Beyond tax-free

The UAE has one of the world’s most attractive personal tax environments according to a new global survey of expatriate hot spots by Mercer. I don’t know how long it took Mercer to compile the report (it canvassed 32 countries) but the UAE section should have easy enough: note for next year, guys, there is no direct taxation here.
At first glance the report, Mercer’s Worldwide Individual Tax Comparator, makes bland enough reading. The UAE is top, what more do we need to know. It is cost-of-living and competitiveness reports that we’re most interested in. How or how much expat workers can get for their dirham overseas. Or what it costs to rent a two-bed apartment in downtown Moscow, Bangkok or Cape Town.
Where there is benefit is in highlighting potential concerns for the future. The report highlights the difference in tax breaks for single and married workers. It also looks at flat-rate taxes and social security contributions.
Many observers say a tax environment is in the UAE inevitable (road tolls, municipality fees and state-owned service providers are already revenue-generating), and a consumer tax is expected to roll out. For expats with children, education is a de facto tax. Residents know they’re being taxed; for those yet to arrive there remains a certain appeal in saying you’re moving to a tax-free country. Losing this tax-free status is a significant step. How the UAE plans to introduce taxes will say a lot about the type of people it wants to attract.