Supporting You With Corporate Tax Compliance
Supporting Small Businesses in the UAE with Registration, Consultation and Corporate Tax Filing
Our Clients
Are You Prepared for Corporate Tax?
Small Business Compliance Checklist
The new UAE Corporate Tax regime will require businesses to have comprehensive accounting and bookkeeping in place.
Our consultants and partners will work with you to support your compliance requirements using our comprehensive checklist.
Key Corporate Tax Considerations for Small Business
From the 1st of June 2023, the corporate tax rate will be 9% of net profits made by businesses in the UAE.
In order to support small businesses and start-ups, the corporate tax rate will be 0% of profits is up to the threshold of AED 375,000.
How We Prepare Small Businesses for Corporate Tax Compliance
Effective 1 June 2023 Corporate Tax will affect all aspects of business including purchasing, distributions, operations and hiring. Our experts will ensure you are prepared with minimal fuss.
Our Method to Ensure Your Peace of Mind
Corporate Tax Registration
First step to compliance is registration. Ensuring this is correctly completed is imperative to prevent penalties. Our team will ensure supporting documentation is in order to enable a smooth registration process.
Corporate Tax Consulting
Our tax experts and partners will dive deep into your business to understand the parts of your business most as risk with compliance. Our team will ensure your business is tax efficient and will support any process changes required.
Corporate Tax Software
Tax compliance and preparation should not be a manual process without audit trails. Our software partners will provide solutions which pulls data from your accounting system to prepare your tax return with a few clicks. You will also have full transparency on your calculation.
Corporate Tax Audit and Submission
Our tax experts and partners manage multiple clients ranging from varied industries and can draw from their comprehensive experience in tax compliance from Saudi Arabia and the UK. Rest assured our service will ensure are full compliance with Corporate tax
Have you Considered these Topics?
Corporate Tax application on Freezone companies
On 09 December 2022, the Ministry of Finance released Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses. This law included the treatment of businesses on freezones as well as the mainland.
Do I need to Pay Foreign Tax and Double Taxation?
Under the upcoming UAE Corporate Tax regime, foreign companies will be subject to the corporate tax rate of 9% on annual taxable income exceeding AED 375,000.
What is Group Relief?
Group relief is a relief from Corporate Tax. Businesses are able to create tax groups under the UAE corporate tax framework, which will go into force in June 2023.
Do I need to Comply with Transfer Pricing Rules?
Transfer pricing refers to the prices of goods and services that are exchanged between companies under common control.
Corporation Tax Introduction
Corporate Tax (CT) is a direct tax levied on the net income or profit of corporations and other businesses.
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What is Corporation Tax?
Corporate Tax (CT) is a direct tax levied on the net income or profit of corporations and other businesses.
Corporate Tax is sometimes also referred to as “Corporate Income Tax” or “Business Profits Tax” in other jurisdictions.
By introducing CT, the UAE aims to cement its position as a leading global hub for business and investment, as well as meet international standards for tax transparency and prevent harmful tax practices. Most countries in the world have a comprehensive CT regime, including most of the GCC Member States.
When will Corporate Tax come into effect?
The CT will apply to financial years starting on or after the 1st June 2023, according to the UAE Ministry of Finance.
For instance, a business that has a financial year starting on the 1st June 2023, and ending on the 30th of June 2024, will become subject to UAE CT from the 1st of July 2023.
A business with a financial year starting on the 1st of January 2023, and ending on the 31st of December 2023, will become subject to UAE CT from the 1st of January 2024.
What is the UAE Corporate Tax Rate?
The CT rates are
- 0% for taxable income up to AED 375,000;
- 9% for taxable income above AED 375,000;
and a different tax rate for large multinationals that meet specific criteria set with reference to ‘Pillar Two’ of the OECD’s (Organisation for Economic Cooperation and Development’s) Base Erosion and Profit Shifting project.
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Corporation Tax - FAQ
What is UAE Corporation Tax?
Corporate Tax (CT) is a direct tax levied on the net income or profit of corporations and other businesses.
Corporate Tax is sometimes also referred to as “Corporate Income Tax” or “Business Profits Tax” in other jurisdictions. Most countries have a comprehensive CT regime, including most of the GCC Member States.
What is the Corporate Tax rate for UAE?
- 0% for taxable income up to AED 375,000
- 9% for taxable income above AED 375,000
There is also a different tax rate for large multinationals that meet specific criteria set with reference to ‘Pillar Two’ of the OECD’s (Organisation for Economic Cooperation and Development’s) Base Erosion and Profit Shifting project.
When Does Corporate Tax in the UAE come into effect?
Corporate tax is effective from 1st of June 2023 and it is expected that filing and payment deadlines will be 9 months after the financial year end.
Are Free Zone businesses subject to UAE Corporate Tax?
Companies operating in Free Zones will be subject to UAE Corporate Tax, but the UAE Corporate Tax regime will continue to apply incentives offered to free zone businesses (providing they comply with the regulatory requirements and do not conduct business with mainland UAE).
Entities operating in Free Zones will be subject to a 0% CT rate on their taxable income. If an entity located in a Free Zone derives non-passive income from mainland UAE all its income will be subject to the general CT regime.
Are Foreign Businesses Subject to UAE Corporation Tax?
To qualify for the 9% annual tax rate a foreign company operating in UAE has
- Their Permanent Establishment (PE); or
- Their Place of Effective Management; or
- Their source of income.
Do Small Businesses need to pay UAE Corporate Tax?
On the 1st of June 2023, the corporate tax rate will be 9% of the net profit made by businesses in the UAE. In order to support small businesses and start-ups, the corporate tax rate will be 0% if the net profit is up to AED 375,000.
How can I prepare my business to comply with the UAE Corporate Tax laws?
The best way to prepare for the new Corporate Tax is to have accounting software which covers all the necessary requirements. The best accounting software for businesses currently is Xero Accounting software.
What is the periodicity of filing corporate tax return?
Corporate Tax return is to be filed annually. Accordingly,
- Entities whose financial year-end is 31 May should file their CT return for the financial year-ending 31 May 2024
- Entities whose financial year-end is 30 September should file their CT return for the financial year-ending 30 September 2024
- Entities whose financial year-end is 31 December should file their CT return for the financial year-ending 31 December 2024
How will the taxable income be calculated?
The taxable income will be calculated after making specified adjustments or exceptions to accounting net profit and tax losses, if any can be carried forward to subsequent fiscal years and set off against the taxable income for the respective year.
Who is responsible for the administration and collection of Corporate Tax in UAE?
The Federal Tax Authority (FTA) will be the responsible and regulatory authority for the enforcement, collection of tax and administration of the Corporate Tax in UAE.
Which businesses will be covered under Corporate Tax?
Corporate Tax covers all businesses incorporated in UAE except those involved in the production of natural resources but including businesses incorporated in Free zones and not operating or conducting business with the UAE mainland but excluding branches of foreign banks.
Will tax holidays continue to apply to free zone entities?
Free zones in the UAE offer various incentives including tax-free periods of up to 50 years. This will continue to be honored under the Corporate Tax regime for free zone entities that comply with the relevant regulatory requirements and do not conduct business with mainland UAE.
Will entities involved in oil and gas activities, currently subject to UAE corporate taxation?
Corporate Tax does not cover businesses incorporated in UAE involved in the production of natural resources. However, service companies in UAE that are part of a multinational group involved in the production of natural resources are expected to be within the scope of UAE CT.
Will branches of foreign banks currently subject to CT at an Emirate level, be impacted on transition to the new CT regime?
As per the Corporate Tax FAQs issued by Ministry of Finance UAE, foreign corporate income tax paid on income that is taxable in the UAE will be allowed as a CT credit in the UAE.
Will CT apply to government-owned entities?
The FAQs on Corporate Tax issued by the Ministry of Finance in UAE have not mentioned any exemptions to entities owned by the UAE government. However, it can be said that government owned entities whose principal purpose is to fulfil a government function and not conduct business will be exempt from the Pillar Two rules under the CT regime in UAE.
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