Dubai: Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and ruler of Dubai, on Thursday, March 7, issued a law mandating a 20 percent annual tax on foreign banks operating in the emirate.
The new law applies to all foreign banks operating in Dubai, except those licensed to operate in the Dubai International Financial Centre (DIFC).
It mandates an annual 20 percent tax on foreign banks’ taxable income and the corporate tax rate will be deducted from this percentage, the Dubai Media Office (DMO) reported.
The law governs calculation of taxable income, tax filing and payments, procedures for the audit of tax filing, voluntary disclosure, and responsibilities and procedures related to tax auditing.
The law also outlines the rights of foreign banks and their branches licensed by the Central Bank of the UAE. Further, it permits taxable entities to challenge tax or fine amounts with Dubai’s Department of Finance, subject to specific legal conditions.
The Executive Council Chairman will determine the fine, which must not exceed Dirham 500,000 and double if repeated within two years, but not exceed Dirham 1 million.
