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Comprehensive Guide to Corporate Tax in the UAE

Corporate taxation primarily targets a company’s profits and net income, with Corporate Income Tax (CIT) specifically focusing on earnings. Therefore, businesses must actively understand and adhere to CIT regulations to ensure compliance and maintain effective financial management.
Notably, the UAE will introduce a Corporate Tax applicable to all businesses, with the exception of those involved in natural resource extraction, which will remain subject to Emirate-level taxation.
 
Foreign entities and individuals are subject to Corporate Tax in the UAE if they engage in ongoing or regular business activities within the country.

Who Should Avail Corporate Tax Services in the UAE?

Beginning in 2024, the Federal Tax Authority will require all UAE businesses to register for corporate tax. This mandate applies to every company, regardless of profitability or how long they have been in operation. As a result, businesses must act quickly to comply with these regulations. However, many companies still find the implications unclear, despite the limited time available.
 
Looking to secure Corporate Tax Services in the UAE?  Look no further. Come to us and receive expert advice tailored to your needs. 
Corporate Tax in UAE

Our Corporate Tax Service in the UAE Includes

Corporate Tax Registration

A business subject to CT will need to register with the FTA and obtain a Tax Registration Number within a prescribed period.

Corporate Tax Registration

A business subject to CT will need to register with the FTA and obtain a Tax Registration Number within a prescribed period.
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Corporate Tax Filing

For every tax period, businesses will need to prepare and file a tax return along with other related schedules.

Corporate Tax Filing

For every tax period, businesses will need to prepare and file a tax return along with other related schedules.
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Corporate Tax Refund

Our advisors will assist you every step of the way through VAT implementation, thereby preventing you from incurring penalties.

Corporate Tax Refund

Conduct of a health check to review the current tax position of your business and provide relevant VAT advice.
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Corporate Tax Advisory

Businesses crossing the defined annual turnover threshold are liable to register under VAT.

Corporate Tax Implementation

VAT Implementation in UAE made it mandatory for the businesses to keep a full record of their accounts & daily transactions.
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Corporate Tax Review

Checks how accurately your business processes VAT transactions,can highlight opportunities for savings & identifies risks.

Corporate Tax Review

With our extensive experience, we specialize in conducting reviews of tax compliance for local entities, ensuring the integrity and accuracy of a company's tax systems and processes.
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Corporate Tax De-registration

When a business ceases to be subject to the CT, the CT registration must be deregistered within 3 months.

Corporate Tax De-registration

When a business ceases to be subject to the CT, the CT registration must be deregistered within 3 months.
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Points To Be Noted on Corporate Tax in UAE

Corporate Tax in the UAE

In the United Arab Emirates, businesses and individuals with commercial licenses must acquire a license. However, free zone businesses that comply with all regulatory requirements and refrain from operating in the UAE’s mainland will continue to enjoy the existing corporate tax incentives.

Foreign entities and individuals are required to obtain a license if they regularly engage in trade or business activities within the UAE. This rule also extends to those involved in banking, real estate management, construction, development, as well as agency and brokerage services.

CT will be levied on a business’s annual taxable income according to the following structure:
  • For taxable income not exceeding AED 375,000, the rate is 0%.
  • For taxable income exceeding AED 375,000, the rate is 9%.
 

Furthermore, a separate tax rate, yet to be determined, will apply to large multinationals that meet specific criteria under Pillar II of the OECD BEPS. With the Consultation Document highlighting the UAE’s commitment to adopting BEPS 2.0 measures, this rate is expected to align with the final rate set by the OECD.

Under the UAE Corporate Tax Law, a corporate tax refund may be available. If a Taxable Person makes a payment to the Federal Tax Authority (FTA) that exceeds the Corporate Tax due, they can apply for a refund. In such instances, the Taxable Person can claim a Corporate Tax Refund from the FTA. Consequently, businesses must be diligent in tracking their tax payments to ensure they can take advantage of any potential refunds.
In the UAE, VAT-registered businesses collect the tax on behalf of the government. Consequently, consumers bear the VAT cost through a 5 percent increase in the price of taxable goods and services they purchase. Moreover, the UAE imposes a 5 percent VAT on tax-registered businesses for every taxable supply of goods or services at each step of the supply chain. Additionally, tourists in the UAE pay VAT at the point of sale.

VAT applies equally on tax-registered businesses managed on the UAE mainland and in the free zones. However, if the UAE Cabinet defines a certain free zone as a ‘designated zone’, it must be treated as outside the UAE for tax purposes. The transfer of goods between designated zones are tax-free.

At the end of each tax period, VAT registered businesses or the ‘taxable persons’ must submit a ‘VAT return’ to Federal Tax Authority (FTA).

A VAT return summarises the value of the supplies and purchases a taxable person has made during the tax period, and shows the taxable person’s VAT liability.

Our Corporate Tax Service Procedure

Moreover, when strategizing for corporate income tax management, it is essential to stay updated on the latest advancements in tax legislation, rules, and international tax agreements. Ensuring compliance with these regulations not only enhances tax planning approaches but is also vital for your business. Similarly, diligently maintaining accurate and comprehensive records for all business transactions and expenses related to tax matters is crucial. Likewise, we are ready to support you by rectifying your accounting records, ensuring their accuracy, and preparing your company for corporate taxation in the UAE.

The company should train its employees on tax laws, regulations, and compliance requirements regarding corporate income tax. Consequently, this training will ensure a comprehensive understanding of the new tax system. Moreover, it will enable employees to comply with the stipulated requirements.

To achieve effective implementation and compliance with corporate income tax in the UAE, companies must proactively engage in tax planning, meticulous documentation, and strict adherence to tax laws and regulations.

Moreover, companies may opt for professional assistance from audit firms in Dubai, accountants, and legal experts to ensure seamless compliance with tax laws and regulations.

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