- Dubai, UAE - VAT - rate, regulation, refund, VAT certificate.

Dubai, UAE - VAT – rate, regulation, refund, VAT certificate

Free Trade Zones in  Dubai - a successful model, attracting international business.In general, there is no VAT in Dubai - neither for companies, nor for individuals. Some time ago, the issue of possible introduction of VAT in Dubai with a rate of about 5% was covered in different press, but discussions thereof did not entail its introduction.

For this reason, unlike other countries of the world where free trade is carried out only in airport Duty Free zones, we can say that the whole of Dubai is a duty free zone.

What exists in the United Arab Emirates - a marginal customs duty on goods imported into the main territory averaging 5%. For this reason, the goods in Dubai airport can still be somewhat cheaper than on the mainland.

Due to the lack of VAT as such, refund of value added tax on the export of goods from the UAE is not carried out, as simply there is nothing to be refunded.

The absence of VAT is one of the important conditions for successful business development in the UAE. In those countries, where VAT is charged, noticeable financial resources of companies are constantly in standby due for refund of value added tax, whereby the funds intended for business should work efficiently.

Dubai registered companies can obtain a VAT certificate, allowing them to be exempt from VAT when they purchase goods in the countries where VAT is charged. This makes Dubai very attractive for international trading companies. If such international trading company is registered in another tax attractive country, for example, the Seychelles or Panama, getting a certificate for VAT refund in such countries for tax exempt companies is not possible.

Besides the absence of VAT, Dubai also offers the possibility of registering companies fully exempt from other taxes such as profits tax, withholding tax, etc.

Moreover, provided a company in the Emirates is chosen correctly, such company, besides the VAT certificate can also get a UAE tax residency certificate, allowing it to enjoy the benefits of double taxation avoidance agreements signed by the UAE with a large number of countries.

According to the results of various studies and expert opinions comparing the tax systems of different countries, the absence in the UAE of VAT and other taxes, the developed legal framework and the availability of infrastructure for virtually any type of business placed the United Arab Emirates among the world leaders offering favorable business environment.