1.32 PM Thursday, 28 March 2024
  • City Fajr Shuruq Duhr Asr Magrib Isha
  • Dubai 04:57 06:11 12:27 15:53 18:37 19:51
28 March 2024

Americans in UAE exempt from paying tax? Click here to find out

95% of the 700 people had not paid any tax after finding that their incomes did not meet the requirements to pay tax, according to Ahmed Mohamed, the Managing Partner of the US Financial Audit Firm in Dubai. (Supplied)

Published
By Mohammed El Sadafy

At least 45,000 people have benefitted from the IRS Amnesty programme of the Internal Revenue Service (IRS) of the United States federal government until 2015.

The IRS collected $6.5 billion (Dh23.87bn), according to Ahmed Mohamed, the Managing Partner of the US Financial Audit Firm in Dubai.

Seven hundred Americans in the UAE clarified and settled their tax situations through the US Financial Audit Firm in Dubai, he said and added that 95 per cent of the 700 people had not paid any tax after finding that their incomes did not meet the requirements to pay tax.

“The US Federal Government has exempt its citizens whose incomes are less than $97,600 annually from paying taxes,” said Ahmed Mohammed.

However, scores of people who have settled their taxes were either unaware of the rule or did not know the authorised departments which they could go to, he added.

Mohamed said authorised offices to settle US taxes can also legally reduce the value of tax by reducing the taxable income to a minimum.

In 2014, the US Government imposed on its citizens a 30-per cent tax on those whose income is more than $97,600 and citizens were required to provide tax returns for the past years.

This tax applies on American nationals and owners of companies from America according to their ratios in these companies.

He added the US government has signed agreements with the majority of world governments to provide information about the same to American residents in their countries.

A treaty to the effect was signed by the US government and the UAE Government - represented by the Central Bank and other banks operating in the UAE – on May 2, 2014, Mohamed explained.

The US tax leniency programme gives US citizens an opportunity to file in their tax returns in accordance with their income and profits from property recorded in their accounts in banks all over the world.

Tax evaders

As per US law, tax evaders will have their bank accounts frozen within and outside the US. They could also be detained at airports and may face prison terms between three and seven years.

Haitham Bassiouni, Regional Director, US Financial Audit Firm in Dubai, estimated there are about 300,000 Gulf American citizens, including 200,000 in Saudi Arabia alone.

Dubai regional office

The US FAAF chose to open the regional office of the US Financial Audit Firm in Dubai due to the facilities the government here provides to the business sector, apart from the presence of a large number of American citizens and green card holders in the UAE.

Bassiouni also appreciated the cooperation of banking authorities in the UAE with the IRS with regards sharing information about tax evaders and freezing their accounts.

Four categories

Considering the cases that settled their taxes through the regional office, American citizens can be divided into four classes.

While about 50 per cent of Americans are committed towards filing their taxes, there are others who need to be reminded and wait until the bank pressurizes them to by freezing their accounts.

A third group of people relinquish their US citizenship and often retreat from the idea after discovering that their income is not subjected to taxes. And there are yet others who are ignorant and are not aware of their tax duties and will be surprised when their accounts are frozen or receiving arrest warrants when entering any US airport.

Bassiouni confirmed that those wishing to waive their US citizenship will not be allowed to relinquish their American nationalities unless they have paid their taxes.

He emphasised that taxes are not counted on the assets of the individual but on the income and profits made.

For instance, is a person owns an apartment and has rented it out then the value of the rent would be considered as his income and that is taxable. Similarly, if a person owns a mall or a real estate, in such cases taxes will not be counted only after financial asset monetization and entry into his bank account.

According to the US Government, Americans have invested about $7.6 trillion outside the US and the total taxes paid by Americans abroad is more than $100 billion annually.

Bassiouni advised all the Americans and green card holders to speed up their measures and review their tax situations where after quick review of their incomes it has been discovered that most of them are exempt from taxes.

For more information, visit