The holiday paradise of Dubai?
In recent years, influencers have broken up their tents in Germany and packed their things to live abroad in the future. They are often drawn to the Middle East, where they move into chic apartments and houses and enjoy life in the holiday paradise every day. But what is behind the emigration intentions of the more or less famous Dubai residents? Because it is questionable whether it is due to the wonderful weather and the picturesque beaches or whether a lot of German influencers are being drawn to the Persian Gulf to save money. But do you really save that much tax in Dubai?
How many taxes do you really pay in Dubai?
Jan Böhmermann, presenter of the TV show “ZDF Magazin Royale”, recently dealt with the number of German influencers who emigrated to Dubai to advertise the supposed paradise there and to top up their accounts. Because according to Böhmermann “with German reach, money would be earned in Dubai, but no tax would be paid”. In fact, you hardly pay any taxes in Dubai, because there is no income tax whatsoever. While German influencers in the Middle East can dispose of almost their entire income freely, in Germany they have to give up an impressive 42 percent of their salary from an income of 57,052 euros.
The tax haven of Dubai?
In Dubai, not only is there no income tax – the pension and capital income, such as dividends, interest and capital gains, do not have to be taxed either. But the residents of the city save even more money, because no tax is levied on owning real estate. In addition, there is no tax to be paid on inheritances and gifts. What sounds to many like the tax haven come true is only partly true, because Dubai is not completely tax-free despite everything.
Dubai is not tax-exempt
Even if you can save a lot of money in Dubai, the city in the Middle East is not completely tax-free, because some taxes still have to be paid. For example, when real estate is resold, a four percent transfer fee is charged for real estate transactions. However, this is usually paid by the buyer. In addition, there has also been a VAT in Dubai since January 1, 2018. Nevertheless, this is significantly lower compared to VAT in Germany, because while we have to pay 19 percent in this country, it is just five percent in the United Arab Emirates.
Legal hurdles in Dubai
Although Dubai appears to be an extremely attractive place to live, especially for the self-employed, there are still some legal hurdles, because anyone who wants to live and work in Dubai needs a license from the “National Media Council”. In addition, various media reports repeatedly that it is mandatory to sign a kind of “propaganda contract”. Nothing has been confirmed so far, but if one can believe the reports such as that of Jan Böhmermann, then this contract includes that new citizens of Dubai are not allowed to express themselves on religious or political matters or about heads of state. On top of that, they should ensure a “positive image” of the city, which can be implemented, for example, in the form of advertising via social media.
Finanzen.net editorial team
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