Dubai ends double taxation for foreign banks

Dubai ends double taxation for foreign banks

Foreign banks including HSBC, Banque Misr and Arab Bank operating in Dubai will no longer face double taxation after a change in the emirate’s banking laws. A 9 percent corporate tax, introduced in June last year for corporations and businesses that have a taxable profit above AED375,000 ($100,000) was being applied on top of the […]

Corporate tax absorbed into banking tax

Banks in DIFC unaffected

Net tax liability ‘should not increase’

Foreign banks including HSBC, Banque Misr and Arab Bank operating in Dubai will no longer face double taxation after a change in the emirate’s banking laws.

A 9 percent corporate tax, introduced in June last year for corporations and businesses that have a taxable profit above AED375,000 ($100,000) was being applied on top of the 20 percent tax on foreign banks that was introduced in 1996.

Now foreign banks operating in the mainland and special development zones will be able to absorb their corporate tax payments into the annual 20 percent banking tax charge.

NewsletterGet the Best of AGBI delivered straight to your inbox every week

Foreign banks licensed in the Dubai International Financial Centre (DIFC) free zone are exempt from the 20 percent tax.

Thomas Vanhee, a partner at Aurifer Middle East Tax Consutancy, said the