Expert Info

Posted by
on 28 Jul 2011
Can someone explain what tax equalisation is, and what I should negotiate in my job contract?
Anonymous (not verified) on 28 Jul 2011 - 07:39
While Abu Dhabi is a tax-free environment, depending on where you're from, you'll be liable for tax in your home country. Tax Equalization is usually a large concern of people from America, who must pay taxes to the US regardless of their location (unless they're working in a country with a dual tax agreement).

Americans working in Abu Dhabi will want to negotiate a tax equalisation stipulation in their contract, because otherwise they will have to pay tax to the US government on their salary as well as ALL of their allowances (like school allowances, accommodation allowance, car allowance, etc...). This can take a huge chunk out of your income and wipe out any benefits you had from working in a tax-free environment in the first place.

Most employers are familiar with this stipulation and do include it.