Comprehensive Tax and Accounting Services

Reliable and precise tax and accounting solutions tailored to your business needs.

What is the importance?

Tax and Accounting in UAE

Tax and accounting are critical components for any business operating in the UAE, offering a framework for financial health, legal compliance, and strategic growth.

Tax and Accounting in UAE

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 UAE Corporate Tax Exemptions and Benefits

UAE VAT and Corporate Tax

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.

Exempt Income

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.

 

Corporate Tax for Freezone Persons

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.

 

Corporate Tax for Groups

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.

 

Tax Income Deductions

General Deductions: Costs associated with generating taxable revenue are typically deductible, subject to specific limitations and exclusions outlined in the Corporate Tax Regulations.

Long-term Assets: Expenditures on assets with long-term value are accounted for through depreciation or amortization.

Mixed-use Expenditures: Costs serving both personal and business functions must be appropriately divided.

Business Expenses: Deductible business expenses include donations to specified charities, interest expenditure (subject to caps), necessary royalty payments to foreign group companies, irrecoverable VAT, market-rate remuneration, and certain doubtful debts.

Losses as Future Deductions: Businesses can report losses as future tax-deductible expenses based on the chosen accounting method.

Employee Entertainment: Employee entertainment costs related to business activities are typically 50% deductible.

Government Fees: Government, business setup, and license renewal fees are deductible.

 

Our Services

What We Offer in Tax and Accounting?

Partner with us to navigate the complexities of tax and accounting in UAE, and experience the benefits of accurate, efficient, and compliant financial management.

Corporate Tax Registration

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.

Corporate VAT Registration

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.

Bookkeeping & Accounting

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.

Corporate Auditing

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.

VAT Return Filing

Streamline your VAT return filing with our expert assistance. We ensure timely and accurate submissions, helping you stay compliant and avoid any potential fines.

Financial & Management Consulting

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.

Need Fast Tax and Accounting Services in Dubai?

Get your tax and accounting needs sorted efficiently and accurately with our expert services in Dubai. Our team of professionals is dedicated to providing timely, reliable, and comprehensive solutions tailored to your business requirements. Ensure compliance, streamline your financial processes, and focus on what matters most – growing your business. Contact us today for swift and effective tax and accounting assistance.

Business setup in Dubai

Why Choose Infibiz

For Tax and Accounting Services in Dubai, UAE

Choose Infibiz CSP for reliable, efficient, and comprehensive tax and accounting services that support your business growth and financial health in Dubai.

  • Expert Knowledge Our team consists of highly skilled professionals with extensive experience in UAE tax laws and accounting standards, ensuring accurate and compliant services.
  • Tailored Solutions We understand that every business is unique. We offer customized tax and accounting solutions that cater specifically to your business needs and goals.
  • Efficiency and Accuracy We streamline your financial processes, providing fast and accurate services that save you time and minimize the risk of errors.
  • Comprehensive Services From bookkeeping and tax filing to financial reporting and auditing, we offer a full range of tax and accounting services to support your business at every stage.
  • Proactive Approach We don’t just react to changes; we anticipate them. Our proactive approach ensures that your business is always prepared for any regulatory updates or financial challenges.
  • Transparent Pricing We offer clear and competitive pricing with no hidden fees, providing you with excellent value for your investment in our services.

Client Testimonials

Join 2,500 Happy Customers

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.

Our Collaboration

Government Bodies

We collaborate closely with key government bodies in Dubai and across the UAE to facilitate seamless business operations.

Government Bodies - infibiz

FAQs

Your Questions Answered by Infibiz Experts

Our team of experts fields common questions from people all over the globe about company formation in the UAE. Get clear and concise answers to help you navigate the Corporate Tax process.

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:

  • UAE-based corporations and legal entities.
  • Individuals engaged in business activities within the UAE.
  • Foreign entities with a Permanent Establishment in the UAE. Free zone companies are also subject to corporate tax with certain specific exemptions.

The UAE corporate tax rates are as follows:

  • 0% for businesses with net annual profits up to AED 375,000.
  • 9% for businesses with net annual profits above AED 375,000.
  • A minimum of 15% for large multinational companies with global revenues exceeding EUR 750 million.

To register for corporate tax, businesses must complete the necessary forms and submit required documents through the Federal Tax Authority (FTA) website. Required documents include the entity’s Emirates ID, trade license, passport, financial records, details of business activities, and corporate structure. Once approved, the business will receive a tax registration number (TRN).

Documents required for corporate tax registration include:

  • Emirates ID
  • Trade license
  • Passport
  • Financial records
  • Details of business activities
  • Corporate structure information

Yes, specific exemptions apply, such as earnings from dividends or other profit distributions from UAE or foreign entities, and certain capital gains. Additionally, qualifying Free Zone Persons can benefit from a 0% tax rate under specific conditions.

Approval for corporate tax registration typically takes about 20 days. If additional information is needed, the process may extend by another 20 days.

Free Zone companies can qualify for a 0% tax rate if they meet specific criteria, such as deriving qualifying income, maintaining adequate economic substance in the Free Zone, and not electing to be subject to standard corporate tax rates.

 

Businesses must file their corporate tax returns annually. The process involves calculating taxable income, applying the relevant tax rate, and submitting the necessary documentation to the Federal Tax Authority.