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Dubai imposes 20% tax on foreign banks outside of DIFC: Vice President and Dubai’s ruler Sheikh Mohammed bin Rashid al Maktoum has issued a new law levying a 20% annual tax on the income of all foreign banks operating in Dubai, with the exception of those operating in the Dubai International Finance Center (DIFC), according to an X post by the Dubai Media Office. The tax will also be levied on banks operating in special development and freezones, according to the statement.
Critically: The 20% tax includes the 9% corporate tax which went into effect last year, and which marked the end of the UAE’s no-tax status.
The tax is not exactly new: Foreign banks have always been subject to a 20% tax, levied under separate emirate-level tax decrees, according to PwC. This is the first emirate-level decree to explicitly include other special economic zones and to clarify the interaction between the 9% corporate tax and the income tax levied on foreign banks that we’ve heard of.
