Navigating Corporate Tax Waters: Your Trusted Partner in UAE Tax Solutions

What is Corporate Tax?

Corporate Tax is a direct tax imposed on the net income or profit of businesses. Also known as Corporate Income Tax, it plays a crucial role in a nation’s economic landscape.

Who is Subject to UAE Corporate Tax?

UAE Corporate Tax applies to juridical persons incorporated in the UAE, foreign entities effectively managed in the UAE, and individuals engaged in business activities. This ensures comprehensive coverage.

Applicability Across Emirates As a federal tax, UAE Corporate Tax will be uniform across all Emirates.Coexistence with Other Taxes Corporate Tax will coexist with VAT and Excise Tax in the UAE. Each tax has a distinct purpose and will be applied independently.

Role of Federal Tax Authority and Ministry of Finance The Federal Tax Authority will administer and enforce UAE Corporate Tax, while the Ministry of Finance will handle bilateral/multilateral tax agreements and international exchange of tax-related information.

Preparing for the UAE Corporate Tax Businesses are advised to familiarize themselves with the Corporate Tax Law, assess their liability, understand filing requirements, and stay updated through the official websites of the Ministry of Finance and the Federal Tax Authority.

Corporate Income Tax Rates in the UAE

As outlined by the UAE’s Ministry of Finance, the Corporate Income Tax rates are as follows:

  • 0% CIT for taxable income up to AED 375,000.
  • 9% CIT for taxable income exceeding AED 375,000.

Large companies meeting criteria associated with Pillar Two of the OECD Base Erosion & Profit-Sharing Project will be subject to a separate tax rate. (Applicable to companies with global revenue exceeding 750 million or AED 315 billion).

Effective from March 1, a new decision mandates businesses to register by specific dates based on the month their license was issued. Failure to comply may result in a fine of Dh10,000 ($2,722).

Applicability of Corporate Tax in Free Zones

Corporate Tax will extend its reach to businesses operating in the UAE’s free zones. Nevertheless, entities within free zones adhering to regulatory standards and exclusively operating within the free zone boundaries will retain corporate tax incentives. Free zone businesses are required to complete registration and submit corporate returns.

Corporate Income Tax for Foreign Individuals & Entities

Corporate tax is applicable to foreign individuals and entities engaged in regular business activities within the UAE. However, income generated by foreign investors from dividends, capital gains, interest, royalties, and other investment returns remains exempt from Corporate Tax Services in the UAE.

How can Eastern Region Group (ERG) help?

We serve as a link between entrepreneurs and regulatory bodies, our corporate tax advisors in Dubai offer comprehensive guidance for all tax-related inquiries.

Tax Management Consulting Services

Navigating the complexities of tax management, ensuring compliance with evolving laws, and maintaining seamless business operations can be challenging. With years of consulting expertise across various sectors, ERG is well-equipped to help you meet the changing demands of the UAE market and efficiently manage multi-jurisdictional tax operations.

Our comprehensive services address challenges in compliance, reporting, and risk management for various tax categories. Through meticulous analysis, we develop foolproof strategies, assist in transforming processes, technologies, and resource models, and provide global outsourcing capabilities.

Executing a well-coordinated tax strategy supported by an implementation roadmap, we deploy our dedicated tax management specialists to tackle your critical challenges. Our services encompass:

  • Representation of entities before tax authorities for assessments, appeals, search & seizure cases.
  • Advanced tax calculations.
  • Compliance with tax obligations arising from Corporate Tax & ESR laws.
  • Filing returns related to VAT and other taxes.
  • Global taxation and transfer pricing.
  • Corporate Tax transition management.
  • Staff training and business readiness assessments.
  • Preparation of businesses for Corporate Tax Audits.
  • Definition and implementation of transfer pricing policies, operating models, capital structures, tax functions, and more.

Business Tax Solutions

Generating revenue through taxes is a common objective for many jurisdictions. Managing taxes becomes intricate when businesses operate across diverse jurisdictions. We present a comprehensive and streamlined approach to intricate tax challenges. Regardless of your business location, our services are tailored to address the distinct challenges of your jurisdiction while meeting your specific requirements.

We possess in-depth knowledge spanning various financial aspects, including taxation, accounting, business consulting, VAT advice, and more. Our practical guidance, combined with a robust tax compliance framework, empowers you to navigate challenges such as corporate taxes, transfer pricing, and beyond.

Our services encompass:

  • Tax planning concerning Corporate Tax rates
  • Corporate tax impact assessment
  • Multi-country planning
  • Base Erosion and Profit Shifting (BEPS)
  • FPI Advisory and Fund Compliance
  • Individual, Family Office, Estate, and Trust Compliance
  • Technology and consulting support
  • Corporate tax advisory
  • Tax compliance support
  • Litigation support
  • Effective Tax Rate (ETR) management

Transfer Pricing

Compliance with the transfer pricing procedure has gained enormous significance among businesses since the introduction of Corporate Tax. Companies in the UAE must comply with the transfer pricing rules and documentation requirements.

  • A thorough analysis of cross-border financial transactions with respect to Corporate Tax.
  • Checking BEPS readiness and contract analysis.
  • Compliance with OECD Transfer Pricing Guidelines.
  • Structuring transfer pricing policies.
  • Proper transfer pricing documentation – Local, Master File, and Country by Country Report (CbCR).
  • Assessing the applicability of the Master file, Local file, and CbCR.
  • TP assessment of each jurisdiction in which your business operates.
  • Establishing tax-efficient Supply chain management.
  • Ensuring the transactions (between enterprises under common ownership) satisfy the arm’s length principle.
  • Exploring legal restructuring for optimal growth for Mainland and Freezone companies.
  • Transfer pricing risks assessment.

Effectively handle your business taxes and reduce tax risks and liabilities with the assistance of our proficient corporate tax services in Dubai. Contact us today at +971 56 901 5507 and engage with our insightful corporate tax consultants for expert guidance.

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