Dubai has a taxation system that is hugely favorable for its residents. Yet, if you have shifted to Dubai with a new job and are wondering about income tax filing for salaried professionals, you need to consult a firm like GCC Filings that will help you out with all aspects regarding taxation, company incorporation, setting up a business in Dubai, VAT and so on.
Dubai is a major city in the UAE (United Arab Emirates) and there are a few global agreements or laws which cover the country overall. In some scenarios, every Emirate can establish their own specific regulations as well. Individuals working in Dubai will not be taxed on the basis of their individual or personal income. However, people should be aware that in spite of not having tax liabilities on their personal earnings in the UAE from salary, they may be required to pay taxes in other countries where they draw part of their income from, or even in their home countries.
Key aspects for Income Tax Filing for Salaried Citizens in UAE
There are no individual taxes in Dubai and it is basically only corporate taxes that entities need to pay along with VAT which is a major tax payable by businesses. Property taxes apply for selling or buying properties and if you have lived for a minimum of 12 months in the UAE, then you may be eligible for foreign earned income exclusion if the USA is your home country. This means that you will not have taxes payable till a certain threshold. You can extend the filing date with extension for filing sometime later once you have been outside your home country, the USA for a year. This is dependent on how much you earn or your rental/housing costs and family situation.
Those USA natives earning up to $105,000 annually in Dubai can get their whole income exempted under the Foreign Earned Income Exclusion policy on their IT returns. Additionally, since tax exemptions on salaries are provided by the laws of the UAE, this will not be taxable in India. Income earned in UAE and similar countries, with which India possesses tax treaties, will be exempted completely. If the status of a salaried professional stands at resident Indian, then income that is earned abroad will be taxed on India. Yet, taxes will be payable solely on the income earned in India if he/she is an NRI (non-resident Indian).
The Indian income may be salary that is received in the country, payments for services that have been provided in India, rent from house property in the country and capital gains upon asset transfer in India. Interest earned from savings bank accounts or fixed deposits in India is also taxable under this law. The UAE only imposes corporate taxes on foreign banks and oil companies. Excise tax is applicable for specific items while VAT (Value Added Tax) is imposed on most goods and services. VAT was unveiled on the 1st of January, 2018, at 5% and has revolutionized the taxation system in the UAE.