Corporate Tax in UAE

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Corporate Tax in UAE - Expert Taxation Services for Businesses

If you have a business in the UAE, then corporate tax is an essential aspect of your financial management. Your business needs to follow the latest corporate tax regulations to maintain legal stability.

Understanding Corporate Tax in UAE

In the UAE, the Federal Tax Authority (FTA) handles corporate tax. It applies to all companies engaged in commercial activities in the UAE. Businesses pay corporate tax on the profits they make, contributing fairly to the UAE’s economic development. Businesses need to accurately calculate and report their taxable income to follow the tax regulations.

Reflechir Corporate Tax Services

With our comprehensive corporate tax services, we help you meet and optimize your business’s tax obligations and position. Our services include:

Corporate Tax Registration: All taxable persons are required to register for UAE Corporate Tax and obtain a Corporate Tax Registration Number as per the UAE Corporate tax law and following implementing decisions. The Federal Tax Authority may also request certain Exempt Persons to register for UAE CT. At Reflechir, we assist businesses getting registered for the UAE Corporate Tax and stay tax compliant.
Corporate Tax Planning and Compliance: Our tax experts work closely with your business to design a practical tax planning strategy. We help find potential tax-saving options that maximize your profits. We assist in preparing and filing accurate tax returns on time. This minimizes the risk of penalties and ensures your business's tax compliance.
Corporate Tax Advisory: Our team advises on various tax matters, including tax incentives, allowances, deductions, and exemptions available to businesses in the UAE. We analyze your business operations and structure to provide customized tax advice. This not only aligns with your financial goals but also maximizes tax efficiency.
Corporate Tax Audit Support: In the event of a tax audit, our team provides extensive support to ensure a smooth and successful audit process. We prepare the required documentation, liaise with tax authorities, and address any concerns raised during the audit. Our goal is to help you navigate the audit process with confidence and reduce potential tax liabilities.
Corporate Tax Dispute Resolution: In the case of tax disputes, our tax professionals can represent your business and negotiate with the tax authorities on your behalf. We strive to resolve disputes efficiently and amicably, minimizing the impact on your business operations.

Why Choose Reflechir Consultancy for Corporate Tax Services in UAE?

Expertise and Experience: Our team consists of highly skilled tax professionals with extensive knowledge of UAE tax regulations. We stay up-to-date with the latest changes in tax laws and provide accurate advice that is exclusive to your business needs.
Tailored Solutions: Every business is unique, and this is why you need personalized tax solutions for your business. We have extensive experience with different types of businesses in the UAE. This gives us the capability to optimize your tax position and ensure compliance with the tax regulations in UAE.
Proactive Approach: We have a farsighted approach to tax planning. This helps you identify tax-saving opportunities and cut potential tax liabilities in the future. Reflechir's aim is to help your business achieve tax efficiency and financial success.
Compliance and Composure: With Reflechir by your side, you can rest assured that your business is in full adherence with corporate tax regulations. We handle all aspects of tax submission, enabling you to focus on your core business activities with peace of mind.

Contact Reflechir Consultancy today to discuss your corporate tax needs and explore how we can support your business’s success.

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In January 2022, the UAE Finance ministry announced the first-ever Federal Corporate Tax (CT) that will be implemented from 1st June 2023 and after. For the past several years the UAE government has made significant changes in its tax structure starting from 2018 when VAT was introduced.

To understand the process, it is important to understand the Corporate Tax first,

What is Corporate Tax?

Corporate Taxes are a form of direct tax that is levied on the income or profit of the businesses. The taxes are based on taxable income after expenses have been deducted.

Why Corporate Tax?

There are various reasons for implementing CT by the UAE government.

A significant source of tax revenue for the government
Accelerate the country’s development
To align with international standards for tax transparency
To generate revenue to meet its strategic goals

Scope

The corporate tax would be applied to,

All individuals and businesses conducting businesses activities under a commercial trade license
Applied to legal entities i.e. Limited liability companies, Private Shareholding companies, and other entities having a separate legal identity
Limited liability Partnerships, the entity will be subject to tax
Income earned by individuals under a freelance license
Foreign individuals & entities doing business in UAE in a regular manner
The Banking operations
The Freezone businesses having PE in the mainland will be within the scope of the UAE corporate tax

Exemptions

The following will be exempt from CT

UAE Federal Government, Emirates Governments, and its departments
Government-owned companies
Businesses involved in the extraction and exploitation of natural resources
Charities. Not for Profit organizations
Individual person salary, income earned from capital gains, dividends, interests or other investment returns
Interest on income earned from bank deposits or saving schemes

Corporate Tax Rates

The corporate tax rates are,

0% on Taxable income up to AED 375,000
9% on Taxable income above AED 375,000
A different tax rate would be applicable to MNCs having consolidated business revenue in excess of EUR 750 M

Tax Administration

UAE Federal Tax Authority would be responsible for administering and collecting corporate taxes. Businesses subject to CT can register with FTA and get the tax registration number. Payment to settle tax liability is to be made within 9 months of the end of the tax period.

How a Business prepares for CT

The new Federal Corporate Tax will affect strategic business planning and business operations. The expected CT implementation date is 1st June 2023 means all businesses must prepare their books before that. Now the need arises for businesses to understand this whole new scenario and define strategic goals that reflect CT and its impact.

The new corporate tax regime insists on maintaining books of accounts and their audit, which was not strictly followed by many businesses in the UAE.

There are a few steps for businesses in UAE to prepare for CT,

Identify CT, its impact on the business operations, and business defined goals
Identify skills and resource gaps in the business, try to upskill existing people
Keep adequate records
Track all income and expenses
Hire a professional certified accountant to keep accounting records, calculate and file accurate taxes
Incorporate tax planning and keep reserves
Audit your books by a professional Auditor