Corporate Tax Advice
Our experts will give you advice on all corporate tax issues that could affect your company. This will cover the tax exemptions that can apply to your company and how to take advantage of them.
Registration for Corporate Tax
Our staff will help you register your company with the FTA for corporate tax and manage the due dates for all of your corporate tax responsibilities.
Corporate Tax Returns
Our experts will help you register your company with the FTA for corporate tax and manage the due dates for all of your corporate tax responsibilities.
Starting from June 1, 2023, the UAE will implement a corporate tax of 9% on profits for businesses earning over 375,000 AED (approximately USD $100,000). If a business generates less than this amount, they will continue to have a 0% tax rate. Additionally, large multinational companies with profits exceeding EUR 750 million will be required to pay a 15% tax, aligning with the Global Minimum Corporate Tax Rate agreement. Companies need to be prepared for the new corporate tax, and most will have to allocate funds for tax payments starting from the tax year beginning June 1, 2023. For businesses with a tax year starting in January, the tax will apply to revenues generated from January 1, 2024, onwards.
The UAE has long been regarded by company owners and investors as one of the most profitable locations to launch a new venture.
Due to the UAE’s extraordinarily stable political climate, advantageous location, fantastic business facilities, and, most crucially, the country’s 0% corporate tax policy, both big businesses and startups have preferred the country.
The UAE has the fifth-largest economy in the Middle East, per the International Monetary Fund (IMF). The nation has historically relied on its income from natural resources and oil, but in recent years, dependence on oil has been gradually declining
Many firms mistook corporation tax for value added tax (VAT) when the UAE government originally announced the introduction of corporate tax. VAT and corporation tax are extremely dissimilar, nevertheless.
A consumption tax known as VAT is imposed on the purchase of goods and services. At the time of purchase, the customer pays it. On the other hand, corporation tax is assessed on the taxable income of businesses.
On their yearly net income, the corporations will be required to pay corporate tax. When clients purchase a good or service from a business, they pay VAT, which is subsequently sent to the government.
Corporate tax will be paid to the government directly and will be computed using the company’s net income rather than its overall revenue or sales volume.
Let’s learn more about the taxation procedure now that we are aware of what corporate tax is in the UAE and when it will go into effect.
All companies doing business in the UAE will be subject to the new tax laws starting on June 1, 2023, according to the UAE Ministry of Finance (MOF). Based on how they record their financial year, firms will have different tax calculations for the following periods
Except for a few limited exceptions, all business activities conducted within the UAE must register and submit corporate tax returns.
Our Corporate Tax Service helps you smoothly apply Corporate Tax to your business while following tax laws, submitting tax returns, and offering full tax assistance through these steps.
The MOF, which oversees the company tax in the UAE, has developed a taxing strategy with three taxation tiers, which are:
Over the past few decades, the UAE has created more than 60 economic free zones to attract foreign investors and companies to the nation. Numerous investors have established businesses in UAE free zones in order to take advantage of the country’s zero tax, 100% ownership, and lenient profit repatriation rules.
The UAE government has made an exception with regard to the corporate tax rate for free zone enterprises in order to keep its commitment to support a business-friendly environment in free zones.
The UAE free zones will continue to be tax-free in accordance with this exception. Businesses operating in free zones must nonetheless submit a complete and accurate taxation report with no corporate tax in order to comply with government regulations. Due to their compliance with all other legislative regulations, businesses operating in free zones will benefit from this 0% corporate tax benefit.
Individual income is not subject to company tax, according to MOF. You might therefore wonder if the government will treat independent contractors as people or as legal entities.
According to the corporate tax policy, any organisation that needs a business license in the UAE will be taxed. Professional, commercial, and industrial licences are the three primary categories of business licences.
Due to the simple taxation and abundance of numerous accessible and adaptable coworking spaces, the United Arab Emirates and Dubai are popular travel destinations for many freelancers.
However, you will require a professional licence as a freelancer in order to work as an independent professional or freelancer in the UAE, which will automatically place you under the tax regime.
Therefore, as a freelancer, you must pay 9% corporate tax for the relevant revenue amount if your yearly income exceeds AED 375,000.
Additionally, the MOF has disclosed a few exemptions for specific organisations. You won’t be required to submit a tax return and make tax payments if your company or institutional endeavour qualifies for one of those exemptions. The exempt organisations are:
Companies may be eligible for a tax discount and exemptions in the following two situations, in addition to the exemptions already mentioned by MOF:
income from dividend distributions.
Gains from the sale of shares in a subsidiary company that is owned by them.
The UAE business must possess at least 5% of the overseas subsidiary company in order to be eligible for this benefit. For a few nations, the ownership criterion differs as well.
For the UK, the UAE shareholder entity, for ten consecutive months, must own at least 10% of the ordinary shares of the UK company in order to qualify for a tax-deductible earning.
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