Dubai has released Administrative Decree No. 107 of 2024, detailing the application of a 20% annual tax on foreign banks’ taxable income.
The tax applies to all foreign banks operating in Dubai, including those in special development and free zones, but excludes income earned through the Dubai Financial Center. Foreign banks subject to the UAE’s 9% Corporate Tax can deduct it from the Dubai bank tax, resulting in an effective tax rate of 11%.
The decree outlines rules for calculating the tax base, covering income, expenses, gains, losses, depreciation, and amortisation. Tax returns and supporting documents must be submitted within nine months of the tax period’s conclusion and must be certified by an external auditor and a responsible employee.
The first tax period starts on 1 January 2024, with tax payments due within three months after the period ends.
