last year UAE got $26 Billion from VAT alone. Think how much revenue they will get once they increase that VAT, they introduce the new taxes. It will be more than current $150 billion which they get from oil exports.

Now does all that scenarios suits UAE, I think yes, but for me it does not. My problem with UAE is that they dont think for small business man living a decent life. All their planning and rules are made like every one is running multi million business. So I personally think its inevitable that UAE will become EU or US or SG where there are lot of taxes so I will prefer to move somewhere else where I pay taxes but in return I get easy banking, rules that siut small businessman like myself, courts and democracy.

You are totally correct and all your facts are totally accurate, I would just like to add a few things to your statement.

Dubai works on the strategy of 3 T's which are Track, trace and trap. They started with Vat when they wanted to track and trace corporates and then trapped them with corporate tax, I believe the track and trace for individuals is already beginning by banks asking for tax residency certificate, address with rental contract and employment income for investors and then one fine day you will be trapped by personal income tax.

As far as my personal situation, I just have a second residency there with no substantial economic activity at the moment, these moves by the UAE government have put a stamp of approval to my move to malta in the coming months.

 

[Forester]

Very interesting information...
@Fred, as a really deeply oriented person re: UAE, aren't you somewhere here?

 

[khinkali]

Personal Tax is Dubai killer.

Not if they do it wisely. If you run a hairdresser or cafe in Dubai, then you raise your prices by 7% and pay the income tax. Your competitors will need to raise prices by the same, just as with local corporate tax. The tax will be inflationary, which is basically what OECD seems to encourage.

But for UAE it's the basis that matters. "7% tax on locally sourced income" is irrelevant to you if your income is foreign sourced. I doubt I know any expats where I live who have even $1 per year of locally sourced income, it's all exempt. If they have any sense, UAE will do the same. 7% pay rise for local workers, 7% tax for local workers. 7% hit to inflation, but most expats make their money from overseas and don't really care.

 

[andrew28fl]

But for UAE it's the basis that matters. "7% tax on locally sourced income" is irrelevant to you if your income is foreign sourced.

Doesn't the Permanent Establishment rule basically make any foreign "active" enterprise a locally sourced income in UAE going forward?

https://www.eversheds-sutherland.co...porate_Tax_Regime_in_the_United_Arab_Emirates
(ii) a legal person incorporated or otherwise established or recognised in a foreign jurisdiction, which is effectively managed and controlled in the UAE;


For me the old Single Member LLC with personal residence in a no corporate tax country was the appeal of Dubai/UAE. Looks like that solution wouldn't work anymore.

 

[A1988]

Doesn't the Permanent Establishment rule basically make any foreign "active" enterprise a locally sourced income in UAE going forward?

https://www.eversheds-sutherland.co...porate_Tax_Regime_in_the_United_Arab_Emirates
(ii) a legal person incorporated or otherwise established or recognised in a foreign jurisdiction, which is effectively managed and controlled in the UAE;


For me the old Single Member LLC with personal residence in a no corporate tax country was the appeal of Dubai/UAE. Looks like that solution wouldn't work anymore.

Very well said and you shared very valid points, request you to write on one of the other threads where we are discussing the same issue regarding corporate tax in uae.

 

[Konstanz]

Many things will not be enforced in UAE most of the time. Such as this PE ruling. BUT who would like to test this in UAE
I understand testing such thing in Andorra etc., but in Sharia Law country to risk going to jail with Nigerians and Pakistanis. Thank you but no.
If you want to live in UAE better don't play with the law..

Now just wait 5 minutes Fred will proudly say how UAE put all these regulations just to satisfy EU government and you can do whatever you want in UAE

 

[khinkali]

Doesn't the Permanent Establishment rule basically make any foreign "active" enterprise a locally sourced income in UAE going forward?

My understanding is that the strategy looks like this:

• Live in the UAE for 183 days per year or, have sufficient property/business/whatever for the 90 day tax residence
• Do not spend enough time, have ties, work, etc. in any other country that would make you tax resident there, or create a PE or be taxed for working
• Do your business from a in a FZE, FZC, FZCO, or FZ-LLC in the UAE
• Pay yourself some salary and take the profit in dividends, tax free

I very much doubt that UAE will tax dividends from freezones to residents. This is what I mean by "it's the basis that matters".

UAE can signal their tax raising virtue by pointing to the new corporation tax and income tax. "Sadly", they can't do anything about the freezones because they are guaranteed in law for quite some time.

If the UAE tax base were to be expanded to free zone profits or their dividends, then the attractiveness will of course drop and people will look elsewhere.

 

[andrew28fl]

• Do your business from a in a FZE, FZC, FZCO, or FZ-LLC in the UAE

Thanks for clarifying. I do need to maintain a US LLC because of my client facing work, payment gateway etc..in that case, what would be the best strategy to minimize taxes? Should I still have a free zone entity along with the US LLC and the two entities can have some agreement to transfer more of the profits to the free zone entity? I would consult a professional later this year of course, I am just waiting for the dust to settle on all the ongoing changes in Dubai.

 

[khinkali]

@andrew28fl I can't even contemplate the implications of profit shifting from a US LLC to an offshore freezone, or whether the PE risk occurs even before you shift the profits. I'm looking more at a subsidiary approach, but there can be issues of underpriced royalties etc.

 

[FixieHartmann]

at this point Im just gonna commit tax fraud and live in a mismanaged place permanently

Banana island republic, Central / Latin America or Asia?

 

[JimBeam]

As far as my personal situation, I just have a second residency there with no substantial economic activity at the moment, these moves by the UAE government have put a stamp of approval to my move to malta in the coming months.

I guess you'll be looking for non-dom in Malta.
If so can I DM you with some questions?