• Malik, Bur Dubai, UAE

Withholding Tax (WHT)

Withholding Tax (WHT)

What is Withholding Tax (WHT)?

Companies that transact across borders must evaluate the withholding tax impact, treaty benefits and cross-border compliance obligations. While the UAE most recent withholding tax rate on cross-border payments is 0%. Companies in UAE may be facing withholding tax exposure in other GCC and foreign countries in connection with making and receiving payments such as dividends, interest, royalties and services fees.

 

Business Tax in UAE (BTU) offers expert Withholding Tax in UAE advising service to support clients in identifying withholding tax exposure, evaluating treaty eligibility, structuring cross-border transactions and meeting the international compliance obligations.

 

Withholding tax (WHT) is a tax that is deducted at source by the payer before a payment is made to a non-resident recipient. The present Withholding Tax rate at the source under the UAE Corporate Tax regime, Federal Decree-Law No. 47 of 2022 (as amended), is typically 0% for most UAE-sourced income liable for this tax paid to non-residents (where the income is not attributable to a Permanent Establishment). This is the position endorsed by the Federal Tax Authority (FTA) and Ministry of Finance.

 

Payments regularly reviewed in relation to withholding tax include:
  • Dividends
  • Interest payments
  • Royalties
  • Technical service
  • Management services
  • Professional services
  • Commission payments

Who Is Affected by Withholding Tax in UAE?

Withholding tax advice is particularly relevant to:
  • UAE entities paying foreign suppliers
  • Companies paying royalties or licence fees
  • Companies receiving overseas subsidiary income
  • Multinationals and related party transactions
  • Importer-exporter and intra-regional trading businesses
  • Multijurisdictional professional service firms.
Strong Focus
Strong focus on compliance and risk reduction
Dedicated Support
Dedicated support for ongoing tax requirements

Our Key Withholding Tax Advisory Services

  • WHT Applicability Review: Assessment of the applicability of withholding tax on cross border payments under UAE Corporate tax law
  • Double Tax Treaty (DTT) Review: Evaluation of treaty benefits and reduced withholding tax rates under UAE’s extensive tax treaty network.
  • Tax Residency Certificate Support: We can assist in preparing Tax Residency Certificates where required to claim treaty relief.
  • Structuring of Cross Border Payments: Review of transaction structures to minimise withholding tax exposure.
  • GCC Withholding Tax Advisory: Advice related to transactions with GCC jurisdictions where withholding tax rules applies.
  • On-going International Tax Advisory: continuous support for businesses with recurring international payments.

Withholding Tax in UAE and GCC – Key Comparison

CountryWHT RateApplies To
UAE0%Not applicable
Bahrain0%Not applicable
Kuwait5% retentionAll payments to beneficiaries, released upon NOC from Kuwait Tax Authority
Oman10%Gross payments to non-residents
Qatar5%Fees, royalties, interest, commissions, and other services
Saudi Arabia5% – 15%15% on royalties, commissions, and attendance fees; 5% on technical fees, interest, and dividends

Our Withholding Tax Advisory Process

Our 6-step approach is structured like this:
  • Transaction Review - Understand the nature of the payment.
  • Jurisdiction Assessment - Determine the relevant WHT rules.
  • Review of the treaty — Determine treaty benefits available.
  • Documentation Check- Review residency and supporting documentation.
  • Payment Structuring — Advise on an effective way to structure payment.
  • Compliance Support — Assist with ongoing filing and reporting responsibilities.
withholding tax in Dubai UAE

Benefits of Professional Withholding Tax Advisory

  • Reduced risk of double taxation
  • Access to treaty-based tax relief
  • Lower withholding tax exposure
  • Improved cross-border payment efficiency
  • Better documentation management
  • Reduced exposure to foreign tax penalties
  • Enhanced international tax compliance

Why Choose Business Tax in UAE (BTU)?

At Business Tax in UAE (BTU) we offer:
  • withholding tax advice for withholding tax on cross-border transactions,
  • Advice on treaty relief and cross-border payment structuring and
  • The documentation required by both the country of origin of payment and the country of recipient.
  • We also manage the ongoing tax compliance of international transactions of any mainland company, Free Zone company, group of companies or businesses based in the region and provide advice on a tax efficient basis in line with the very latest FTA Corporate Tax guidance including that set out in Federal Decree-Law No. 47 of 2022.
withholding tax advisor in UAE
withholding tax consultant in UAE

Get Professional Withholding Tax Advisory Support

Business Tax in UAE (BTU) offers a wide range of Withholding Tax in UAE advisory services including treaty relief assessment, cross-border payments structuring, tax residency certificate support, GCC withholding tax compliance and international tax advisory services for companies operating in multi jurisdictions.

 

Please contact us to ensure your cross-border transactions are efficient, compliant, and optimized.

Frequently Asked Questions

The UAE withholding tax rate is generally zero percent (0%) for most cross-border payments under the new UAE Corporate Tax Law.

No. The UAE does not apply withholding tax on royalties. The current withholding tax rate in the UAE is 0% for all categories, including royalties. 

 

Relief under a Double Tax Treaty (DTT) may be claimed by any taxpayer who is eligible to claim such relief and who has submitted all necessary documentation to support his claim.

 

Yes. UAE companies may be subject to withholding tax in jurisdictions where WHT is levied on cross-border payments.