The UAE issued a law imposing an annual tax on foreign banks operating in the emirate.
The Emirates News Agency, WAM, stated that the new law issued by the Vice President of the UAE, Prime Minister, and Ruler of Dubai, Sheikh Mohammed bin Rashid Al Maktoum, applies its provisions to all foreign banks operating in the Emirate of Dubai, including special development zones and free zones. .
Under the law, foreign banks licensed to operate in the Dubai International Financial Center are excluded from the income they generate from conducting their business within or through the centre.
The law stipulates that an annual tax of “20 percent” will be imposed on foreign banks on taxable income, and the corporate tax rate will be deducted from this percentage, in the event that the foreign bank pays the tax under the corporate tax law.
The law allows the taxable person to object to the Department of Finance about the amount of tax or fine imposed on him in accordance with its provisions, in accordance with certain requirements detailed by the law.
The law regulates the rules for calculating taxable income, the controls for submitting the tax return and paying the tax, the procedures for auditing the tax return and voluntary declaration, and the duties and procedures related to the tax audit process.
According to the agency, this law applies to tax periods that begin after the enforcement of its provisions. The rules, procedures, and periods stipulated in Regulation No. (2) of 1996 regarding collecting tax from branches of foreign banks in the Emirate of Dubai also apply to tax periods that began before the provisions of the law came into effect. No. (1) of 2024.
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