How Working in United Arab Emirates (UAE) Impacts Your US Expat Taxes
American citizens are obligated to file US expat taxes with the federal government each year. In addition to the regular income tax return, you could also be required to file an informational return on your assets held in foreign bank accounts. While the US is one of the few governments that taxes the international income of its citizens and permanent residents, it does have provisions to protect us from double taxation. These include the Foreign Earned Income Exclusion, Foreign Tax Credit, and Foreign Housing Exclusion.
If you are an American living in UAE, you need to know how this will impact your US expatriate tax returns. This short video will provide you with a glimpse of how being an American living in UAE will impact your US expat taxes. More detailed information can also be found in our Country-Specific Guide to UAE; click here to read it.
US Expat Taxes in the UAE
Do I need to file taxes if I’m living in the UAE?
YES! US citizens are required to file and pay US expat taxes on worldwide income. It does not matter if you’ve already paid UK taxes elsewhere. You still must file US expat taxes.
First, let’s start with your UAE filing requirements.
What tax rates will I see in the UAE as a resident?
0%
There are NO TAXES in the UAE.
Wait… NO income taxes in the UAE?
There are NO income taxes in the UAE.
- You do not need to file a return
- You do not need to report worldwide income
- The only social security you pay will be to the US
- The only tax you will see in the UAE is a VAT… if they implement it in the future!
- There is no tax treaty with the US – but you won’t pay any UAE taxes!
Now, let’s move on to your US filing requirements
US Expat Tax Year and Due Dates
US tax year – January 1-December 31
Key deadlines:
- April 17: Although expats get an automatic extension to June 15, if you owe any taxes, interest accrues as of April 17.
- June 15: This is the US expat tax deadline. Unless you have filed for an extension, you must file your US expat taxes before this date.
- June 30: FBAR (Foreign Bank Account Reporting) due to the Department of Treasury. No extensions are granted.
- October 15: Last due date for US expats (if you have filed an extension).
What about my US expat taxes?
You will need to file US expat taxes. But if you pass the Physical Presence Test or Bona Fide Resident Test, you can apply for big deductions and credits.
- Physical Presence Test – Physically present in a foreign country for more than 330 days.
- Bona Fide Resident Test – Resident of a foreign country for at least a year.
How can I save? Reduce your income!
- The Foreign Earned Income Exclusion, which allows you to exclude up to $92,900 of foreign-earned income from your US taxes,
- The Foreign Housing Exclusion, which allows qualified expatriates to exclude an additional 30% of the foreign income they excluded due to the cost of living abroad. Some places, like Dubai, have even higher exclusion rates!
Understanding your US tax obligations is important.
Do you have questions? Contact an expert!
Greenback Expat Tax Services
[/EXPAND]
We offer resources and services to help you:
- Learn more about how your US expat taxes are impacted when you live and work in UAE by reading our Country-Specific Guide to the UAE.
- Discover more ideas on how to limit your tax liability by following Expatriate Tax Return Savings Tips on our website or by talking to one of our expat tax experts.
- File amended tax returns and forms easily, accurately, and in a timely manner.
If you have any more questions about your US expat taxes and their implications in UAE, or if you’d like to enlist our help in completing your returns, please contact us.
