View of part of the Fujairah Corniche and the Hajar Mountains in the Background

Monday, November 19, 2007

UAE Has the Lowest Tax Rates in the World

The British Times Online says today:

“Workers seeking out the lowest tax rates in the world should head to Dubai, Russia or Hong Kong, according to a league table of the world’s most attractive personal tax hot spots.”

“Residents in the United Arab Emirates (UAE) receive the highest net income at 95 per cent of their gross salary, while expatriates in Russia and Hong Kong pay 13 per cent and 14.2 per cent in tax respectively, according to Mercer, the business consultancy behind the survey.”

“Markus Wiesner, head of operations in Dubai for Mercer, said: “We often find that the UAE’s zero taxation is a strong draw for expatriates on short-term assignments. For three to five years, young professionals can fast-track their savings to afford a mortgage when they return home, while senior executives can maximise their savings potential ahead of retirement.”

Married people with children almost universally pay the least tax, followed by married people with no children. Single workers foot the biggest tax bills across the world, the figures showed.

“The UAE ranks highly because it does not apply any income tax at all and only levies a charge of 5 per cent in social security contributions on local citizens. Russia applies a flat income tax of 13 per cent, while Hong Kong applies a rate of 14.2 per cent in tax and social security contributions.”

The full report and to see how countries rank on the Income Tax scale see:
Rebecca O’Connor, ‘Head to Dubai for the lowest tax rates in the world’, Times Online, November 19, 2007.

Image: UAE dirhams.