Withholding tax in UAE is an amount paid by an employer or entity as income tax on behalf of its employees or workers. It is termed as ‘withholding’ as it is deducted at the source of the income. The withheld amount is a credit against the income tax that the employee has to pay during the year. However, if the employer withholds an excess amount of money from their income, then the employee will be eligible for a tax refund. On the other hand, if insufficient funds are withdrawn from the income, then the employee has to owe the IRS(Internal Revenue Service) while filing their tax returns.