Everyone knows that you don’t have to pay income tax if you work in Dubai. This is unlikely to change for the foreseeable future, as it’s one of the many reasons to live in Dubai. It’s a tax-free country and has a reputation for it.
But you may not know about the other ‘stealth’ taxes that you have to pay regardless. The Dubai government has to make money, and if it’s not from your income, then it has to come from somewhere.
Here are some Dubai taxes that you may be paying – and sometimes not knowing about it.
1 – Hotels
If you stay in a hotel, then 10% is added on to your bill – this is a 10% municipal tax – and it’s even added on to your meals.
2 – Alcohol
Naturally you don’t find much alcohol in the Emirate, but imports are subject to punitive taxes. If you want to bring alcohol into Dubai, it will cost you 50%, and there’s a further 30% on top for the purchase of alcohol for home consumption.
3 – Rental tax
If you’re making an income from renting out a property, then you will be subject to a tax. It’s 10% for commercial properties, and 5% for residential properties, so not the biggest tax in the world, but one to know about for sure.
4 – Salik
Salik is the Dubai road toll system. Every time you pass through a road toll, you are charged AED 4 – and this is uncapped, so you could pay that multiple times depending on how many tolls you pass through.
5 – Utility Bills
There have been protests against this ‘council tax’ which is levied against utility bills. Theoretically it’s to help pay for street lights and rubbish collections, but many residents already pay for this in their maintenance fees along with their rent. However, you will expect a tax to be taken, very quietly, from your utility bills.
There have been suggestions recently that Dubai will introduce VAT. There are plans for a 5% rate of VAT to be added to food items, with health and education exempt. This should generate around AED 12bn tax revenue across the UAE.
So there are taxes to be paid in Dubai – it’s just that you often don’t notice them. However, they’re no different from taxes paid elsewhere, and are often lower – but so long as Dubai remains free of income-tax, it will always be a popular destination, whether that is people wanting to buy in Dubai or rent in Dubai.