Commencing from June 2023, UAE businesses are assumed to strap up for Corporate Tax adherence. Thus, it is essential for corporations that constitute the scope of the UAE Corporate Tax Regime to outset formal accounting and auditing strategies to set up their financial accreditations for tax calculation and filing tax yields. Top Corporate Tax Firms in the UAE can effectively assist companies to enforce compliance with the set forth Corporate Tax regulations and standards.
What is the Primary Purpose of Corporate Tax in the UAE?
- Minimize fraudulent/deceitful tax activities: The UAE Corporate Tax's primary purpose is to avert fraudulent tax exercises and enforce full compliance with the set Corporate Tax regulations and laws in the UAE.
- Minimizing compliance costs: The UAE Corporate Tax seeks to effectively lower compliance costs for corporations and administer statutory measures to safeguard start-ups and minor businesses in the UAE.
- Introducing the lowest possible Corporate Tax Rate: The UAE’s Corporate Tax is one of the lowest levied corporation tax, globally.
- Aligning with the Worldwide Standard of Corporate Tax: The UAE's Corporate Tax is a recreational and world-class competitive Tax Regime, it is determined to surpass global standards.
What is the Scope of the Corporate Tax Regime?
The furnished 9% UAE corporate tax rate will be imposed on businesses producing over 375,000 AED net revenue annually, commencing from 1st June 2023. This essentially compels companies to outset thorough auditing and accounting procedures, to ensure full compliance to Corporate Tax regulations and standards. According to the public consultation document, anyone conducting business or engaging in commercial activity in the UAE will fall under the scope of the UAE Corporate Tax Regime, primarily. For each taxation period, corporations are obliged to prepare and submit one corporate tax yield, together with any essential supporting records to the Federal Tax Authority.
Read more about: How is corporate tax calculated?
Who will be Exempt from the UAE Corporate Tax?
The following will be Exempted from the UAE Corporate Tax:
- Gains and dividends earned by a UAE company out of its eligible shareholders remain exempt from corporate income taxation.
- Charities and other public benefit organizations.
- Public and regulated private social security and retirement pension funds.
- Fully Government owned UAE companies that carry out a sovereign or mandated activity,
- Investment funds.
Read more - How will corporation tax returns be filed?
Avail of Top Corporate Tax Consultation Services in the UAE
The procedure of setting and effecting the Corporate Tax regulatory standards in the UAE might be quite complex for a number of businesses. It is immensely essential for corporations to outsource expert Corporate Tax consultation services from approved Tax consulting firms to ensure full compliance with the set Corporate Tax laws and regulations. Call us today and we shall be happy to assist you!
Abrar Ahmad holds a Master’s as well as an MPhil in Finance and has an extensive experience of 10+ years in managing all aspects of Taxation, VAT Consulting and Accounting. He also carries with him a working knowledge of corporate tax and has helped drive value and growth to the businesses of numerous clients.
