UAE Corporate Tax: Expert Solutions for Businesses

UAE Corporate Tax

UAE Corporate Tax has been implemented from 1st June 2023. As a UAE commercial operation, you are obliged to comply with the prevailing legislation and submit UAE Corporate Tax returns for your financial year calculated at 9% on profits above AED375,000.

Preparation is essential to optimise your tax liability. Our consultants can provide you with the necessary assistance and guidance to ensure you benefit from all available reliefs and exemptions under the Legislation.

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Corporate Tax Registration

FTA Tax Agency support to reliably register your business individually or as a Tax Group under the FTA registration procedures.

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SME Financial & Tax Solutions

Complete outsource advisory and finance solution for small business to optimise financial reporting, VAT and UAE Corporate Tax.

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Corporate Tax Health Check

Our comprehensive 360 Corporate Tax Health Check assesses UAE Corporate Tax aspects from structuring, exemptions, systems, processes, training to transfer pricing considerations

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Transfer Pricing

Best practice guidance to define, optimise and reduce costs in your UAE Transfer Pricing model with the continuous support to maintain your transfer pricing rules.

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As an ISO 9001, 27001 & 42001 certified & FTA Tax Agency, we deliver cost effective, reliable and quality driven services. All our services are compliant to the prevailing legislation and seek to benefit you from all eligible reliefs.

Complete solution to manage your financial reporting to managing a start up or small business’s complete Outsourced Accounting, Tax Registrations and CT obligations.

We include FTA Tax Agency professional advisory to optimise your tax obligations and a free FTA Zoho Books or QuickBooks software license to ensure your business scales seamlessly and benefits from rich reporting insights.

FAQs

Is your business eligible to register and file for UAE Corporate Tax?

All businesses or individuals conducting commercial activities are subject to the CT Legislation. CT will not apply to an individual’s salary and other employment income. However, individuals who are deriving income as a business activity would be covered under CT.

A narrow scope of entities are exempt from Corporate Tax such as Government entities or extractive businesses (upstream oil and gas sector).

You are not VAT registered, is registration for UAE Corporate Tax still necessary?

CT is a distinct and separate obligation to VAT. No minimum turnover threshold is applied and you must register and fulfill your obligations under the CT Law. VAT registration is not required to meet your CT obligations.

Are Free Zones Exempt from UAE Corporate Tax?

The Corporate Tax Law still applies to Free Zones and are not automatically exempt. Special rules exist for Free Zones and you may benefit from a 0% rate on qualifying income subject to meeting requirements. Only satisfying these requirements can a Free Zone company benefit from the exemptions.

How Is CT Calculated?

CT is calculated as

Final taxable income: (Net profit on worldwide income as per financial statement Less (-) deductible expenses, interest expense, depreciation, etc. + any adjustments to income

CT liability = A + B

– Less foreign tax credit (if applicable)

Final CT payable

What type of income is exempt from UAE Corporate Tax?

Passive forms of income are exempt from CT, they include Investment in real estate, salary/ employment income, dividends, capital gains, other income earned from owning shares or other securities, interest from bank deposit/ saving schemes

What reliefs and exemptions are available?

The CT Law provides for some exemptions and benefits subject to meeting requirements. It is advisable to seek professional advice to ensure you maximise these opportunities.

Can you include all expenses to determine your UAE Corporate Tax liability?

No. Only expenses incurred wholly and exclusively for business purposes, (and which are not to be capitalized) are deductible. Certain types of expenses are subject to limits and cannot be fully expensed.

When will your business need to file and settle your UAE Corporate Tax liability?

CT comes into force on June 1st 2023. Therefore if your financial year is from 1st January to 31st December, the first year for CT is from 1st January 2024. You are obliged to file your CT return and settle your liability 9 months following end of your financial year.

You are a small business, does UAE Corporate Tax still apply?

Yes. The MoF has announced a small business tax relief scheme available to small businesses. Qualifying businesses as having no taxable income and be asked to undertake simplified compliance obligations.

The threshold is based on the revenue and not the profits/taxable income and is expected to be confirmed in a subsequent Cabinet Decision

Are you required to manage transfer pricing rules?

If your business conducts transactions between related parties and connected persons, you are expected to implement a formal Transfer Pricing policy and rules. This will include a Disclosure form, Master and local files detailing your formal policy and pricing determination evidenced by empirical benchmarks.

What is GAAR?

General Anti-Abuse rule, or “GAAR” applies to situations where one of the main purposes of a Transaction is to obtain a Corporate Tax Advantage not consistent with the intention or purpose of the UAE CT Law.

The FTA will address and counteract or adjust the transaction. The GAAR only applies to transactions or arrangements entered into on or after the date the UAE CT Law is published in the UAE Official Gazette of 10 October 2022.

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Corporate Tax Resources

FTA Publishes Corporate Tax Administrative Penalty Regime

by Haroon Juma | Aug 7, 2023

This Decision specifies administrative penalties that will be imposed by the FTA for violations related to the Corporate Tax Law effective as of 1st August 2023.

Determining UAE Corporate Tax Free Zone Exemption & Qualifying Income

by Haroon Juma | Jun 5, 2023

If a Qualifying Corporate Tax Free Zone Person fails to meet any of the conditions or makes an election to be subject to the regular CT regime, it will be subject to the 9% corporate tax rate.

Free Zone Companies – Corporate Tax Obligations

by Haroon Juma | Jun 1, 2023

Operate & Free Zone and wish to maximize the eligible benefits & reduce compliance risks. We can provide a free consultation to ensure your business is optimizing for Corporate Tax Law.

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