Solving the "tax free UAE" myth

Rumor has it that UAE is a tax free country and the life we lead here is one of luxury and comfort. After all, if those weren't the case, why would so many expatriate workers and foreign investors flock to this tiny Middle East country? Well, I can't speak for everybody, they all have their personal reasons. What I can do instead, is address those long standing myths about taxes in the UAE and clear any doubts about them once and for all.

Myth 1 : My salary is my own. I don't owe income tax to nobody.

Truth : Yes and no. Yes, by UAE law, you are not required to pay personal income tax to the UAE government. Yipee! That's gotta be good news right? Read on. No, because many countries like the US require their citizens and green card holders to report their annual income tax return. So if you're an expatriate like me, check with your local embassy or look online on the foreign workers tax information for your country.That might burst your bubble but hey, better find out now than be sorry later. The good thing  though is that the UAE has signed Avoidance of Double Taxation Agreements with many countries so that expatriates working here don't get stung twice. Here's a list of those countries http://www.dubaifaqs.com/double-taxation-treaties-uae.php.

Myth 2: Setting up a business here is OOOHH-SOOOO-OH-EASY!  

Truth : Mmm, I'll give you the details and you be the judge of that. It's true that there are currently no federal tax legislation in place in the country regarding corporate business, however, each Emirate has its own tax laws. There are currently legislations in force in the Emirates of Abu Dhabi, Dubai and Sharjah establishing a general corporate taxation regime - the Abu Dhabi income tax decree of 1965 (and its amendments), Sharjah Income Tax Decree of 1968 (and amendments) and Dubai income tax decree of 1969 (and amendments). The good news is, in practice, only oil, gas and petrochemical companies and branch offices of foreign banks are required to pay 55% and 20% corporate taxes respectively. Simply put, fiscal legislation is not the same as the fiscal practice. 

No corporate tax? YES! But wait a minute, I got more to tell you. First of all, you can't start a local business without a local partner declaring 55% ownership of it. Say what?!! Unless of course your business is registered in one of the ten Free Trade Zones set by the government. So you see, there's more to setting up a business here than first meets the eye.

Myth 3: There's no VAT in place too.

Truth: True. VAT is not levied on imported goods and products. However, some of the goods coming in are subject to customs duty ( between 1-5%) but so many are exempted from it too. Lately, the International Monetary Fund (IMF) has been calling on UAE to put a VAT in place in order to promote corporate accountability of products produced by the companies involved in the business.

Myth 4 : There's no sales tax in place
            either.

Truth : Sooo False. Just walk into a restaurant or other entertainment place and you'll see a 16% service charge of your total bill. Yep, sales tax is in place and it's got a cute name too : municipal service charge. Unfair right? Yep, the government thinks so too because as of January 2010, the Supreme Committee for Consumer Protection warned restaurants against imposing service charges to the total consumer bill. According to www.ameinfo.com press release dated January 3, 2010, The Supreme Committee for Consumer Protection took this action in order to implement the Consumer Protection law No. 26 for year 2006. What?!! It's been in place for almost 4 years now and it's implementation has only started? Talk about delayed reaction.Hummpp...Still, it's better late than never right? Oh one more thing before you give your wallet a high 5, let me remind you that alcohol sales tax is up to 30% and cigarettes up to 50%. Sucks.  Which is why many expatriates here purchase their liquor and cigarettes from the Dubai Duty Free. Okay. 

Myth 5 : No property taxes. 

Truth : Depends. If you're renting a property (apartment, condo, villa etc.), you are required to pay an annual 5% municipal tax. If you're renting a commercial property, you will then need to pay 10% annually.  But if you own a property and are a non-resident (spend less than 183 days in the UAE), you are not liable to pay tax on the earnings of that same property.

Myth 6 : No capital gains tax, inheritance tax, withholding tax.

Truth : Yes, yes, and yes! At last, some of these rumors prove to be true!

Mmmm...Set free by the truth now, are you?

Breathtaking photos of all things UAE

Pictures that depict the marvelous architectural wonders found all over the country are found in this book. In less than 50 years, the UAE rose from the dunes to become one of the most modern and advanced country in the Middle East. You only have to look at Dubai to see the testament to what I'm saying.

Open the book and read on about how this tiny country in the Middle east became a force to be reckoned with in the Arab world since its foundation almost 40 years ago.

No BARKING

If you have lived here in the UAE for as long as I have, I'm sure you've figured out by now what I'm hinting at in my blog title. But don't worry if you haven't, give it time. You'll find out soon enough first hand how the language barrier in this part of the world can turn serious situations into unforgettable comedic experiences. 

I remember one incident involving my Pa and a policeman back when I was a kid living in Al Ain. Pa was waiting for my mom in the car while she went to get some stuff in the convenience store. Pa repeatedly circled around the parking area in search of a parking space but found none, except for a tiny space near a pavement curve. Our car was a tiny Toyota hatchback that could easily fit in there without blocking the exit. So he parked it there and was waiting patiently for Ma to come back when a policeman approached him. The policeman started spewing Arabic words that Pa didn't understand except for these few memorable words: NO BARKING, yalla ruhh. Rude. Pa looked at him perplexed. Then annoyed. Dude, I wasn't barking. I have never barked in my life and unless I turn into a dog sometime in the future, which is highly unlikely, I don't think I ever will. And if that happens, you can be sure I'll come back , stay right here  and bark at you to my heart's content. Not that Pa ever said that to him. I would have though.

In the Arabic alphabet, the letter "P" is nowhere to be found. So you can expect all the international brands with "P" in their name to undergo a minor but nonetheless obvious name change.  Sbalding, Banasonic, Abble Combuter. The same goes for everything else.  For example, you walk into a restaurant and you hear somebody give his order to the waiter: I want bizza. Big, ok? With beberoni, olives and baynapple. Also, I want esbageti and some Bebsi. See if that doesn't send a new waiter scrambling to get his order translated and done in time.

I've been frequently asked about my nationality too. You Bilibini? And I'd say, Yep, I'm a filipino. They call Philippines Bilibins and Filipinos Bilibini. Was he trying to tell me something here? Is it just me or do u  get the feeling that he's making fun of me too? Billy Beans? Me? No way, I don't even eat beans!

You'll hear similar stuff everywhere in the city. The more you hear it, the more immune you get to their hilarity. Not much fun after a while. But this is just one of the long list of examples where the English language gets lost somewhere in translation. And you'll encounter more as you interact and listen to the sights and sounds of the city.

It's noon here, so I'm gonna go and have my lunch. Bastas. I mean pastas.

Ahihihihihi go now I must, and find the wayward waiter, I will!

Rainy days and monthdays

I just finished my plate of blueberry cheesecake and I'm craving for more. But I already had two pieces, more than enough for tonight, my calorie-conscious mind tells me. You see, I had pizza for dinner yesterday, lamb chops the night before and tonight, blueberry cheesecake - two huge pieces. But I guess it's alright, I can skip on my diet tonight. It's my niece's second monthday after all.And who knows, a rainy day might come and those extra calories will prove to be handy?Like when? Oh I can't think of a good reason now, my belly is full and my lids are drooping. Ask me another time.

Yep, you heard right. It's her second monthday. For those who are new to the term, it simply means today she turns 2 months :-). And tonight, we're celebrating it. And nope, it isn't a tradition but back in my home country, some people do practice this. It's more of a made up reason to make a cake, cook good food and call on close friends for a little get together. The birth of a human life is after all, something to celebrate, and more so in the case of little babies. They just make everyday worth your while.

 Another term that has become popular in the recent years among the new generation is "monthsary". Like monthday is from birthday, monthsary is derived from anniversary. This is used especially among the young people to mark the day they got together with their respective partners. Special dinners and dates are usually reserved for this one date in the calendar.

It's funny how sometimes a month flies by so fast and before you know it, a year has passed. And despite the passage of time and the stresses of everyday life, we are reminded for one day every month to stop our chores, gather our loved ones and share some good food and relaxed conversations. For that one day, don't let the rain in. Be grateful for all that's been given. Be reminded of life's fragility and celebrate it.

Who knows what the next month will hold?

Great weekend, I wish you all!

Mini ME in UAE

Hi, I'm Roxie and I just created my first blog. (Duhh, tell me something I don't know. She just started and she's already boring me!!) that's what most of you guys think. Well, I second the motion, at least the first part of it *wink* I don't want to antagonize my readers now, do I? Besides, I'm here and you're there, sitting alone and prolly bored and you happen to stumble upon my page and started reading. Poor sucker :-P

Before we go full throttle on the insult front, lemme start with an introduction of myself, upon which I humbly bow down my head and say, Asalam, ahlan wa sahlan! :-) I'm Roxie and I'm an expatriate living here in the UAE since 1996. Yep, that's right, I've seen this country grow to the remarkable place it has become today. Tall glass buildings and skycrapers dominate theAbu dhabi,Dubai and Sharjah skyline today. I think it's safe to say that this place holds every superlative found in the world records in the field of construction. The world's tallest building? Burj Khalifa. The world's most expensive hotel? Burj Al Arab. And of course The Palm Islands decorating the seas of Jumeirah, Jebel Ali and Deira are worth mentioning here too. And if that isn't enough to blow you away, then wait until the end of 2010 when the first Ferrari World theme park, a first of its kind in the world, is completed in Yas Island.

Now if you had seen this country back in the '90's, these gigantic feats of architectural and engineering marvels were nowhere to be seen. In fact, you'd never had thought that the concept alone of building these structures in a country largely occupied by desert land was even remotely possible. Now thanks to massive wealth combined with ambitious planning and daring visions, anything is possible here. And I mean it literally ;-)

Now let's get back to my favorite topic: ME :-) Like I said, I grew up here and I have seen how people from totally different cultural backgrounds interact and thrive alongside each other. I had classmates and schoolmates from all continents save Arctic and Antarctica, of course. I guess it's safe to say that the schools I attended were mini branches of United Nations. Admittedly, I wasn't as well informed as I always thought I was because I had friends from countries I had never heard of before meeting them. Belarus and Moldova are just a few of the examples. Belarus...say what?!! Who names a country that sounds like a walrus? Anyway, that's just me. If you're gonna be a follower of my blog, I gotta warn you early on that I am given to outbursts that clearly tell my ignorance about certain issues. Best option for you? Ignore it. I usually return to my sane and rational self after a few minutes of deep breaths. As you've prolly figured out by now, I'm not perfect and I speak bluntly sometimes. But that's the best part of being a blogger. I get to be just me and judgement be damned.

Happy to meet u, I truly am!