How do you account for Dubai income in your country?

Dubai income in your own country

Accounting for Dubai income in your home country requires consideration of tax residency rules. Where to pay taxes and how to account for Dubai income in your country is determined by the residency rule, i.e. where you live for tax purposes. Typically, individuals who are tax resident in their country have unlimited tax liability, meaning that they must account in their country for income earned around the world, including working in Dubai full of world-famous attractions in Dubai.

Taxation of Dubai income in your home country is therefore directly related to your residency status. For example, if you live in Poland and the centre of your life interests is located here, you are subject to tax liability in the country. At the same time, working abroad, e.g. in Dubai, may be covered by international double taxation treaties, which regulate where you must pay tax.

Taxes in your home country versus working abroad is a topic that requires a detailed analysis of your individual tax situation and consultation with a tax advisor. In the following article, you will learn the answer to the question - do you have to pay income tax in your home country for income from Dubai?

Tax resident income from Dubai

‘Tax resident income from Dubai’ - this aspect is worth looking into. A tax resident is a person who is domiciled for tax purposes in a particular country, usually his or her home country. This means that, regardless of where the income is earned, he or she is liable to tax in his or her home country. In the case of Dubai-based income earners, the applicable regulations require such earnings to be included in the annual tax return if the tax resident maintains personal or economic ties to his or her country.

Do I have to account for Dubai income in my home country?

Do I have to account for Dubai income in my home country? What are the rules for accounting for Dubai income in your home country? This depends on your tax residency status and the tax rules in your country. Usually, the centre of vital interests - residence, family or main source of income - is the decisive factor.

It is a good idea to learn about the tax laws in your country, as well as the exact advantages of tax residency. However, it is virtually impossible for foreigners to obtain UAE citizenship on theirown, meaning that most expats may still be required to settle their income in the country.

What taxes do you pay in your home country on Dubai income? There is zero personal income tax (PIT) in the Emirates, which is a major advantage of working in the region. However, those with personal or business connections to a number of other countries, such as Poland, may be subject to income tax in their home country, such as Poland. Those who live in the UAE for more than 183 days a year, but have not moved their centre of vital interests out of their country, are at risk of double taxation.

What international agreements does your country have regarding Dubai taxation? Protection against double taxation can be provided by an agreement signed between your country and the Emirates. Usually, however, specific conditions need to be met in order to benefit from it, including a permanent relocation of residence to Dubai. Moving out of your country may not be enough - a complete relocation of your centre of vital interests to another country is crucial.

Do I have to pay taxes in my country for working in Dubai?

Do I have to pay taxes in my country for working in Dubai? Yes, as we mentioned - it depends on your tax situation and residency status. For example, in Poland, there is an unlimited tax liability rule, which means that people who are resident for tax purposes in Poland have to settle all their income, both domestic and foreign. This includes taxes on income from Dubai in Poland.

A tax credit on foreign income can help avoid double taxation. It makes it possible, in some cases, to exclude Dubai income from the tax base in one's home country or to use the pro-rata deduction method. This applies primarily to personal income tax (PIT).

It is worth mentioning the abolition relief, which allows to avoid double taxation. In this case, you must check whether your country, enforces and recognises such an allowance. This relief applies to income (earnings) earned abroad from a business relationship, employment, economic activity and activities performed personally, taxed according to the tax scale, flat tax or a lump-sum tax on registered income. For example, thanks to the abolition relief, the amount of tax due in Poland may be reduced accordingly, which often leads to a real exemption of foreign income from taxation in Poland.

Settlement of tax on work in Dubai in your own country

Settling Dubai work tax in one's home country is an important issue for those who earn income abroad while being tax resident in their home country. The key questions are - how do you account for Dubai work income in your home country and how do you account for Dubai salary in your home country? For example, Polish tax residents who earn in Dubai need to be aware that their salary from Dubai in Poland may be taxable if they do not have a resolved double taxation treaty and a clear centre of vital interest case presented.

What documents are needed to settle Dubai income in your country? In order to properly settle your income, you will need to prepare: a certificate of income earned in Dubai issued by your employer there, a document confirming your tax residency status (e.g. a UAE tax residency certificate) and information on your gross salary and any deductions or taxes (although PIT is not applicable in Dubai).

If your income is settled in your home country, your PIT return should include relevant tax reliefs, such as the abolition relief, which helps you avoid additional charges.

Questions and answers (FAQ)

• Do I have to pay taxes in my home country for working in Dubai?

This depends on your tax residency status. If you are still tax resident in your home country, you are required to settle all foreign income, including Dubai, in your home country. The centre of vital interests - residence, family or main source of income - is decisive.

• What documents are needed to settle Dubai income in your country?

In order to settle your income, you will need to prepare a certificate of income earned in Dubai issued by your employer there, a document confirming your tax residency status and information about your gross salary and any deductions or taxes.

• How to avoid double taxation on Dubai income?

The abatement allowance avoids double taxation. This relief applies to income (earnings) earned abroad from a business relationship, employment, business and personal activities, taxed according to the tax scale, flat tax or lump sum on registered income. For example, thanks to the abolition relief, the amount of tax due in Poland may be reduced accordingly, which often leads to a real exemption of foreign income from taxation in Poland.