Dubai tax: truth vs. fiction?

Q: What is the truth about Dubai? Are taxes really that low? I have already visited these websites: http://www.wisegeek.com/is-dubai-really-tax-free.htm http://www.commitbiz.com/UAE%20Free%20Zones.htm?gclid=CN79r46UkZQCFQWVFQodWRI_tQ they say that if you locate in a free zone, you can avoid taxes. My understanding is that as a US citizen, personal income will always be taxed by the US government and paid no matter where the source is geographically. However business income(not personal income) is not taxed until it is repatriated. Obviously, if the Dubai promise is true, then it makes sense to compound business income year after year without taxation in Dubai. As someone who is considering moving to Dubai, I would like to hear more about Dubai, preferably from someone who actually knows what they are talking about. Email me if you have something to say about Dubai. @Angel Re: "living in Dubai" thanks for answering. @Angel Feel free to email advice about moving to Dubai, what to expect, where to go, whatever information you think is important to know. @henrytut2 thanks for answering feel free to email me with any info You travel to other places? what are some smart places to set up a business? Where is the best place to live? Are they the same or different place? @Dana K I would love an email about Dubai, and what an expat life is like. I read somewhere that there are few places to walk; That it is a city built for cars and not people. Are there any good places to walk (for exercise or as an activity in itself) in Dubai? @Dana K Thanks for answering @Dana K "If you decide to move here, make sure you make heaps more then you do now." Is this because the cost of living is higher? Or is it to compensate for the lower 'niceness' of Dubai by earning more?

A: If you're an American, you have to pay your income taxes sooner or later no matter where you earn your money. There is an exemption on the first $85K - but that's only on "earned income" (i.e. salaries - so if you make it from a business or something, you have to pay in full). You'll get conflicting answers because no other country has to do this. Also, most American working overseas are exempt for most or all of their salaries. So, in conclusion, you must pay income tax on ALL income earned overseas unless it's in salary in which case you are exempt up to 85K. You can deduct taxes paid in the country of residence (most countries have tax treaty with u.s.), but in Dubai, that's mostly nothing so nothing to deduct. As far as not having to pay until it's repatriated, I'm sure there are lots of loopholes to be taken advantage of. But in the end, if it ends up in your pocket, you gotta pay.

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