Are you looking for a US taxation service in the United Arab Emirates?
Need help with your US tax planning?
Facing challenges with US expat tax filing?
Are you having questions about US income tax for expats?
Meet Your Trusted US Tax Accountant and US Expat Tax Guide in the Dubai, UAE
If you are a US expat or you are simply residing in UAE while being exposed to the US taxation system, it can often be difficult to deal with your taxes all by yourself.
From many of our clients who are either US citizens or US Green Card holders living in the United Arab Emirates we often hear complaints that filing US taxes from abroad is not straightforward and at times can be frustrating.
The Leader of our US Tax Team has successfully completed the Comparative Tax Program at Harvard University. Read more…
Our US Tax Expertise Includes:
Individual clients come to us with complex, multi-jurisdiction tax issues related to cross-border employment and investment opportunities. Similar to an interpreter or guide who helps travelers understand the language and customs of a particular country, we explain tax concepts and laws that are foreign to our clients. We prepare U.S. federal and state income tax returns for U.S. expatriates, foreign nationals and individuals with international financial interests.
Our international tax consulting expertise includes analysis of tax treaties, sourcing of income, and reporting of foreign bank accounts, as well as foreign corporations, partnerships and trusts. As consultants, we help individual clients develop cost-effective strategies, propose solutions and prepare individual tax projections. We also work closely with our clients’ attorneys and other advisors to provide comprehensive advice
We have significant experience assisting our clients with complicated, international tax issues.
The following list represents some of the areas in which we have provided both planning and compliance services for our clients:
- US shareholders of foreign corporations
- US partners in foreign partnerships
- US grantors and beneficiaries of foreign trusts
- US shareholders of Passive Foreign Investment Companies (PFICS)
- Reporting for Foreign Bank and Financial Accounts (FBARs)
- Blocked income reporting for deferral of tax in currency restriction situations
- Donations to foreign charities by US private foundations via expenditure responsibility grants
- Income tax treaty analysis for various issues including determination of residency, re-sourcing of income to avoid double taxation, reduction or exemption of tax
- Determination of residency for income tax purposes for foreign nationals including optimization of elections for first and last year of residency
- Social Security tax implications to compensation of foreign nationals and US expatriates including application and analysis of Totalization agreements
- Foreign tax credit optimization including analysis of paid versus accrued methods and maximizing foreign source income
- Optimization for US expatriates including analysis of foreign tax credit versus foreign earned income exclusions
- Reporting of foreign rental properties including proper depreciation methods and treatment of rental of a principal residence
- Reporting and planning for US real property interests by nonresidents including applications for reduction/exemption from withholding on sale proceeds
- Reporting and planning for nonresidents with US investments or US effectively-connected income
- State residency and domicile issues for foreign nationals and US expatriates
- Reporting gifts and inheritances from nonresidents
- Consulting to employers of international assignees relating to tax equalization policy development and application, tax planning for international assignments including coordination with tax advisors in local jurisdictions, compensation structuring, payroll reporting and employee education and tax return preparation
- Determination of residency for US citizens in US possessions
- Given the uniqueness of the U.S. Tax Code, we are perfectly positioned to assist American Citizens, American Permanent Residents (Green Card holders) and American companies who want to expand to Asia with:
- Incorporation and corporate structuring
- Annual returns for both Asia and the United States
- Work passes across the region
- Corporate secretarial and full accounting services
For American Citizens, American Permanent Residents (Green Card holders) and American companies already in Asia and Europe, we can assist with U.S. tax issues including -
- US Tax Amnesty – both Offshore Voluntary Disclosure (OVDP) and US Streamlined Tax Amnesty
- FATCA compliance including Form 8966, W-8 Ben-E and entity analysis
- Reporting of foreign companies, partnerships and foreign trusts
- Passive Foreign Investment Companies (PFICs)
- Foreign Bank Account Reporting (FBARs)
- Pre-immigration Tax Planning
- Cross border tax planning
- Expat Salary negotiation
- Corporate structuring
- ITINs (U.S. Tax IDs)
- Ordinary 1040s
As an American or Green Card holder living in the UAE
As an American or Green Card holder living in the UAE, taking care of your U.S. taxes can feel like a complicated task. Knowing which tax rules affect you and understanding your options is a lot to stay on top of.
Living in Dubai and the UAE (United Arab Emirates) is an incredible experience for a variety of reasons – the architecture, culture, nightlife, and shopping to name but a few. As an American expatriate living in Dubai or the UAE though, what exactly do you need to know regarding filing US expat taxes?
For thousands of U.S. citizens working in the UAE, filing U.S. taxes comes with new considerations and questions: “Do I have additional information to report to the IRS? How do my Dubai financial accounts affect my filing? What options do I have to reduce my tax bill? How do I file U.S. taxes from the UAE?"
For starters, Americans and U.S. Green Card holders living in the UAE should continue to file a U.S. tax return each year. Working as a U.S. citizen in the UAE can affect your taxes even if you don’t stay for very long. For example, if you earn income while on a short-term assignment, you’ll need to report that income on your U.S. taxes. As you establish deeper financial roots in the UAE, you’ll have more considerations for your American tax filing.
You may need to report your UAE financial accounts and assets. Generally, U.S. taxpayers with more than $10,000 in foreign bank or financial accounts are subject to FBAR filing and reporting requirements. You may also be subject to FATCA reporting requirements if you have assets valued at $200,000 and higher.
All US citizens and green card holders who earn more than $12,550 (in 2021, or just $400 of self-employment income or just $5 if you’re married to a foreigner) anywhere in the world are required to file a US federal tax return and pay taxes to the IRS, regardless of where in the world they live or where their income originates.
The good news is that there is no income tax in Dubai or the UAE. None As an American in the UAE, you’ll only need to file taxes on the U.S. side as the UAE doesn’t tax income.
US taxes – what you need to know
If you earned more than US$12,550 (in 2021, or $400 of self-employment income etc), you are required to file Form 1040. While taxes are still due by April 15, expats get an automatic filing extension until June 15, which can be extended further online until October 15.
If you have foreign assets worth more than US$200,000 (per person), excluding your home if it is owned in your own name, you must also declare them on form 8938.
If you had at least US$10,000 in one or more foreign accounts at any time during the tax year, you also have to file FinCEN form 114, also known as a Foreign Bank Account Report or FBAR for short.
For many Americans working in Dubai or the UAE it’s worth claiming the Foreign Earned Income Exclusion, which allows you exclude the first around US$100,000 of foreign earned income from US tax if you can demonstrate to the IRS that you are a UAE resident. Be aware though that even if you don’t owe any tax to the IRS.
The US and UAE governments share taxpayer info, while UAE banks pass on US account holders’ account info to the IRS, so don’t consider not filing or not fully disclosing your income on your return. The penalties for tax evasion for expats are severe to say the least.
If you’re a US citizen, green card holder, or US/UAE dual citizen, and you have been living in Dubai or the UAE but didn’t know you had to file a US tax return, don’t worry: there’s a program called the IRS Streamlined Procedure that lets you catch up with your filing without facing any penalties. Don’t delay though, as the IRS might find you first.
Dubaian taxes – what you need to know
The United Arab Emirates is a collection of oil-rich family-owned mini-kingdoms. With relatively small populations and spending requirements compared to their wealth, they simply don’t need to levy income taxes. Other taxes include 5% VAT, 10% on hotels and entertainment, 10% on rental revenues from commercial property, and 5% on rental revenues from residential property. Foreign oil companies and banks also pay corporation tax.
We strongly recommend that if you have any doubts or questions about your tax filing situation as a US expat living in Dubai that you contact a US expat tax specialist.
Value Added Tax in UAE
Value Added Tax (VAT) was introduced in the UAE on 1 January 2018. The rate of VAT is 5%. VAT will provide the UAE with a new source of income which will be continued to be utilised to provide high-quality public services. It will also help government move towards its vision of reducing dependence on oil and other hydrocarbons as a source of revenue.
A business must register for VAT if its taxable supplies and imports exceed AED 375,000 per annum. It is optional for businesses whose supplies and imports exceed AED 187,500 per annum.
A business house pays the government, the tax that it collects from its customers. At the same time, it receives a refund from the government on tax that it has paid to its suppliers.
Foreign businesses may also recover the VAT they incur when visiting the UAE.