Corporate Tax Consulting & Advisory Services in UAE

Service Overview

Helping Your Business Stay Compliant with UAE Corporate Tax Regulations The UAE has implemented a Corporate Tax system, applicable to businesses operating here starting June 1st, 2023. This tax on net business income boasts one of the world’s lowest rates and is designed to streamline compliance. The revenue generated will strengthen the UAE’s economic standing, while the system itself promotes transparency and adheres to international standards. Entrepreneurs can rest assured, as the UAE remains dedicated to supporting startups and small businesses. UAE Corporate Tax: Who Pays and How Much? The UAE’s new corporate tax system has two main components: - Standard Rate: This applies to most businesses operating in the UAE. The rate is set at a competitive 9% for taxable income exceeding AED 375,000 (around USD 102,000). - Multinational Enterprise (MNE) Rate: Large multinational companies with global revenue exceeding AED 3.15 billion (around USD 860 million) may qualify for a different tax rate under specific international tax rules (OECD’s BEPS 2.0 framework). Corporate Tax & Accounting Services We Offer At ABICO, we provide reliable corporate tax services in Dubai designed to help businesses stay compliant with UAE tax regulations. Our expert team assists with corporate tax registration UAE, tax planning, return filing, compliance management, and financial reporting for companies across different industries. We support startups, SMEs, and established businesses with accurate tax assessment and strategic advisory services to reduce risks and improve financial efficiency. With in-depth knowledge of UAE corporate tax laws, ABICO ensures a smooth and hassle-free process while helping businesses maintain proper accounting records, meet filing deadlines, and achieve long-term financial growth in the competitive UAE market. Entities and Activities Included Under UAE Corporate Tax The corporate tax applies to a broad range of businesses and activities: - Businesses with a Commercial License: Any company operating commercially in the UAE, regardless of nationality, will be subject to the tax. - Free Zone Companies: Businesses within designated Free Zones can qualify for tax benefits, but only if they meet specific regulations and don’t conduct mainland UAE business. - Foreign Businesses with UAE Operations: Foreign companies with a physical presence or management control in the UAE will also be subject to the tax. - Financial Services: Banks and other financial institutions fall under the corporate tax umbrella. - Key Sectors: Construction, development, real estate, agencies, and brokerage activities are all included in the scope of corporate tax. Entities Exempt Under UAE Corporate Tax The United Arab Emirates (UAE) provides various exemptions and benefits within its corporate tax framework. Below is an overview: - Automatically Exempt: Government entities and their controlled entities (as listed by the government). - May Be Exempt (Upon Application to Ministry of Finance): Exempt after Federal Tax Authority (FTA) Approval. - Additional Tax Advantages: Businesses need not pay corporate tax on dividends or capital gains from qualifying shareholdings. Certain intra-group transactions and reorganizations within a company structure may be exempt under specific conditions. What's Always Tax-Free (for Individuals): - Individual salaries and other employment income (Public or Private). - Interest and savings income from personal bank accounts. - Investment income of foreign investors (dividends, capital gains, etc.). - Personal real estate investments. - Dividends, capital gains, and other income from personal ownership of shares or securities. Free Zone Benefits (with Conditions): The UAE intends to honor existing Free Zone benefits for companies that: - Don’t do business with the UAE mainland. - Meet specific requirements to qualify as a “Qualified Free Zone Person” (QFZP). These requirements include: 1. Maintaining a substantial presence in the UAE (substance test). 2. Generating “Qualifying Income” (income defined as exempt under the tax law). 3. Not electing to be subject to the standard corporate tax rate. 4. Complying with transfer pricing regulations. - Note: Free Zones are still required to file annual corporate tax returns. Impact on Multinational Companies (MNCs): - Mergers & Acquisitions (M&A) and Foreign Direct Investment (FDI) planning under corporate tax frameworks. - Compliance with transfer pricing and OECD requirements. Key Points About UAE Corporate Tax: - Individuals: Your salary, real estate income, investments, and other personal income (not related to UAE business) are not subject to corporate tax. - Non-residents: You’ll only pay tax on income directly earned in the UAE or from a permanent establishment (PE) in the country. - Business Profits: The tax applies to a company’s adjusted accounting net profit. - Free Zone Businesses: Companies operating in Free Zones can still qualify for tax benefits if they meet specific criteria. - Natural Resources: Extraction of natural resources remains subject to separate emirate-level taxation (not corporate tax). Reduced Tax Rates or Exemptions: - Dividends and Capital Gains: Under certain conditions, these can be exempt from corporate tax. - Withholding Tax: Domestic, cross-border payments and specific transactions may have a 0% withholding tax rate. Tax Benefits for Groups: - Tax Groups: Companies within the UAE can form tax groups under specific conditions. - Loss Transfer: Tax losses from one profitable company in a group can be transferred to offset tax burdens in another company within the group (conditions apply). - Group Relief: Eligible intra-group transactions and restructuring can benefit from tax relief. - Foreign Tax Credit: Companies can receive credit for taxes paid elsewhere against their UAE tax liability on foreign income. Tax Calculations and Reporting: - Transfer Pricing: Follows OECD guidelines. - Accounting Standards: International accounting standards apply, with some relaxations for specific taxpayers. - Simplified Reporting: Start-ups and small businesses may have simplified financial and tax reporting options.