This guide should be read by Taxable Persons who receive Dividends from a Resident juridical person, and income or gains from a Participating Interest. A Taxable Person includes both juridical persons and natural persons where the income is not their Personal Investment income
Dividend can be Ordinary, In kind, Other distributions (Redemption and buyback of shares out of distributable profits) and Non-ALP payments
Dividend should be paid out profits,retained Earnings and other reserves
Return on debt funds are not dividend unless risk is shared.
Dividend income received by Natural Person:
Is the dividend received in course of business activity in UAE/ If no, treated as personal Income and not taxable.If yes,does it exceed 1 Million in a calendar year?
If no, Exempt. If yes, Income from resident juridical person is exempt and foreign juridical person also exempt on satisfying certain conditions.
The same applies to dividend income received by a juridical person. In the case of foreign juridical person not having a place of business in UAE,dividend income is not taxable