Tax Services
Corporate tax will be implemented in UAE from 1st June 2023 for all UAE businesses. Even though corporate tax is new to UAE, it’s not new to us. We have over 35 years of experience in handling taxes.
Difference Between VAT and Corporate Taxes
Do you know that businesses who are registered for VAT would still need to register for corporate taxes.
Corporate Taxes
Direct tax on taxable income
Annual filling and payment
Paid directly to the government
0% and 9% based upon applicability
VAT
Indirect tax on sale of goods and services
Most of the time quarterly and payment
Collected from customer, then paid to
government
0% and 5% based upon applicability
Who Must Pay Corporate Taxes in UAE ?
In UAE Federal tax structure is applicable to all business operations within UAE.
- Businesses and individuals conducting business activities under a commercial license in the UAE.
- Free zone businesses. However, there are special incentives if the freezone companies comply with regulatory requirements and if they don’t conduct business with UAE.
- Foreign companies and individuals only if their business is effectively managed and controlled in the UAE.
Tax Rates
| Resident taxable person | |
|---|---|
|
Taxable income up to AED 375,000 |
0% |
|
Taxable income over AED 375,000
|
9% |
| Free zone | |
|---|---|
|
Qualifying income |
0% |
|
Taxable income
|
9% |
Registration and Filing Returns
All taxable and exempted person who are required to register must be registered for corporate taxes and obtain corporate tax ID. Corporate taxes return must be filed within nine months after the conclusion if the applicable period and payment must be made with the same deadline.
When Should You Pay Corporate Taxes?
Businesses will become subject to UAE corporate tax from their first financial year (FY) that start on or after 1st June 2023. Remember to check your MOA for the correct financial year end.
Small Businesses Relief
The small business relief rule is aimed at supporting small businesses by reducing their compliance burden and cost. However, all small businesses would still be required to register and file a corporate tax return. If your business meets below threshold, you can be considered as a small business.
- Revenue should be less than AED 3 million in the relevant tax period.
- The applicability of this revenue threshold will start from 1st June 2023 till tax periods ending on or before 31st December 2026.
- Revenues should be calculated based upon IFRS.
- Carry forward tax losses are not allowed.
- Not applicable to a “qualifying free zone person”.