For income subject to withholding tax, the payer must register and report in accordance with UAE tax laws and foreign exchange regulations. Typically, details of the relevant transactions need to be reported to the Federal Tax Authority, and the remaining amount must be paid to the beneficiary after deducting the specified withholding tax.

In the UAE, withholding tax is primarily applied to certain types of income paid to non-residents from UAE sources. The following are the main categories of payments subject to UAE withholding tax:

1. Payments to non-residents: including dividends, interest, and royalties. The payer must deduct tax at the time of payment.

2. Income from performances and exhibitions in the UAE: Non-residents earning income from participating in performances or exhibitions within the UAE must pay withholding tax.

3. Income from the sale of real estate in the UAE: Non-residents who purchase and sell real estate in the UAE must pay withholding tax on the proceeds.

4. Advertising and promotional services: Income earned by non-residents from providing advertising and promotional services in the UAE is also subject to withholding tax.

It's important to note that the UAE generally imposes a 0% withholding tax on certain types of UAE-source income paid to non-resident entities. This is because the UAE has signed treaties with multiple countries and regions to avoid double taxation, thereby preventing the same income from being taxed twice. Additionally, if non-residents meet specific conditions—such as not having a permanent establishment in the UAE or the income being generated solely due to the laws of other countries—they may not be required to pay withholding tax.

The withholding tax rate in the UAE is typically 5% to 10%, but the specific rate depends on the nature of the service and the applicable double taxation agreement. Below is a detailed explanation of the UAE's withholding tax rate:

1. Standard rate: In the absence of specific exemptions or double taxation agreements, the UAE usually imposes a withholding tax of 5% to 10% on certain services and interest income provided to non-residents.

2. Impact of double taxation agreements: The UAE has signed double taxation agreements with multiple countries, which may stipulate different withholding tax rates or exemptions. Therefore, when paying non-resident income, businesses should first check whether an applicable double taxation agreement exists and determine the withholding tax rate accordingly.

3. Exemptions under specific circumstances: In certain cases, such as payments to qualifying free zone companies as 'qualified income,' a preferential corporate tax rate of 0% may apply, exempting the payment from withholding tax. Additionally, certain types of income may be exempt from withholding tax based on the specific terms of the double taxation agreement.

In summary, the UAE's withholding tax rate is not fixed but is determined based on the nature of the service, double taxation agreements, and exemptions under specific conditions.

The UAE's Withholding Tax is a taxation system primarily targeting certain service and interest income paid by the UAE to non-residents.