Corporate Tax

Our skilled tax experts possess extensive knowledge in taxation, aiding you in aligning your business processes with current regulations. We help your corporate tax function keep up with the constantly changing global and tax environment so you can stay in compliance. Our experienced tax professionals have an in-depth understanding of taxation and we help you see how your business processes integrate with the existing regulations.

Understanding UAE Corporate Tax Landscape 

In a dynamic and rapidly evolving tax environment like that of the UAE, staying compliant and optimized can be challenging for businesses. The UAE Ministry of Finance introduced a Corporate Tax on business profits from June 1, 2023. This new tax policy, primarily supporting small and medium-sized enterprises, sets a 9% tax rate on profits over AED 375,000 ($102,000), with lower profits exempt. All UAE companies must adhere to these regulations, including filing annual returns and keeping accurate records as per the law.

 

This corporate tax initiative is a step towards the UAE’s strategic objectives, enhancing its growth and development. The UAE’s extensive double tax treaty network and this competitive tax structure align with global standards, bolstering its reputation as a prime destination for business and investment. The UAE Corporate Tax Code, integrating international best practices, is designed for clarity and straightforward understanding.

Income that falls below the specified threshold will not be subject to Corporate Tax and will incur a 0% tax rate. The Corporate Tax will be calculated on the taxable income as follows:

 

Resident Taxable Persons:

• A tax rate of 0% applies to taxable income up to AED 375,000 (awaiting confirmation via a Cabinet decision).
• Taxable income that exceeds AED 375,000 will be taxed at a rate of 9%.

 

Qualifying Free Zone Persons:

• Income that qualifies will be taxed at a 0% corporate tax rate.
• If the taxable income is not considered Qualifying Income, it will be subject to a 9% tax rate.

Free Trade Zones

The UAE reaffirms its dedication to companies operating within Free Trade Zones, with the condition that these entities refrain from conducting business activities on the mainland. Companies that comply with this stipulation are eligible for a tax rate of zero percent or may be exempt until the conclusion of the specified exemption period. Additionally, all businesses within these free zones are mandated to submit an annual Corporate Tax return.

For companies that operate both in Mainland UAE and Free Trade Zones, as well as those functioning under the dual license framework, it’s crucial to thoroughly assess how this arrangement influences their business model.

 

Our Corporate Tax Services:

 

Tax Compliance and Reporting:

• Ensuring your business adheres to the latest tax laws and regulations.
• Preparation and filing of tax returns with accuracy and timeliness.
• Assistance with tax audits and communications with tax authorities.

Corporate Tax Advisory:

• Strategic tax planning to optimize your tax position.
• Advice on structuring business transactions to be tax-efficient.
• Guidance on double tax treaties and international tax implications.

VAT and Indirect Taxes:

• Expert advice on VAT compliance, registration, and filing.
• Navigating the complexities of indirect taxes in the UAE market.

Transfer Pricing:

• Assistance with transfer pricing documentation and compliance.
• Strategies to manage transfer pricing risks and optimize tax efficiency. 

Customized Solutions for Unique Challenges:

• Addressing industry-specific tax challenges and opportunities.
• Tailoring tax solutions to fit the unique needs of your business. 

 

Let 1Turn Consultants be your guide in the complex world of corporate taxation in the UAE.