Dubai: Sheikh Mohammed announces new 20% annual tax on foreign banks – News
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A new law has been enacted on taxation of foreign banks operating in Dubai. The provisions of the law apply to all foreign banks operating in the emirate, including special development zones and free zones. Those from the Dubai Financial Center are excluded.
The law stipulates that a 20 percent annual tax on taxable income will be imposed on foreign banks, and the corporate tax rate will be deducted from this percentage, if the foreign bank pays the tax under the Corporate Income Tax Law. Societies.
The law regulates the rules for calculating taxable income, the controls for filing the declaration and paying the tax, the procedures for the inspection of the declaration and voluntary declaration, and the duties and procedures related to the inspection process. fiscal. The law also specifies the rights of the person subject to the tax audit, which is the foreign bank and its branches authorized by the Central Bank of the United Arab Emirates to operate in Dubai.
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The law also allows the taxable entity to file objections to the Dubai Finance Department regarding the amount of tax or fines imposed on it, subject to certain conditions detailed in the law.
According to the Law, the Chairman of the Executive Council of Dubai will issue a decision on the acts considered violations of this Law and the penalties imposed for violations. The total penalties imposed must not exceed Dh500,000. The fine will be doubled in the event of a repeat offense within two years to a maximum of 1 million dirhams.
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