UAE: New proposed law on taxation of foreign banks (Dubai)

The government issued new Law No. (1) of 2024 on the taxation of foreign banks operating in the emirate of Dubai.

The new law, which would annul Regulation No. (2) of 1996, would apply to all foreign banks operating in Dubai, including special development zones and free zones. However, foreign banks licensed to operate in the Dubai International Financial Centre (DIFC) would be excluded in relation to income earned from within or through DIFC.

The new law provides for an annual tax rate of 20% to be imposed on foreign banks on their taxable income. However, if the foreign bank pays corporate tax in accordance with Federal Law No. (47) of 2022, the amount of corporate tax paid would be granted as a deduction from its total tax liability. The new law also provides rules for calculating taxable income and filing the tax return. It also details the procedures for tax return submission, voluntary disclosures, penalties and the responsibilities and processes related to tax auditing.

The new law is proposed to apply for the tax periods beginning after 8 March 2024.

Read a March 2024 report [PDF 292 KB] prepared by the KPMG member firm in the UAE