Dubai Taxation

Dubai Taxation

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Hi

Last week a couple of clients advised that they are going to work in Ireland and other going to Tunisia and this week another client has been offered a 2-3 year contract in Dubai!  Foreign tax is not my strength!!!!

After getting my head around Irish taxation, I am now after some advice about Dubai taxation.

My client had been offered a contract ex pat, and wishes to leave his limited company open, which i advised should not be a problem as i can carry forward the balance sheet and submit dormant accounts!

My client has advised that the would be no tax to pay if he goes to Dubai - is this true?  I need to check how he is getting paid, if he is to be an employee (a presumption at this time) he will still have to submit a self assessment due to his domicile and residency.

Can anyone enlighten me to the pros and cons of him working in Dubai, i am not sure if he is taking his family out or how often he will be returning to the UK, i need to get this info when we have a meeting this afternoon, but if there are any other questions i need to think of I would be greatly appreciative.

Thanks in advance for any guidance.

Replies (5)

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Rachel Davies
By Rachel Davies
13th Mar 2014 11:36

You need to undertand the UK position before even thinking about foreign tax. You say "if he is to be an employee (a presumption at this time) he will still have to submit a self assessment due to his domicile and residency." but if he is going for 2-3 years he will likely be non resident for much of the time. You need to look at the SRT to determine his UK residency status, split year treatment eligibility etc and what other income he has (e.g. from UK property) and where and how it will be taxed. Also need to establish how much time he will spend back in the UK during the period. There is no income tax in Dubai but the cost of living is high so if it's employment he needs to establish if he will get any relocation or living expense allowances etc. TBH if you don't know what questions to ask you will have difficulty advising him on this.

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By A E Scott
13th Mar 2014 12:26

This is a great start thank you, I only had a brief 5 minute chat on the phone earlier today, so could not get all of the info.

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By A E Scott
13th Mar 2014 14:43

Ok so i have just had a meeting with my client about his intentions going forward.

The UK position, their house will not be rented out as his wife (also director of ltd company) and children will be coming home during the holidays.  They will live in Dubai during school term time.

His UK Ltd company will still be trading as there will be about £2k a month worth of revenue, he will need to travel back to the UK to attend to these matters, his children will use the 2 travels allowable per year through the company to travel to see him also, and the rest will be payable by my client individually.

In Dubai he will be getting around £60k plus housing, school education, pupa, car, fuel etc, he will be looking to remit about £30K at the most back into the UK to pay for their mortgage, insurance fuel food etc when back in the UK, he will spend the other £30k in Dubai or remit at a later time depending on their tax position in the UK.

Is there anything that I have missed

Thanks

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By Exector
13th Mar 2014 16:55

You need to do some leg work

I would like to associate my comments to the remarks of the previous speaker. YOU need to assess the UK Residency position.Here's a place to start: http://search2.hmrc.gov.uk/kb5/hmrc/forms/view.page?record=YdWGuSSGR24&formId=7405    RDR1 or get somebody in if Beyond your Ken (Ooh stop messing about)

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Rachel Davies
By Rachel Davies
14th Mar 2014 07:40

The extra information shows this is more complex than first thought given he has his own company and will keep it going. You may now need to consider its residency as well as his. And what about his wife? The level of work in the uk can affect his residency. For me this is too complex to answer here, it needs a proper review.

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