Where are you going after the UAE?

[OTROTG]

Sorry, I got this mixed up in my reply.
Corporate profits up to 375k aren't taxed (and possibly no corporate tax if revenue is less than AED 3M).
Salaries aren't taxed, so you can pay a high salary, but this is subject to GAAR. So you can only pay a "regular" salary, you can't inflate your salary to artificially lower the corporate profits. Sorry for the confusion.

For those on freelancer licenses, I believe you'd usually have a FZE, and I would expect that to be treated as a company. So you could probably do the same thing with salary + "dividend" as they have made it clear that corporate tax also applies to individuals.

Thanks for clarifying. Regarding GAAR, I think the strategy you mentioned could work to make use of "bonus" pay and dividends, etc. in addition to salaried pay to effectively reduce the CIT.

I think this does start to spell the beginning of tax-free in UAE though. Eventually, they will probably begin to increase their CIT and begin to introduce PIT. Once any government gets a taste of tax revenue, its appetite will become insatiable, if history is any indicator. lol

 

[JustAnotherNomad]

Dividends are paid after corporate tax has been paid, so that would only work if you can get the small business relief (no corporate tax for 3 years if the revenue is below AED 3M).
The bonus would also be subject to the GAAR.

 

[jafo]

It's very easy to get a Golden Visa now, and cheaper as well. I'll probably use that opportunity. Then I'll have residency without the hassle of having to deal with freezones at all.

Any links I can read up on this?

 

[lacomaco]

Any links I can read up on this?

It is coming from the government

Golden visa - The Official Portal of the UAE Government

The Golden visa is a long-term residence visa which enables foreign talents to live, work or study in the UAE while enjoying exclusive benefits. Investors, entrepreneurs, scientists, outstanding students and graduates, humanitarian pioneers and frontline heroes are among those eligible for the...

u.ae

 

[JustAnotherNomad]

Any links I can read up on this?

The government websites aren't great. It's 6 month of salary of at least 30k per month and a visa with a "high-value" profession (the list is long, you can be a magician). Then you can apply. A legalized university degree may be required.
There are other ways, too, such as owning real estate, but the salary route is the simplest. You can employ yourself in your own company.

 

[bibing]

9% is nothing comparing to other countries.

Stay in UAE.

 

[OTROTG]

Dividends are paid after corporate tax has been paid, so that would only work if you can get the small business relief (no corporate tax for 3 years if the revenue is below AED 3M).
The bonus would also be subject to the GAAR.

Hmm, I guess this still leaves room for some "consulting" or other service-related fees you can invoice from one of your other companies to your UAE company to help reduce the profits below the CIT threshold.

 

[JustAnotherNomad]

The UAE is implementing transfer pricing following the OECD model, so in theory, with such an approach, you'd be looking at the same problems as in any other country.
Also, if you have a company in another country that has a lower tax rate than your UAE company, why would you want to use a UAE company at all?

 

[OTROTG]

I believe there are some countries that won't tax you on foreign-earned income such as HK. It's just another possibly useful addition to your stack. For transfer pricing, I guess it depends on how you structure the other company outside of UAE, they may not technically be 'associated'.

But yes, I do see your point. If you have another company that does allows for 0% CIT in another jurisdiction, a company in UAE wouldn't be entirely necessary. One thing I might think of is that there is still 0% PIT and a residence permit for you to use on banking applications elsewhere.

 

[JustAnotherNomad]

I believe there are some countries that won't tax you on foreign-earned income such as HK.

As far as I know, the 0% tax thing with HK companies is similar to the US: HK companies without operations are not taxed in HK, but they aren't formally resident either.
So their idea would be that the activity should be taxed somewhere else - where? Do you need a resident director on paper only and HK would accept this as not having any taxable activity in HK? Then you might get away with it in the UAE.
Otherwise you'd be back to the risk of having management and control or a PE in the UAE, with the risk of the HK company being subject to corporate tax in the UAE. (Obviously this is very hypothetical, it seems extremely unlikely that the UAE would be enable to properly enforce this anytime soon.)

One thing I might think of is that there is still 0% PIT and a residence permit for you to use on banking applications elsewhere.

Yes, but then it's either the risk of UAE corporate tax mentioned above (unless you can explain that the company is not managed from the UAE), and/or you would have to pay out a salary instead of dividends if the company is in a country with a higher corporate tax rate (the UK or Estonia could be good candidates for this).

 

[jafo]

Also, if you have a company in another country that has a lower tax rate than your UAE company, why would you want to use a UAE company at all?

Spread the risk or stay under a certain tax threshold (<375K AED or <3M revenues)?

 

[Au999]

Totally happy staying in Dubai.

Even at the low rate of 9% there are 100s of legitimate ways to reduce taxes, UAE salaries are typically higher than elsewhere, quality of life is great, keep under the radar, don't be flashy and it's an amazing place.

When I'm back in the UK it's such a depressing place I actually can't wait to get back to Dubai.

 

[Paul Tudor Jones]

Totally happy staying in Dubai.

Even at the low rate of 9% there are 100s of legitimate ways to reduce taxes, UAE salaries are typically higher than elsewhere, quality of life is great, keep under the radar, don't be flashy and it's an amazing place.

When I'm back in the UK it's such a depressing place I actually can't wait to get back to Dubai.

It's unfair to compare it to the UK... almost any European country is better than the UK.

 

[JohnLocke]

Even at the low rate of 9% there are 100s of legitimate ways to reduce taxes, UAE salaries are typically higher than elsewhere, quality of life is great, keep under the radar, don't be flashy and it's an amazing place.

That's finally a fantastic reply. I don't understand all the panic about the 9% considering exact the options you mentioning.

 

[troubled soul]

That's finally a fantastic reply. I don't understand all the panic about the 9% considering exact the options you mentioning.

US woman detained in Dubai for 'screaming' at man

Fears for influencer ‘Sassy Trucker’ arrested in Dubai over local morality laws

Tierra Allen is latest victim of alleged rental car extortion attempt targeting tourists

www.independent.co.uk

Defamation is a serious offence punishable by hefty fines and jail time in the UAE. According to the law, "publicly attributing statements to another person which may expose him to contempt of others" can get one fined Dh20,000 and jailed for up to two years.

problem is not tax rate...but dealing with Government people and facing weird law.......Before this You do not need to deal with this type of things...as 2-3 days per year.....Only you deal with immigration officer ..that's it.. now, you need to spend a lot of time and energy dealing with complicated rules and regulations which "change everyday ". This can be very time-consuming and frustrating..Complete tax free Dubai is heaven...IMHO for White passport holder, Now Dubai is not worth the headache ...better to Register USA LLC live in Thailand, Bali, Monaco or any Caribbean country...Totally tax free...What is a need to paying 9% tax when you still can run your business total Tax free....

Between do Look into this two post
Best tax free setup for Web development business...for Dubai resident

Best tax free setup for Web development business...for Dubai resident

As New corporate Tax introduce.....but still There is no personal tax...so want to get benefit of this.. I want to register my Web development business...with tax free status What will be the solution for this while being resident of Dubai ? Thinking of USA LLC...as It is tax free and cheap. but...

www.offshorecorptalk.com

 

[Dasilva]

I've noticed an increasing number of people from Dubai, mainly from the EU, choosing to come to Bulgaria. They seem comfortable paying the 9 percent tax and are now willing to pay 10 percent here due to significantly lower maintenance costs.

 

[troubled soul]

I've noticed an increasing number of people from Dubai, mainly from the EU, choosing to come to Bulgaria. They seem comfortable paying the 9 percent tax and are now willing to pay 10 percent here due to significantly lower maintenance costs.

Agree...I forget to mention High cost of living

 

[MrPepper]

US woman detained in Dubai for 'screaming' at man

Fears for influencer ‘Sassy Trucker’ arrested in Dubai over local morality laws

Tierra Allen is latest victim of alleged rental car extortion attempt targeting tourists

www.independent.co.uk

problem is not tax rate...but dealing with Government people and facing weird law.......Before this You do not need to deal with this type of things...as 2-3 days per year.....Only you deal with immigration officer ..that's it.. now, you need to spend a lot of time and energy dealing with complicated rules and regulations which "change everyday ". This can be very time-consuming and frustrating..Complete tax free Dubai is heaven...IMHO for White passport holder, Now Dubai is not worth the headache ...better to Register USA LLC live in Thailand, Bali, Monaco or any Caribbean country...Totally tax free...What is a need to paying 9% tax when you still can run your business total Tax free....

Between do Look into this two post
Best tax free setup for Web development business...for Dubai resident

Best tax free setup for Web development business...for Dubai resident

As New corporate Tax introduce.....but still There is no personal tax...so want to get benefit of this.. I want to register my Web development business...with tax free status What will be the solution for this while being resident of Dubai ? Thinking of USA LLC...as It is tax free and cheap. but...

www.offshorecorptalk.com

This car rental thing happened to me in Dubai as well. They tried to scam me for 5000 aed deposit (supercar rental in JBR). Played games and delayed giving the deposit back. I did my research after a few contacts on whatsapp and sent them a pretty long and detailed email of my next steps if they do not return it by xy date. They shat their pants and all of a sudden became responsive and gave the money back.

Have in mind, there were 0 threats in the email, just steps I'm going to take to escalate this further. It wasn't a money thing but a principles thing from that point and they figured it's better to pay back than to deal with me.

Anyways, if they introduced a 9% tax, I'm pretty sure there will be personal income tax as well within a few years, no matter what they say. As long as things will work well for me in Dubai, I'll keep my company there for now. But as a backup, I'll keep researching to find better options or at least alternatives so I am ready if the move will be needed.

It's not about Dubai even and can't be mad at them. Western governments do these types of things all the time. They say one thing and give promises, but later they 'change their minds'. I am personally not worried about the 9% tax, but all the accounting, paperwork, audits, and stuff we will have to do from now on. There are ways to lower the tax you pay. Salaries, all expenses through the company, all travels, business dinners etc.

 

[Alonzo]

When I'm back in the UK it's such a depressing place I actually can't wait to get back to Dubai.

Give reasons why you find the UAE better than the UK

It's unfair to compare it to the UK... almost any European country is better than the UK.

Explain

 

[scooterguy]

IMO any tax rate is bad in UAE, mostly because of crazy expenses, and also their authoritarian and oppressive legal system. I wouldn't like to make a mistake in my tax declaration and find myself in the wrong side of the law in a country that is culturally 400 years in the past.

I lived and owned several companies in UAE many years ago, and it gave me peace of mind that there were no taxes, so 0% risk of facing their legal system in that regard.

Furthermore, the risks and expenses don't really bring any rewards; no social security, no path to citizenship, nothing.