A 20% tax for banks is being introduced for all foreign banks operating in Dubai, including special development zones and free zones, but excluding those licensed to operate in the International Financial Center

The emirate of Dubai is introducing a 20% annual tax for foreign banks, according to the website of UAE Prime Minister and Emir of Dubai Sheikh Mohammed bin Rashid Al Maktoum.

"The law stipulates that an annual tax of 20 percent is levied on foreign banks on their taxable income, and a percentage of corporate tax is deducted from this percentage [if the bank pays it]," the report said.

"The law stipulates that an annual tax of 20% is levied on foreign banks on their taxable income, and a percentage of corporate tax is deducted from this percentage [if the bank pays it]," it said.

Corporate tax in the UAE was introduced on June 1 last year. Its rate is 9%. It is paid by both residents and non-residents, both legal entities and individuals. Exceptions are government agencies, mining companies, religious and cultural organizations.

The law on 20% tax for banks will become effective in the tax year following the year of its adoption.

The law applies to all foreign banks operating in Dubai, including special development zones and free zones, with the exception of foreign banks licensed to operate in the Dubai International Financial Centre (DIFC).

A fine may be imposed for violating the law, but not more than 500 thousand dirhams (more than 12 million rubles at the exchange rate at the time of publication). In case of repeated violations within two years, the fine may be doubled.