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Reliable and precise tax and accounting solutions tailored to your business needs.
In the UAE, adherence to tax laws and regulations is mandatory. Proper tax and accounting practices ensure that your business meets all statutory requirements, helping you avoid penalties and legal issues. With the introduction of VAT and corporate taxes, meticulous tax management is more crucial than ever.
Accurate accounting provides a clear picture of your company’s financial health. This transparency helps in making informed decisions, managing cash flow, and planning for future growth. Precise financial records are the backbone of any successful business, aiding in everything from budgeting to securing loans or investors.
Understanding VAT and Corporate Tax is crucial for businesses operating in the UAE. VAT (Value Added Tax) is a consumption tax applied to goods and services, while Corporate Tax is a direct tax imposed on the net income or profit of corporations. Navigating these taxes effectively ensures compliance and financial efficiency for your business.
Dividend Income from UAE Entities
Income earned from dividends or profit distributions received from UAE-incorporated or resident juridical persons as specified in Article 22 of the Corporate Tax Law is exempt from tax.
Dividend Income from Foreign Participating Interests
Earnings from dividends or profit distributions received from a significant stake (participating interest) in a foreign juridical person are exempt from tax.
Capital Gains from Subsidiary Shares
Capital gains realized from the sale of shares in a subsidiary company are exempt, facilitating investment and reinvestment strategies.
Foreign Exchange Gains
Gains or losses from foreign exchange transactions related to a domestic or foreign participating interest are exempt from tax.
Non-Resident Earnings from International Transportation
Income earned by non-residents from the operation or leasing of ships or aircraft in international transportation is exempt from tax.
Foreign Permanent Establishment (PE) Income
Earnings made by a Permanent Establishment (PE) or foreign branch, where an election has been made to claim the ‘Foreign Permanent Establishment’ exemption, are exempt from tax.
Definition: Freezone Persons—entities established in a UAE Free Zone—can qualify for a zero percent tax rate under specific conditions.
Criteria for Qualification:
Derive “Qualifying Income”: Income from transactions with other Free Zone Persons or from domestic and foreign sources linked to qualifying activities specified in Ministerial Decision No. 139 of 2023.
Economic Substance: Maintain adequate economic substance in the Free Zone.
Non-Election for Standard Rates: Not elect to be subject to standard Corporate Tax rates.
Compliance with Transfer Pricing: Comply with transfer pricing requirements.
Exclusions: Income derived from excluded activities specified in Ministerial Decision No. 265 of 2023 does not qualify.
De Minimis Threshold: Non-qualifying income must not exceed 5% of total revenue or AED 5 million, whichever is lower.
Definition: Two or more taxable entities can establish a ‘Tax Group’ and be treated as a single entity for Corporate Tax purposes.
Criteria for Formation:
Residency and Documentation: Both the parent firm and branches must be resident legal entities within the UAE jurisdiction, operating on the same fiscal year and adhering to identical accounting practices.
Ownership Requirements: The parent entity must possess a minimum of 95% of the subsidiary’s equity, voting rights, and claims to earnings and assets.
Exclusions: Exempt Entities or Qualifying Free Zone Entities cannot form part of a Tax Group.
Taxable Earnings Calculation: The leading company should compile combined financial statements for all subsidiaries within the Tax Group, disregarding intra-group transactions.
Ensure your business is fully compliant with UAE corporate tax regulations. Our team assists with the seamless registration process, keeping your company legally protected and up-to-date with all tax requirements.
Navigate the complexities of VAT with ease. We handle the entire VAT registration process, ensuring your business meets all regulatory obligations and avoids any potential penalties.
Maintain accurate financial records with our professional bookkeeping and accounting services. We provide meticulous attention to detail, ensuring your financial data is precise and up-to-date.
Gain confidence in your financial health with our comprehensive corporate auditing services. Our experienced auditors provide thorough reviews, ensuring transparency and accuracy in your financial statements.
Streamline your VAT return filing with our expert assistance. We ensure timely and accurate submissions, helping you stay compliant and avoid any potential fines.
Enhance your business strategy with our financial and management consulting services. We offer expert advice and insights to help you make informed decisions and drive your company’s growth and success.
Choose Infibiz CSP for reliable, efficient, and comprehensive tax and accounting services that support your business growth and financial health in Dubai.
Ensure you hire the best for your business setup in Dubai. With Infibiz, you will fast-track your path to business success, just like our satisfied clients. Read their reviews and discover why they trust us with their business needs. Write your review.
The UAE introduced corporate tax to diversify its revenue sources beyond oil and natural resources. This aligns with the country’s efforts to establish a more sustainable and balanced economy.
No, corporate tax is different from VAT. Corporate tax is levied on the net profits of businesses, while VAT is a consumption tax applied to the sale of goods and services. Corporate tax is mandatory for all companies, whereas VAT applies only once certain revenue thresholds are met.
Corporate tax applies to:
The UAE corporate tax rates are as follows:
Start your business journey with confidence, knowing Infibiz is here to simplify every step of the process.
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