Dubai taxes: A quick overview of taxes for US citizens living abroad
Dubai is a place where people of diverse cultures live in harmony. In fact, expats from all corners of the world, including the US, call it home. Besides the attractive pay package, higher disposable income, and lots of business opportunities, Dubai promises an amazing lifestyle, entertainment options, and more. This is what attracts US citizens to move to Dubai for work. However, there’s something else! If you’re here to know about Dubai taxes for US citizens, you’d be pleased to know that Dubai has no federal tax! Yes, you read that right! There’s no income tax, no corporate tax, no sales tax, and there’s certainly no income withholding. However, there’s a 5% VAT. If you have a business and your taxable supplies and imports exceed AED 375,000 per annum, you must register for VAT.
Tax-free living in UAE: Everything you need to know
The United Arab Emirates, or UAE as it is widely referred to as, is the beating heart of finance and business in the Middle East. This has led to a thriving expat community. In fact, if you go by some calculations, this amounts to around 88% of the total population in UAE! Out of this, a major portion of the people are from the US. But if there is no income tax, capital gains tax, or income withholding tax, what taxes do the people living in the country have to pay for?
Almost no one in the UAE has to file for taxes or pay American working in Dubai taxes! This applies to local citizens as well as foreign residents, whether salaried/ employed or self-employed i.e. having their own business. Most businesses are exempt from any and all taxation. However, that being said, you’d still have your US filing obligations. In fact, as a US citizen, no matter where you work, in whichever corner of the world, you’d have to file for living abroad US taxes.
Expat Global Tax: Tax responsibilities for living abroad US taxes
Now, we’ve already discussed that there are no taxes for people to file for in the UAE, but you still have the taxes for living abroad US taxes that you would have to take care of – one the US needs you to address. If you’re new to this, you’ll have to start with form 1040 – the one they call the Individual Income Tax Return, which every US citizen needs to fill up and submit, irrespective of where they live or work. Typically, this has to be filled by April 15th, but we at Expat Global Tax have often found the IRS extending the deadline to June 15 in most cases, and sometimes even till October 15.
The next form that you’d need to fill up is the form 8938. This is for US citizens who own non-US financial assets above certain thresholds. As for the threshold, it depends on your filing status, as well as on whether or not you are a bona fide resident in UAE. There’s one more thing to take care of – form 114, also referred to as the Report of Foreign Bank and Financial Accounts or Report of Foreign Bank and Financial Accounts. This has to be filled if you possess/ possessed at least $10,000 in one or multiple non-US bank accounts, during the financial year for which you are filing. All that being said, the US offers potential tax credits and deductions for expats, but for more on that, you’d have to connect with CPA experts who handle expat Dubai taxes for US citizens. This is where we at Expat Global Tax come in.
Want to maximize savings from expat taxes? Say no more!
Not sure when and how to proceed with your living abroad US taxes? Fear not, we’ve got your back! At Expat Global Tax, we know how to navigate the IRS deadlines, maximize tax credits, and boost your savings in the process. Connect with the experts, now!
Why choose us to file Dubai taxes for US citizens?
Expertise in US and UAE tax laws: We at Expat Global Tax are uniquely positioned to navigate the complex synergy of US and UAE tax laws. Our team of CPA professionals have years of experience in handling tax obligations for US citizens/ American expats.
Maximization of tax benefits: Our team is adept and equipped to handle the finer aspects of tax treaties between the US and UAE, which allows us to help you maximize your tax benefits. We use provisions such as FEIE and Foreign Tax Credit to minimize your tax liabilities.
Personalized guidance all through: From the very beginning, we’ve always been very client-centric, thereby offering personalized guidance to all. Whether you’re a salaried employee, a business owner, or an investor, we can help everyone.
Tax planning and compliance: From filing form 1040 and FBAR to handling complex issues like foreign asset reporting, our team knows how to streamline the process. We prioritize proactive tax planning, so that we never have to do a rush job.
