UAE Taxable & Non-Taxable Sectors
In this article, we will discuss the sectors that are taxed and the sectors that are not taxed in the UAE.
Sectors that are taxed in the UAE:
- Oil and Gas Sector: The UAE is a major oil and gas producer, and the government imposes taxes on companies operating in this sector. Companies that operate in the upstream sector, such as exploration and production, are subject to a tax rate of 55% on their taxable income.
- Financial Sector: Banks, insurance companies, and other financial institutions are subject to a tax rate of 20% on their taxable income. However, Islamic banks are exempt from this tax.
- Tobacco and Carbonated Drinks: The UAE government imposes excise taxes on goods that are harmful to public health. These taxes are applicable to tobacco products and carbonated drinks. The tax rate on tobacco products is 100% of the retail price, while the tax rate on carbonated drinks is 50% of the retail price.
- Value Added Tax (VAT): The UAE implemented VAT in 2018. The tax is applicable to most goods and services, including food, clothing, electronics, and entertainment. The standard VAT rate in the UAE is 5%.
Sectors that are not taxed in the UAE:
- Personal Income: The UAE does not impose income tax on individuals. This means that employees and self-employed individuals do not have to pay any taxes on their income.
- Corporate Income: The UAE does not impose corporate income tax on companies. This means that businesses operating in the UAE are not subject to any taxes on their profits.
- Real Estate: The UAE does not impose a property tax on real estate. This means that individuals and businesses do not have to pay any taxes on the value of their properties.
- Inheritance and Gifts: The UAE does not impose inheritance or gift tax on individuals. This means that individuals do not have to pay any taxes on the assets they inherit or the gifts they receive.
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