I just finished watching a documentary on Dubai and it stated that companies that are based there pay no taxes. If this is true then how does Dubai make money from the companies? Do they require you to employ a certain number of Dubains or do actual business in Dubai. In America once your company gets into the millions you are taxed 50% of your net income. They have to charge something or else every company in America would move there. So whats the catch?
Part2
2007-08-05 04:37:23 · 3 answers · asked by Romell M 1 in Business & Finance ➔ Taxes ➔ United States
oil- state owned
2007-08-05 05:22:19 · answer #1 · answered by aCeRBic 4 · 0⤊ 0⤋
While they may not pay taxes in Dubai, if the company has a US presence it certainly will pay US taxes on the US income. If the move is believed to be a tax dodge by the IRS then all of the company's profits will be subject to US taxes.
UAE (of which Dubai is both one of the 7 Emirates that comprise the UAE and the name of the principal city) historically make most of it's income from the state-run oil industry, much as many Middle Eastern countries do. Once the oil supplies dry up, and they will eventually, they'd be in a world of hurt if they didn't diversify.
Dubai has seen it's oil and gas revenues drop drastically over the past several years and its reserves are expected to be exhausted in 20 years or so. In preparation for this, Dubai has made major investments in tourism including some of the most spectacular and opulent facilities catering to the ultra-rich. Additionally, diversification into other markets including financial services should secure Dubai's economic future. Fees and taxes levied upon the tourist and financial services industries (and paid by the users of the services) obviate the need for traditional income taxes for the most part.
2007-08-05 12:31:06 · answer #2 · answered by Bostonian In MO 7 · 0⤊ 0⤋
companies still pay taxes on their profits generated in the USA.
2007-08-05 11:54:40 · answer #3 · answered by Corruptfile34 5 · 0⤊ 0⤋