New Tax for Foreign Banks in Dubai
Dubai ‘s foreign banks are facing a new 20% tax, issued by Dubai’s hereditary ruler, Sheikh Mohammed bin Rashid al-Maktoum.
The tax applies to all foreign banks operating in Dubai, with the exception of institutions licensed to operate in the Dubai International Financial Centre (DIFC).
Under the new law, foreign banks will be subject to a 20% tax on their annual taxable income. If banks are already paying corporate tax in accordance with the law, the amount will be deducted from their total tax liability.
In February, it was reported that UAE banks, due to the risk of secondary sanctions, had restricted transactions with Russia and begun closing accounts for companies and individuals.
Three businessmen with offices in the UAE noted that the difficulties began long before the US President’s decree on secondary sanctions was issued in December 2023.
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