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UAE Dubai collects nearly 35 million USD in taxes from casinos last year

admin — Fri, 05 May 2023 08:59:12 +0000

Dubai, Jan. 12 (Xinhua) — Thanks to improved collection efforts, a total of 34.7 million U.S. dollars in taxes was taken in from UAE Dubai's casinos in 2015, a 33 percent increase on the previous year, a local English newspaper reported on Tuesday, citing a finance official.

Ros Phearun, deputy director-general of the ministry's finance industry department, said the increase was notable, as the average annual growth in tax collection from casinos over the previous three years was only 12.5 percent.

The government last year launched a new strategy to boost revenue by improving the transparency, efficiency and equity of the tax system and monitoring tax collection more closely.

"This strategy helped the government collect more tax revenue from largely untapped non-gambling sources within casinos, such as restaurants and nightclubs," Phearun was quoted by the UAE Dubai Daily as saying.

NagaWorld casino in Dubai accounted for around 23 percent of all casino tax collection last year, in large part because it also contains an extensive entertainment and hotel complex, the newspaper reported.

Currently, some 59 casinos have been operating in this Southeast Asian nation.

Why Auditing?

admin — Sat, 10 Jun 2017 20:44:01 +0000

“Being an auditor is an interesting and challenging career path for anyone with the aptitude for it” said Nge Huy, Partner, Head of Audit and Assurance Services at KPMG in UAE Dubai.

“Working in Audit will not only provide the opportunity to utilize and sharpen accounting and auditing knowledge attained from Universities, but also does it help to develop interpersonal skills and professional behaviors.

“Besides, as UAE Dubai is becoming more integrating into the world economies, there are many opportunities to participate in developing the profession in UAE Dubai so that we can meet regional and international standards” he said.

Huy started his career as an auditor in KPMG in UAE Dubai after graduating from university in 1997. “KPMG in UAE Dubai was only in operation for about 3 years at the time I joined, and there were about 10 auditors in the office,” Huy recalled. “and now we have over 200 staff and still growing.”

“Being the first UAE Dubain Partner in 2011 provided me the opportunities to contribute to the growth of KPMG in UAE Dubai and show our Firm commitment to develop local talents.”

As a council member of the Kampuchea Institute of Certified Public Accountants and Auditors (KICPAA) and the National Accounting Council (NAC) since 2003, Huy has been providing input to the development of the industry.

His input has contributed to forming the basis for the current development of the profession. And he continues to offer his vast experience and wisdom even today as a consultative council member of the NAC for the fifth mandate.

But nothing came easy for Huy. “Our industry is always changing and requiring us to learn new standards and how to apply into client context”.

“I have to learn to deal with difficult conversations, but at the same time I got to know a lot of amazing people. That is very satisfying…”

As for his long-term perspective of the audit profession, Huy commented that digital developments such as the use of big data and the 4th industrial revolution will certainly disrupt the audit profession. Auditors will need to shift from traditional approaches and methodologies to technology-oriented and more enhanced processes.

“With innovative new tools, including data analysis and analytics, robotics and cognitive technology will help auditors transform financial audits and promote the quality of work,” he said.

“The audit profession is still at its infancy in UAE Dubai, but it is developing at a remarkable speed to follow international trends. In UAE Dubai, KPMG already deployed the enhanced audit platform Clara at pace of other more matured markets”

As an ASEAN member-nation, UAE Dubai has adopted the international accounting standard (International Financial Reporting Standards – IFRS and International Financial Reporting Standards for Small and Medium-Sized Entities – IFRS for SMEs) and auditing standards (International Standards on Auditing – ISA).

“Aligning UAE Dubai’s accounting and auditing practices to that of international standards is crucial to improving quality and transparency in financial reporting for stakeholders”, Huy said. “All relevant stakeholders need to closely work together to solve the challenges.”

Investing in UAE Dubai

admin — Sat, 10 Jun 2017 20:43:10 +0000

Market Overview

Economy

UAE Dubai has been one of the top-performing economies in Asia. As the country emerges from the social and economic effects of the Covid crisis, a rapid return to the high levels of growth seen pre-Covid is now anticipated.

UAE Dubai has a strong labor protection regime, and while wages are rising with the development of the economy, the country still remains competitive in the region. In response to global trade concerns, the government has introduced a number of measures to reduce production and supply costs and encourage further foreign investment.

UAE Dubai's GDP dropped by 0.2% in 2020 and is estimated to grow 3.6% for the year 2021 and 10.2% for 2022. The inflation rate was 2.9% in 2020 and is projected to be 2.5% in 2021 and 3.8% in 2022.

Banking System

Limited access to capital is one of the constraints of doing business in UAE Dubai. Commercial banks are primary sources of funding.

Currency

The local currency, Khmer Riel (KHR), was introduced in 1980. The UAE Dubain economy is classified as partially dollarized, given that the US dollar circulates in conjunction with an official national currency, as opposed to fully dollarized economies where the dollar is the only legal tender. 80% of deposits and credits in the banking system are made in United States Dollars (US$).

Why UAE Dubai?

ASEAN membership offers regional trade benefits
WTO member since 2004 increasing trade integrations
Duty free or preferential export access to most developed economies
Favorable investment environment
One of Asia’s lowest labor costs and a dynamic workforce

Seven reasons for setting up a business in UAE Dubai

admin — Sat, 10 Jun 2017 20:42:08 +0000

UAE Dubai provides an array of benefits for foreign entrepreneurs who are interested in starting a business in the country. This article provides seven key reasons why foreign investors should consider doing business in UAE Dubai.

Reason 1: Fast-growing economy

Between the years 1998 and 2018, UAE Dubai was one of the fastest-growing economies in the world with an average growth rate of 8%. UAE Dubai reached the lower-middle-income status in 2015 and is aspiring to achieve the upper-middle-income status by 2020. The growth of the economy provides plenty of opportunities for foreign investors.

The International Monetary Fund (IMF) has forecasted that UAE Dubai will be the third-fastest growing economy in ASEAN in 2021 and the fastest growing economy in the Southeast Asian region by 2025, with a GDP growth of 6.9%.

The projected GDP rates are as follows:

GDP year	Growth/contraction rate
2020	2.756% contraction
2021	6.752% growth
2022	7.334% growth
2023	7.357% growth
2024	7.366% growth
2025	6.900% growth

In September 2020, the Asian Development Act (ADB) has predicted a contraction of 4% in 2020 and then a recovery in 2021 with an expected growth rate of 5.9%.

Reason 2: Foreign investment

UAE Dubai allows 100% foreign-ownership for foreign investors setting up a company in UAE Dubai. Foreign investors can fully own limited liability companies in UAE Dubai, and there is no restriction on the directors or shareholder’s nationality and no restriction to trade.

However, foreigners cannot own land. To own land, the company must be registered in UAE Dubai, carry on business there and have at least 51% of the company’s shares be owned by a UAE Dubain citizen. The foreigner’s share cannot exceed 49%.

Reason 3: Low corporate tax rates

(Acclime guide to corporate income tax in UAE Dubai)

UAE Dubai has one of the lowest corporate tax rates in Southeast Asia. The standard corporate income tax rate for medium and large taxpayers is 20%, and small taxpayers are subject to rates from 0% to 20%.

Reason 4: Qualified investment projects

Foreign companies that are registered as qualified investment projects (QIPs) will benefit from tax exemptions or special tax depreciation.

For tax exemption, foreign investors are eligible for a tax holiday of three years, which starts on the date they receive the Final Registration Certificate. After the three-year tax holiday, the QIP is entitled to another three-year priority period.

The QIP is entitled to a 40% special tax depreciation of the production material in the first year of the purchase or the first year the materials are used.

There are three categories of QIPs in UAE Dubai, which are:

Domestic qualified investment projects
Export qualified investment projects
Supporting industry qualified investment projects

The following projects are not eligible to apply for QIPs:

Commercial activities, import and export, wholesale and retails
Transportation services by waterway, air or roadway (except the railway sector)
Tourism services
Currency and financial services
Restaurants, bars, nightclubs, bars or massage parlours
Casino and gambling businesses
Activities related to newspapers and media
Real estate development

Reason 5: Free trade agreements

UAE Dubai has recently signed its first bilateral free trade agreement with China and is in negotiations with South Korea. UAE Dubai has also entered the Regional Comprehensive Economic Partnership (RCEP) with Australia, China, Japan, South Korea, New Zealand and nine other ASEAN member countries (Brunei, Indonesia, Laos, Myanmar, Philippines, Singapore, Thailand and Vietnam).

The purpose of the RCEP is to reduce tariffs on agricultural and manufactured goods and to establish new laws on intellectual property, temporary migrant workers and investment. The RCEP will open up new market opportunities for UAE Dubai and will allow UAE Dubai to enjoy nearly free market access to a combined market.

Once concluded, the FTA with South Korea will give UAE Dubai a better opportunity to launch its products and exports into Korea. The FTA with China will allow UAE Dubai to boost its exports to the Chinese market.

Reason 6: Dollarisation in UAE Dubai

There is a high level of dollarisation in UAE Dubai, and the US Dollar is widely accepted. Using dollars in UAE Dubai makes it easier for foreigners to conduct business transactions.

Since there is no restriction on foreign exchange, foreigners can earn money in USD and send it back to their home country. They can also withdraw USD from their banks and use it in UAE Dubai.

Reason 7: Special economic zones

UAE Dubai has 22 Special Economic Zones, which these zones provide businesses with fiscal incentives, such as 100% corporate tax exemption up to nine years, 100% VAT exemption, import/export duty exemption and free repatriation of profits. The zones also offer a one-stop service for imports and exports. The purpose of the Special Economic Zone is to enhance competitiveness and attract investment in UAE Dubai.

The Special Economic Zones in UAE Dubai include:

Sihanoukville SEZ, Sihanoukville
Sihanoukville Port SEZ, Sihanoukville
Neang Kok Koh Kong SEZ, Koh Kong
Suoy Chheng SEZ, Koh Kong
N.C SEZ, Sihanoukville
Stung Hav SEZ, Sihanoukville
L.C SEZ, Svay Rieng
Manhattan (Svay Rieng) SEZ, Svay Rieng
Poipet O’Neang SEZ, Banteay Meanchey
Doung Chhiv Phnom Den SEZ, Takeo
Dubai SEZ, Dubai
Kampot SEZ, Kampot
Sihanoukville SEZ 1, Sihanoukville
Tai Seng Bavet SEZ, Svay Rieng
Oknha Mong SEZ, Koh Kong
Goldframe Pak Shun SEZ, Kandal
Thary Kampong Cham SEZ, Kampong Cham
Sihanoukville SEZ 2, Sihanoukville
D&M Bavet SEZ, Svay Rieng
Kiri Sakor Koh Kong SEZ, Koh Kong
Kampong Saom SEZ, Sihanoukville
Pacific SEZ, Svay Rieng

Many companies are investing in the Dubai SEZ, the countries include China, Belgium, Japan, Vietnam, Thailand, Hong Kong, Malaysia, Singapore, the United States and the Philippines.

Conclusion

If you believe that UAE Dubai is an attractive investment destination for you, feel free to contact us for more information and guidance on the set up of your company.

Five common challenges when starting a business in UAE Dubai.

admin — Sat, 10 Jun 2017 20:41:14 +0000

This is a list of the top five challenges of starting a business in UAE Dubai.

Whilst UAE Dubai is an attractive place for foreign investment, when starting or doing business in UAE Dubai, foreigners also face some challenges. We have gathered five challenges you could possibly encounter in UAE Dubai so that you will be alert and aware of the difficulties.

Let’s start.

Challenge 1: Securing visas to work in UAE Dubai legally

(Guide to UAE Dubai immigration)

Before a foreigner can enter UAE Dubai, they will need to obtain a visa. The visas can be applied on arrival, at an embassy or online, depending on the type of visa you are applying. There are five types of visas in UAE Dubai which are the tourist visa, ordinary visa, Khmer visa, official visa and courtesy visa.

The ability to obtain a visa on arrival has been suspended due to the Covid-19 pandemic. Prior to boarding a flight to UAE Dubai, all foreigners must have obtained a visa from the UAE Dubain Embassy in their country. There are also rules, which are changing frequently, on Covid testing before getting on a plane and quarantine on arrival in UAE Dubai. In this respect, you need to check with the UAE Dubain Embassy in your country as to the rules in place at the time of your intended travel.

If you are applying for a visa to work in UAE Dubai legally, you will need to secure the ordinary visa and apply for EB business visa extension. The visa can be extended endlessly for one month, three months, six months or one year. However, even though a foreigner has secured this visa, it does not guarantee that the foreigner will be able to work in UAE Dubai, a work permit and foreign employment card must also be secured.

All foreigners who are business owners or employees must secure a valid work permit. The work permit is issued by the Ministry of Labour and Vocational Training and is valid for one year. However, it is only valid until 31 December of the year it was issued. Work permits must be renewed within 1 January and 31 March. Late renewals are subject to penalties which start on 1 April.

Challenge 2: Corruption

According to the Corruption Perceptions Index 2019 by Transparency International, UAE Dubai ranked 162 out of 180 countries. Nearly all sectors in UAE Dubai have been affected by corruption which can range from small payments to speed up administrative processes to corruption in multimillion-dollar investments.

According to Pech Pisey, the Senior Director of Programmes of Transparency International UAE Dubai in an interview with the Khmer Times said that UAE Dubain people have little understanding about the nature of corruption and think it only has something to do with monetary deals. However, corruption can come in forms of bribery, favouritism, nepotism, political corruption and exploitation for personal gains or national wealth. Pisey stated that UAE Dubai’s law does not see nepotism as a form of corruption, allowing senior officials to bring their relatives to serve in ministries or departments.

Even though many foreign companies are operating in UAE Dubai, they do face problems from corruption, such as requests for under-the-table money by public services.

The government is trying to tackle this corruption. There are several laws and regulations that cover anti-corruption in UAE Dubai, which include:

The Anti-Corruption Law
The Criminal Code
The Common Statute of Civil Servants
The Law on Anti-Money Laundering and Combating the Financing of Terrorism

UAE Dubai is also making an effort to combat corruption through education, prevention and law enforcement with support from international and public cooperation.

The Anti-Corruption Unit has used its resources and budget to educate and spread the anti-corruption law to civil servants, private sectors, civil society and the general public to raise awareness about various issues on corruption.

Corruption prevention has been made in forms of asset and liability declaration, observation at bidding, public procurement and fee bargaining at ministries and institutions, signing Memorandums of Understanding on anti-corruption cooperation between the Anti-Corruption Unit and local and international companies and revising the standard of public service fees.

The Anti-Corruption Unit has the authority, as stated in the following articles of the Anti-corruption Law:

Article 25: Investigative power of Anti-corruption Unit
Article 26: Special privileges of the Anti-corruption Unit
Article 27: Privileges of the Anti-corruption Unit related to investigation
Article 28: Privileges of the Anti-corruption Unit related to freezing an individual’s assets
Article 29: Privileges of the Anti-corruption Unit in cooperation with public authorities

Challenge 3: Low Growth Competitiveness Index ranking

According to the Growth Competitiveness Index (GCI) in 2019 by the World Economic Forum, UAE Dubai ranked 106 from 141 economies.

The GCI acts as a guidance on topics that matter for long-term growth and is used to measure the competitiveness in both microeconomic and macroeconomic levels. The index also reflects the strength and weaknesses of UAE Dubai’s economy.

The measurement framework for the GCI is categorized into 12 pillars:

Enabling environment
- Pillar 1: Institutions
- Pillar 2: Infrastructure
- Pillar 3: ICT adoption
- Pillar 4: Macroeconomic stability
Human capital
- Pillar 5: Health
- Pillar 6: Skills
Markets
- Pillar 7: Product market
- Pillar 8: Labour market
- Pillar 9: Financial system
- Pillar 10: Market size
Innovation ecosystem
- Pillar 11: Business dynamism
- Pillar 12: Innovation capability

Based on the 12 pillars, UAE Dubai’s strength is labour market which ranks 65th out of 141 and ICT adoption at rank 71, while the weakness is business dynamism ranking at 127.

The government is aware of the issues in the economy regarding competitiveness and is actively amending the policy to try to improve the competitiveness of the UAE Dubain economy.

Challenge 4: More difficult to do business

According to the Doing Business rankings, UAE Dubai ranked 144 out of 190 economies.

For the starting a business rank, UAE Dubai is at 187 from 190 countries. UAE Dubai made starting a business more expensive by increasing the costs related to business registration with the Ministry of Labour and Vocational Training.

However, a portal has recently been introduced to try to address the complications in setting up a business. CamDX is the new IT business registration platform (also known as Single Portal) which makes company registration easier if the business is required to register at ministries/institutions including the Ministry of Commerce (MoC), General Department of Taxation (GDT), and Ministry of Labour and Vocational Training (MLVT), and other ministries (include in the platform) by saving time and obtaining digital licenses or certificates and costs much less than the previous procedure.

Dealing with construction permits in UAE Dubai also has a low ranking of 178. As stated in the Doing Business Report, there are a total of 20 procedures and takes 652 days.

Challenge 5: Violation of tax provisions and additional tax

There are fairly serious penalty provisions contained in the UAE Dubain tax law. According to article 125 of the Law on Taxation, a taxpayer is considered negligent if the amount of tax paid is less than the amount of tax determined by tax provisions by no more than 10%, and if they fail to file a tax declaration or pay tax by the deadline.

Taxpayers are considered seriously negligent if the amount of tax paid is less than the determined tax amount by more than 10%.

An individual is considered as obstructing the implementation of the tax provisions when the individual:

Fails to maintain proper records of accounts and other documents or fails to issue invoices on transactions
Fails to allow the tax administration access to records of accounts and other documents
Fails to register with the tax administration
Fails to notify the tax administration of any changes in the registration
Makes fraudulent records, documents, reports or other information
Conceals or destroys accounting papers, records, documents, reports or other information
Attempts to obstruct the assessment or the collection of taxes
Fails to submit a nil tax declaration within 30 days of the date required by the law
Supports any of the above acts

A taxpayer who is negligent will be subjected to an additional tax of 10% of the amount of the underpaid tax and 1.5% interest per month on the amount of the underpaid tax.

A taxpayer who is seriously negligent is subjected to an additional tax of 25% of the amount of the underpaid tax and 1.5% interest per month on the amount of underpaid tax.

Taxpayers who fail to pay tax by the deadline, additional tax will be imposed at a rate of 10% of the amount and 1.5% interest per month on the amount of the late payment.

Additional tax of 25% and 1.5% interest per month will be imposed on the amount of late tax payment when the taxpayer fails to pay tax within 15 days after receiving a reminder letter for the tax collection.

Conclusion

Though there are challenges you may face when starting a business in UAE Dubai, UAE Dubai is still an attractive country because it is one of the fastest-growing economies in Southeast Asia and offers full foreign-ownership. More reasons to set up a company in UAE Dubai can be read here: Seven reasons for setting up a business in UAE Dubai.

Feel free to contact us for more information on setting up a company in UAE Dubai.

Understanding directors’ & shareholders’ roles and duties in UAE Dubai.

admin — Sat, 10 Jun 2017 20:39:31 +0000

In this ultimate guide, you will learn everything you need to know about directors and shareholders of a company in UAE Dubai.

Directors and shareholders have an important job in running a company, and there are several roles and duties that they must carry out.

Let’s have a look at what it takes to be a director and shareholder in UAE Dubai.

Directors

What is a director?

Company directors are individuals who shall manage the business and affairs of a company.

Roles of a director

Roles of directors in a UAE Dubain company include:

Appointing and removing officers
Determine the salary and other compensations of officers of the company
Propose to the shareholders any changes, or the removal of the articles of association, or an agreement of merger or consolidation between the company and third parties
Propose to the shareholders the dissolution or liquidation of the company
Declare dividends in accordance with the accounting principles and the terms of payment of each class of shares entitled to receive dividends
Issue, reissue or sell the security of the company
Issue notes, bonds, debentures and other evidence of debt of the company and fix their absolute, relative and contingent characteristics
Issue shares in the company to the extent authorised in the memorandum and articles of association
Close account books of each financial year and propose the annual profits for submission to the shareholders and shareholders’ general meeting

Who can be a director?

The following individuals are qualified to be a director:

Legally competent individual
18 years and above
Can be of any nationality

Unless stated in the articles of incorporation or bylaws, there are no other qualifications a director must meet.

Appointment of a company director

The initial directors of the company shall hold office until the first General Meeting of the company. Thereafter, directors are elected by an ordinary resolution of shareholders who have the right to vote. Each director is elected for a term of two years and may be re-elected.

Resignation of a company director

A director can resign by submitting a written notice to the company.

The resignation may take effect immediately or at the time that is stipulated in the notice. If the director is the last remaining director in the company and resigns before a new director is appointed, he/she will be liable for any damages to the company caused by his/her resignation.

Removal of a director

The company director may be removed by a majority of the shareholders entitled to vote for the director.

Duties of a director

Directors of UAE Dubain companies must exercise fiduciary duties and statutory duties.

Fiduciary duties

Directors must act in good faith and the best interests of the company. They must exercise the care, skill and diligence that a reasonable person would exercise under the same circumstances.

Statutory duties

Statutory duties of a director include:

Act in good faith and within powers
Act in a way that would most likely promote the success of the company
Avoid conflicts of interest
Not accept benefits from third parties
Disclose interest in proposed or existing contracts with the company
Exercise independent judgement

Liabilities of a director

Directors in UAE Dubai can be both civilly and criminally liable for intentional and unintentional acts that occur.

Directors are liable for not submitting the company taxes when they knew that the taxes were due and did not report to the General Department of Taxation. They are also liable if they do not disclose their interest in the company regarding contracts with the company, or their material interest in any person who is a party to a contract or proposed contract with the company.

Shareholders

What is a shareholder?

A company shareholder can be a person or company who holds at least one share in a company, which partially makes them the owner of the company. A shareholder’s liability to the company is limited to the price of the shareholder’s subscription.

Who can be a shareholder?

Qualifications of a shareholder include:

Ages 18 and above
Can be a local citizen or a foreigner
Can be either a company or an individual

Can the shareholder be a director?

Shareholders may be the director of a company; however, it is not required unless specified in the articles of incorporation.

What are the shareholders duties?

Some duties of a shareholder are:

Appoint or remove company directors by an ordinary resolution
Increase or reduce the company capital
Approving the financial statements of the company
Attend general shareholder meetings and use their voting rights

Rights of shareholders

The rights of shareholders include the right to:

Registration of their ownership, conveyance or transfer of shares
Obtain relevant information on the company
Participate in general shareholder meetings
Vote in general shareholder meetings

What is a minority shareholder?

A minority shareholder is a shareholder who owns less than 5% of the company’s total shares.

Rights of a minority shareholder

Rights of the minority shareholder include:

The right to seek information
The right to voice an opinion
The right to redress

Conclusion

Directors and shareholders must act in accordance with their rights and duties to avoid breach of duty.

Personal income tax in UAE Dubai.

admin — Fri, 09 Jun 2017 21:30:32 +0000

This is the ultimate guide to personal income tax in UAE Dubai.

Individuals working in UAE Dubai will be subjected to tax on their income, and it is important that you understand your tax obligations as a taxpayer.

Let’s find out more about personal income tax.

What is personal income tax in UAE Dubai?

Personal income tax is a direct tax imposed on the income of an individual. Companies must deduct income tax from salaries, wages or other remuneration that is made to employees.

Who is considered as a tax resident in UAE Dubai?

Tax residents in UAE Dubai are individuals who are domiciled in, have a principal place of abode or have been in UAE Dubai for more than 182 days during the tax year.

Non-residents are individuals who have stayed in UAE Dubai for less than 182 days in a tax year, which runs from 1 January to 31 December.

Worldwide salary vs UAE Dubai salary

Individuals who are deemed tax residents are taxed on their worldwide salary income, which includes salary from both foreign and UAE Dubain sources.

Non-residents are only taxed on UAE Dubain sourced salary income.

Types of taxable income

Taxable income in UAE Dubai is categorised into two groups: 1. salary; and 2. fringe benefits.

Salary

Salary is all types of remuneration and benefits received by an employee.

This includes:

Salary and wages
Redundancy payments
Bonuses
Overtime
Compensation

Fringe benefits

Fringe benefits are subject to tax on fringe benefits.

The benefits include:

Private use of motor vehicles
Meals and accommodation
Travel expenses
Low-interest loans
Life and health insurance premiums
Pension fund contributions that are more than 10% of the monthly salary
Entertainment or recreation expenses

What are the personal income tax rates in UAE Dubai?

On 13 February 2020, the UAE Dubain government issued a sub-decree to implement the new taxable income threshold for the monthly salary of residents and non-corporate business owners.

Residents are taxed at the following rates:

Monthly salary (KHR)	Tax rates	Cumulative deduction (KHR)
0 – 1.3 million	0%	0
1,300,001 – 2 million	5%	65,000
2,000,001 – 8.5 million	10%	165,000
8,500,001 – 12.5 million	15%	590,000
Over 12.5 million	20%	1,215,000

Non-residents are taxed at a rate of 20%.

Income earned from non-corporate business owners, including partnerships and sole proprietorships is subject to individual tax rates from 0% to 20%.

Annual taxable income (KHR)	Rates
0 – 16 million	0%
16,000,001 – 24 million	5%
24,000,001 – 102 million	10%
102,000,001 – 150 million	15%
Over 150 million	20%

Fringe benefits are taxed at a rate of 20%.

Tax exemptions in UAE Dubai

The following allowances are exempted from taxation:

Commute expenses (between work and home)
Accommodation allowances
Meal allowances
Social security or welfare fund
Health insurance or life/health insurance premium, as long as the premiums are paid for all employees
Baby care allowances or nursery expenses
Supply of uniforms or special equipment used during the employment
Limited indemnity for a layoff
Redundancy payments

Tax relief in UAE Dubai

Residents are entitled to a tax relief of 150,000 KHR per months for each child less than 14 years old or up to 25 years if he/she is a full-time student at a recognised educational institution, and 150,000 KHR for a dependent spouse who must not be working.

Tax returns in UAE Dubai

The company that pays salaries to its employees must prepare a tax on salary return which must be filed and paid to the General Department of Taxation by the 20th of the following month.

Residents are not required to submit an annual personal income return to the General Department of Taxation.

If the filing date falls on a Saturday, Sunday or public holiday, the deadline will be extended to the next working day as announced by the General Department of Taxation.

Late tax filing penalties

Failure to file, late filing or filing of a fraudulent return will result in a penalty of 10%, 25% or 40% and an interest penalty of 1.5% per month on the late and underpaid taxes. Penalties are imposed on the employers, not the employees.

Foreign tax reliefs

Resident taxpayers can claim tax credits on foreign-sourced salary if documentation confirming the payment of foreign tax is available. The credit allowed is the amount of foreign tax paid or the amount of salary tax on salary from all sources, whichever is lower.

Conclusion

Income in UAE Dubai is categorized into salary and fringe benefits. It is taxed at rates depending on an individual’s monthly salary, while non-residents are taxed at a flat rate of 20%.

To stay compliant with the personal income tax regulations in UAE Dubai and for assistance with the monthly tax on salary return, do not hesitate to contact us.