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Taxes in UAE...are they really coming ?

DUBAI — UAE authorities are discussing the possibility of introducing sales and income taxes in the country, according to a top UAE government official...

http://www.khaleejtimes.com/DisplayArti ... iness&col=

Doesn't make a diff to me - I already pay tax working here!

Not having to pay tax is one of the primary reason everyone is coming to UAE. its very discouraging to see they r thinking about introducing tax here!

[quote="Mayflower"]Not having to pay tax is one of the primary reason everyone is coming to UAE. its very discouraging to see they r thinking about introducing tax here![/quote

Wow, they better think this one through. It will have a very negative impact on the economy here, getting expesnive as is, and the majority of the expat community will not tolerate income tax, that's for sure.

We are setup in the free zone and have signed an agreement for 25 years of no taxes, but still, unsettling to hear this development..

And income taxes are not going to be taken nicely, unless there are some serious benefits like free health care, unemployment insurance, and other benefits that tax payers get in other countries.

yea i agree with jag on that one i dont mind paying the taxes .. but i gotta get the benefits ..

Its already started with the introduction of the stealth "property tax" collected by DEWA

and......... cigarettes are already taxed

Wow!! Income tax in Dubai!! Has anybody heard any more news on this story? I really can't see it happening - that's the main attraction of moving to foreigners such as myself..

I saw this article yesterday and thought it was interesting...

http://www.thebusinessonline.com/Storie ... AC85BF7FDF

Dubai has the answer to Brown’s nightmare Britain


By : Allister Heath January 08, 2006

PICTURE the scene on a cold, wet London night. At 11 Downing Street Gordon Brown is sleeping the sleep of the innocents.

The Chancellor is having a wonderful dream, as far from the troubles of the British economy as it is possible to be, momentarily transported instead to a land of economic plenitude, the closest thing there is on this earth to heaven for finance ministers. Plenty of palm trees, warm weather and no crime.

Still sleeping soundly, the Chancellor can see dozens of shiny new skyscrapers sprouting from the desert, hundreds of thousands of new jobs being created, and people flocking from all over the world to work there. What a land, he thinks to himself: that’s what you call a proper economy.

Dreams are such strange things. Brown soon finds himself perusing official documents and discovering that this puzzling country is enjoying an astonishing double-digit rate of economic growth, as fast as China’s. If only I had that in Britain, Brown thinks, there would be no need for crazy forecasts.

His next discovery is even more interesting. This strange land and its buoyant economy has no income or corporation tax, no national insurance contributions, no inheritance tax and no capital gains tax. NO TAX!

Brown wakes up in a sweat: heaven had suddenly become hell for the tax-and-spend Chancellor. But it suddenly all comes back. He is not having a nightmare, only dreaming of Dubai – a tiny city state, part of the United Arab Emirates, a country as different from Brown’s crumbling Britain as it is possible to get, a unique cross between a traditional Islamic Middle Eastern emirate and a scene from one of Ayn Rand’s novels.

Last week saw the premature death from a heart attack of Sheikh Maktoum bin Rashed al-Maktoum, the ruler of Dubai and vice-president of the United Arab Emirates. Under the enlightened leadership of Sheikh Maktoum and of his younger brother, Sheikh Mohammed bin Rashid al-­Maktoum, the former Crown prince who for many years had been acting as Dubai’s unofficial chief executive and last week officially became its new ruler, Dubai has been utterly transformed and is now emerging as the financial and tourism centre of the Middle East, as is immediately obvious to any visitor. Dubai’s embrace of globalisation and capitalism will fortunately continue under Sheikh Mohammed.

Three decades ago, the city state was little more than a small oasis at the edge of a desert, best known for its abras boats and gold souks; today Dubai is an astonishing success story. Its population has exploded to 1.2m, up from 490,000 in 1990 and 183,000 in 1970; only 15% of residents are nationals. Dubai is remarkably open to international trade, capital flows and immigration and boasts the most open attitude of any Middle Eastern country towards the West. Its currency has been pegged at the same rate of 3.675 dirhams to the dollar since 1977; there are no capital controls and tax is largely limited to administrative fees and indirect levies on hotel bills and restaurant meals (though banks and oil companies also have to pay some tax on profits).

The Dubai royals have built up a clutch of large companies which they own, the most notable of which is Emirates airline; and an unprecedented property boom was triggered when the country took a major step towards allowing foreigners to buy near-freehold property. Huge artificial islands are being built, including a Palm-shaped complex off Jumeirha beach, extending Dubai’s coastline to provide tens of thousands of new beach front properties.

Special free industrial and trading zones are being expanded, including the Jebel Ali Free Zone, the Internet and Media Cities, the Dubai International Financial Centre, the Airport Free Zone and Maritime City. Companies in the free zones can be fully-owned by foreigners with no need for a local sponsor; staff can be recruited from anywhere in the world; there are no import or export duties; and all profit and capital can be repatriated.

While some argue that the success of companies such as Emirates is due to subsidies from its royal shareholders, this is far from the truth: the airline has enjoyed only $80m (£46.4m, E67.2m) in direct and indirect subsidies in its 20-year history and has paid back $100m in dividends. It makes close to $300m in profits a year and recently made a $9.7bn order for 47 Boeing 777 planes, the largest order for aircraft in aviation history, in a bid to become the world’s biggest long-haul airline by the end of the decade and leapfrog rivals such as British Airways. Most recently, Dubai Ports World agreed to a £3.3bn bid for P&O, the UK ports and ferries group; and Dubai-based companies are snapping up assets in the West, including Madame Tussaud’s waxworks, which has since taken a majority stake in the London Eye, and 230 Park Avenue in New York.

What is most stunning about Dubai is that the importance of its oil and gas sector is little greater than Britain’s – and like North Sea oil, Dubai’s oil is fast running out. The contribution of oil to Dubai’s overall gross domestic product (GDP) was a mere 5.8% last year – which means the non-oil sector, including construction, finance and tourism made up 94.2% of the emirate’s GDP in 2005. Like Hong Kong’s, Dubai’s wealth does not come from natural resources. This is a crucial lesson for the rest of the Middle East, which until now has singularly failed to convert the manna from heaven that is its oil into a sustainable economy.

The Dubai economy grew by 16% in cash terms last year after 16.7% in 2004. In real terms, Dubai probably grew by about 9-10% in 2005, roughly the same rate as China. Dubai’s GDP reached Dh136bn ($37bn) last year. The boom is set to continue in 2006 and the economy could easily reach Dh150bn in 2006, compared with Dh44.7bn in 1996. Dubai’s non-oil GDP grew by 14.92% in 2005, reaching Dh128.4bn. It has grown by 236% in the last decade. Dubai’s oil GDP grew by 18% to Dh7.9bn last year.

Brown as well as his Tory shadow, George Osborne, should fly to Dubai and take a look for themselves at this symbol of a changing world. Not everything Dubai has done could or should be replicated in Britain but its success confirms that embracing capitalism and entrepreneurialism is the only way to get rich. Capital and labour are becoming ever more footloose. Putting up taxes and red tape and bashing big business, as has become fashionable in Britain, is as complacent as it is idiotic.

Already, tens of thousands of westerners have moved to Dubai. As UK taxes keep going up and the economy slows further, more and more talented young Brits will join Dubai’s growing expatriate community in search of tax-free jobs. Unless the British political establishment – Labour, Tory and Liberal Democrat alike – react and fast to the rise of hungry new business centres such as Dubai and understand that Britain’s consensual commitment to an ever larger welfare state is no longer sustainable, it is not only Brown’s sweet dreams that will turn into one long nightmare.