Dubai Ruler Introduces a 20% Yearly Tax on Foreign Banks
- Publish date: Thursday، 07 March 2024 | Last update: Tuesday، 10 December 2024
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A recent legislation has been enacted about the taxation of foreign banks in operation in Dubai. The law applies to all foreign banks within the emirate, encompassing special development zones and free zones, excluding those in the Dubai Financial Centre.
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Under the law, foreign banks are subject to an annual tax of 20 percent on taxable income, with a deduction of the corporate tax rate if the bank pays tax as per the Corporate Tax Law. The legislation outlines regulations for computing taxable income, procedures for filing tax returns, payment protocols, audit procedures, voluntary declaration guidelines, and responsibilities tied to the tax audit process.
The law further delineates the rights of entities undergoing tax audits, specifying foreign banks and their branches licensed by the Central Bank of the United Arab Emirates for operation in Dubai. This legislative framework aims to streamline the taxation structure for foreign banks and uphold fiscal transparency within Dubai, fostering a conducive business environment.