His Highness Sheikh Mohammed bin Rashid Al Maktoum, Ruler of Dubai and Vice President and Prime Minister of the UAE issues Law No. (1) of 2024 introducing a new tax on foreign banks operating in Dubai.
The law, applicable to all foreign banks in the city except those in the Dubai International Financial Centre (DIFC), imposes a 20% tax on their annual taxable income.
The legislation outlines principles for calculating taxable income, tax filing, payment procedures, audit protocols, and voluntary disclosure. It details the rights of foreign banks and their Central Bank of the UAE-licensed branches.
The Chairman of The Executive Council of Dubai determines penalties for violations, capping them at AED 500,000 ($136,100), with a doubling for repeat offences within two years, up to a maximum of AED 1M ($272,200).
Effective from the tax year following enactment, the Director-General of the Department of Finance will issue necessary decisions for implementation, published in the Official Gazette. Law No. (1) of 2024 supersedes Regulation No. (2) of 1996 and conflicting legislation.
Decisions and memos implementing Regulation No. (2) of 1996 will remain valid until replaced by new decisions. Law No. (1) of 2024 takes effect upon publication in the Official Gazette, according to Arabian Business.
