Kediataxconsultants

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SERVICES

CORPORATE TAX-

Corporate Tax  is a form of direct tax levied on the net income or profit of corporations and other businesses. A competitive Corporate Tax regime based on international best practices will cement the UAE’s position as a leading global hub for business and investment. The Ministry of Finance UAE announced on 31st Jan. 2022 about introduction of corporate tax on business profit. Introducing a Corporate Tax regime reaffirms the UAE’s commitment to meeting international standards for tax transparency and preventing harmful tax practices.

The UAE Corporate Tax is a Federal tax and will therefore apply across all Emirates. All activities undertaken by a legal entity will be deemed “business activities” and hence be within the scope of UAE Corporate Tax.

These will be the corporate tax rates in UAE-

  • 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 (a multinational corporation that has consolidated global revenues in excess of EUR 750m ( AED 3.15 bn) that meet specific criteria set with reference to ‘Pillar Two’ of the OECD Base Erosion and Profit Shifting project.

The final amount of UAE Corporate Tax payable will be reduced by any foreign taxes incurred on the relevant income.

Taxability of individuals –

  • UAE Corporate Tax will not apply on an individual’s salary and other employment income (whether received from the public or private sector).
  • The investment in real estate by individuals in their personal capacity should not be subject to UAE Corporate Tax provided the individual is not required to obtain a commercial license or permit to carry out such activity in the UAE.
  • Individuals will not be subject to UAE Corporate Tax on dividends, capital gains and other income earned from owning shares or other securities in their personal capacity.
  • Interest and other income earned by an individual from bank deposits or saving schemes will not be subject to UAE Corporate Tax.

Taxability of freezone-

Free zone businesses will be subject to UAE Corporate Tax, but the UAE Corporate Tax regime will continue to honour the Tax incentives currently being offered to free zone businesses that comply with all regulatory requirements and that do not conduct business with mainland UAE. A business established in a free zone will be required to register and file a Corporate Tax return. The UAE Corporate Tax treatment that will apply to businesses in free zones will be the same across all free zones.

How KTC Can Help:

Introduction of Corporate tax will change the landscape of UAE’s business model significantly. International groups which are having business setups in UAE are making evaluation of the impact and assessing the required changes in their business models. The Federal Tax Authority is in the process of releasing information, relevant clarifications, laws and regulations. In KTC UAE, our team of experts can help you in assessing and dealing the challenges which will come due to the introduction of a Corporate Tax.

  1. Corporate tax consultancy services:
  • Analysis of Impact of Corporate Tax on business and applicability thereto including mainland and free zone (including financial free zone) business set up.
  • Assessment about the availing exemptions from the corporate tax
  • Advise on creating tax Group in respect of Corporate Tax and their related compliance.
  • Assist in restructuring the business/operational model from the Corporate Tax perspective and advice about the Withholding taxes.
  • Advise on availing Foreign Tax Creditpaid by taxpayers in other countries
  1. Corporate Tax Compliance Services:
  • Providing assistance and help in getting registered for Corporate Tax before the relevant authorities
  • Computation of taxable income according the UAE corporate tax law’s and regulations.
  • Preparation and filing of tax returns within the time frame prescribed by the FTA.
  • Assisting in filing the response against the notices received from tax authorities
  • Representing the taxpayers before tax authorities and arguing on behalf of taxpayers.