A new law has been introduced concerning the tax applied to foreign banks in Dubai. The law affects all foreign banks in the emirate, except those in the Dubai Financial Centre. It mandates an annual tax of 20% on taxable income, with the corporate tax rate deducted if the bank pays tax under the Corporate Tax Law.
The law outlines regulations for calculating taxable income, submitting tax returns, and paying taxes, as well as procedures for auditing tax returns and voluntary declarations. It also delineates the rights of foreign banks and their branches licensed by the Central Bank of the UAE to operate in Dubai during tax audits.
Taxable entities have the right to raise objections with Dubai’s Department of Finance regarding tax amounts or fines, provided they meet specific conditions outlined in the law. Violations of the law will be determined by the Chairman of The Executive Council of Dubai, who will also decide on penalties. The maximum penalty is capped at Dh500,000, with the fine doubling for repeat violations within two years, up to a maximum of Dh1 million.
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