If you live in the UAE and have come from abroad to earn, you will need to send money home every month. This is a daily habit, especially for Indian, Pakistani, Filipino, and Bangladeshi expats. But in the last few days, the question has been repeatedly raised that has the UAE government imposed any new tax on international money transfers? Or is it just the banks and exchange houses’ own fees? Everyone wants to know the truth about this and whether they are included in this tax or not.
Lulu is currently a huge trend in the market, and most people are using it. Because it is not only easy to use, but also fast, and can be done from home. You can check Lulu balance, send and receive money from home, but Lulu exchange charges appr 18.40 AED for small amounts. They have not yet announced any type of tax on remittance, but you should always subscribe to notifications and email services to get the latest updates.
Similarly, Emirates NBD has increased the tax for all those people who send money abroad from AED to other currencies. Here is a quick overview of the fee.
| Feature / Provider | LuLu Exchange | Emirates NBD – DirectRemit |
| Transfer Fee (Pakistan & India) | AED 0 (if amount > USD 100) AED 18.40 (for smaller amounts) + 5% VAT | AED 0 (if amount > AED 100) No VAT |
| Transfer Fee (Other Countries) | AED 18 – AED 30 (varies by country and amount) | AED 26.25 (flat fee, VAT included, from Sept 2025 onwards) |
| Exchange-Rate Markup | 0.01% – 0.39% (currency dependent) | Bank FX rates (less transparent, usually higher than exchange houses) |
| Speed | Instant or same day (depending on destination) | Instant (for India, Pakistan, Philippines, Sri Lanka, Egypt, UK) |
| Best For | Low-cost transfers to Asia & frequent small transfers | Free transfers to 6 core countries if using the bank app / online |
| Extra Benefit | Fee waiver on larger transfers (above USD 100) | Directly linked with your Emirates NBD account (no cash needed) |
| Drawback | Still charges small VAT + markup | Fees apply for non-core destinations (AED 26.25) |
There are no new government taxes; they remain unchanged from those in the UAE.
First of all, let us clarify that the UAE government has not imposed any new taxes nor has it considered it. The tax system that was already in place is still in place. That is:
- A 5% Value Added Tax (VAT) is already in place on certain services.
- VAT is levied on “SWIFT” or other banking fees between banks, but it does not directly affect the average customer.
So if you’ve heard of a “new tax,” it’s most likely a new fee from the bank or service provider, not a new tax from the government. It’s all done by the bank to control its costs and improve its services.
Emirates NBD’s new fees that were not previously applicable
It is well known that Emirates NBD is one of the largest banks in the UAE. It used to provide free transfers to India, Pakistan, the Philippines, Sri Lanka, Egypt, and the UK through its famous DirectRemit service. But it has announced that it will charge AED 26.25 on every transfer from August 2025. To know more, Emirates NBD new Tax fee and who it will effective from this.
Please note that this is a bank service fee, not a government tax.
Where does VAT apply?
In the UAE, if you use Wise or any other fintech app and send money in AED currency, there is a 5% VAT on the service fee. For example:
If the service fee is AED 20, then an additional AED 1 VAT will be charged. This will apply to all users who use tech apps like Wise.
This VAT is government-owned and has been in place since 2018.
Other fees to keep an eye on
You should be aware that not only do banks charge you for this, but also for many other things. These practices have become so common in your life that you may not even notice them.
Other fees to watch out for
SWIFT fees – If you send money through a traditional bank like NBD, there may be an additional deduction of AED 20–40.
Exchange rate margin – There may be a difference between the actual rate and the rate given by the bank, which is a hidden cost.
Card usage – If you use a UAE debit or credit card abroad, there is an additional fee of 2–3%.
Conclusion
You should be aware that the UAE government has not imposed any new taxes yet. Only some banks, like Emirates NBD, have increased their fees, which has become a trend in the UAE. This is a bank that has a lot of customers due to its free service, and so far, its 5% VAT is already applicable to some services. If you send money regularly, it’s best to check rates and fees every time to save money.
Apart from that, if you want to know more about Complete Guide about FAB Bank Cards, and Salary then visit our Blog category.