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What is the rate of corporate tax in the UAE?
- 0% for taxable income up to AED 375,000
- 9% for taxable income above AED 375,000 and
Toggle titlesasWhen will the UAE Corporate Tax (CT) be applicable to businesses with financial years that do not align with the standard calendar year?
Example 1:
If a business’s financial year begins on 1st July 2023 and ends on 30th June 2024, it will become subject to UAE Corporate Tax (CT) starting from 1st July 2023. This date marks the commencement of the first financial year that falls on or after 1st June 2023.
Example 2:
For a business with a financial year following the standard calendar year, starting on 1st January 2023 and ending on 31st December 2023, it will become subject to UAE Corporate Tax (CT) from 1st January 2024. This date corresponds to the beginning of the first financial year that starts on or after 1st June 2023.
Should you pay corporate tax?
If your buisness’s taxable net profit is more than 375,000 AED, you are required to pay 9% of the net profit as corporate tax on or after 1 June 2023.
When will corporate tax in UAE be implemented?
As per the latest announcement, corporate tax will be in full effect from the financial year starting on or after 1 June 2023. For businesses that have a financial year starting on 1 January 2023 and ending on 31 December 2023, they will be subjected to corporate tax from 1 January 2024.
How often should you file their corporate tax returns?
Only one corporate tax return is required to be filed per tax period. The corporate tax return will generally be due within nine months following the end of a tax period.
Will UAE CT be applicable to businesses in each Emirate?
The UAE CT is a Federal tax and will therefore apply across all Emirates
If a business has earned taxable income of AED 400,000 in a given financial year, what will be the UAE CT amount payable?
The CT liability will be calculated as follows:
- Taxable income of AED 0 – AED 375,000 at 0% = AED 0
- Portion of taxable income exceeding AED 375,000 (i.e. AED 400,000 – AED 375,000 = AED 25,000) at 9% = AED 2,250
The UAE CT liability for the year will be AED 0 + AED 2,250 = AED 2,250
The final amount of UAE CT payable will be reduced by any foreign taxes incurred on the relevant income (see below under ‘Tax Credits’ section)
The CT liability will be calculated as follows:
- Taxable income of AED 0 – AED 375,000 at 0% = AED 0
- Portion of taxable income exceeding AED 375,000 (i.e. AED 400,000 – AED 375,000 = AED 25,000) at 9% = AED 2,250
The UAE CT liability for the year will be AED 0 + AED 2,250 = AED 2,250
The final amount of UAE CT payable will be reduced by any foreign taxes incurred on the relevant income (see below under ‘Tax Credits’ section)
Corporate Tax Registration : Dubai & Abu Dhabi
The Ministry of Finance has announced the introduction of a 9% federal corporate tax in the UAE on business profits with a threshold of AED 375,000. This comes into effect from the financial year beginning 1st June 2023.
UAE Corporate Tax is amongst the most competitive in the world and the lowest in the GCC. The UAE CT is a Federal tax and will therefore apply across all Emirates. The Federal Tax Authority (FTA) will be responsible for the administration, collection, and enforcement of UAE CT.
Call Us : +971 4 4518600 `{`Dubai`}`, +971 2 6756 726 `{`Abu Dhabi`}` Mob : +971 50 627 3556 or Email : info@saifaudit.com
UAE Introduces Corporate Tax to Enhance Fiscal Competitiveness and Foster Financial Discipline
The UAE Ministry of Finance has recently implemented the Corporate Tax, a direct tax applicable to the net income of corporations and businesses. Commencing on 9th December 2022, this tax measure will take effect for financial years starting on or after 1st June 2023. In certain jurisdictions, it is also referred to as the “Business Profits Tax” or “Corporate Income Tax.”
Despite its implementation, the Corporate Tax in the UAE maintains its distinction as the world’s lowest tax rate, providing businesses with a reduced compliance burden. This initiative is poised to bolster the UAE’s revenue, an imperative move to maintain competitiveness in the ever-evolving global business and investment landscape. Moreover, this measure is expected to instill financial discipline within corporate entities, promoting improved record-keeping practices.
The decision to introduce Corporate Tax underscores the UAE’s commitment to adhering to international tax transparency standards while simultaneously safeguarding the interests of start-ups and small businesses within the country. This thoughtful balance aims to fortify the UAE’s position as a business-friendly destination while contributing to the overall growth and stability of its economy.
UAE Corporate Tax Registration Timeline
Why Saif Chartered Accountants for Corporate Tax Registration in the UAE?
Saif Chartered Accountants is a leading firm of chartered accountants in the UAE with over 20 years of experience in corporate tax registration. We have a team of experienced and qualified accountants who can help you with every step of the registration process, from understanding the requirements to filing your returns.
We offer a comprehensive range of corporate tax registration services, including:
- Assistance with understanding the corporate tax requirements in the UAE
- Preparation of all necessary documentation
- Filing of corporate tax returns
- Ongoing tax compliance support
We are committed to providing our clients with the highest quality of service and the most competitive rates. We understand that corporate tax registration can be a complex process, and we are here to make it as easy as possible for you.
If you are looking for a reliable and experienced firm to help you with your corporate tax registration in the UAE, then Saif Chartered Accountants is the right choice for you. Contact us today to learn more about our services.
Here are some of the reasons why you should choose Saif Chartered Accountants for corporate tax registration in the UAE:
- We are a leading firm of chartered accountants with over 20 years of experience in the UAE.
- We have a team of experienced and qualified accountants who can help you with every step of the registration process. (Rated as one of the best accounting firms in UAE)
- We offer a comprehensive range of corporate tax registration services.
- We are committed to providing our clients with the highest quality of service and the most competitive rates.
- We understand that corporate tax registration can be a complex process, and we are here to make it as easy as possible for you.
Contact us today to learn more about our services and how we can help you with your corporate tax registration in the UAE.
We are also one of the registered Tax Agent in UAE under FTA (Federal Tax Authority). Tax Agent Number : Tax Agency Number (TAN) 30004113
Our Tax Consultancy Services
We are affiliated to SGA World, a professional services firm helping clients develop better business strategies that build on their unique inherent and potential strengths the philosophy of the company, how it is organized to understand market opportunities and customer needs, and the methods it uses to deliver products and services. We help companies to continually adapt and improve. SGA World uses a commonsense methodology developed from its broad international experience with businesses.
Registration Requirements for Corporate Tax in UAE
Corporate tax in the UAE is applicable to the taxable income of businesses, with varying rates based on income levels and certain multinational corporations. The Corporate Tax registration criteria are as follows:
1. Businesses with taxable income up to AED 375,000 are exempt from corporate tax, enjoying a 0% tax rate.
2. For businesses with taxable income exceeding AED 375,000, a 9% corporate tax rate is applied to the surplus amount.
3. Multinational corporations falling under OECD Base Erosion and Profit-Sharing laws within Pillar 2 of the BEPS 2.0 framework, with combined worldwide revenues exceeding AED 3.15 billion, are subject to a 15% corporate tax rate.
Companies falling under any of these categories are required to register for Corporate Tax in the UAE, ensuring compliance with the tax regulations in the country.
Documents required for UAE Corporate Tax Registration
To initiate the registration process for Corporate Tax in UAE, businesses are required to furnish specific documents through the online platform. The following documents are essential for Corporate Tax Registration:
1. Valid copy of the Trade License (not expired).
2. Passport copy of the owner/partners holding the license (not expired).
3. Emirates ID of the owner/partners holding the license (not expired).
4. Memorandum of Association (MOA) or Power of Attorney (POA).
5. Contact details of the concerned person (Mobile Number and E-mail).
6. Contact details of the company, including the complete address and P.O. Box.
7. Corporate Tax Period.
Ensuring the availability and accuracy of these documents will streamline the Corporate Tax registration process for businesses operating in the UAE
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Are you in search of a corporate tax consultant in Dubai or Abu Dhabi?
Saif Chartered Accountants can be your reliable partner for all your corporate tax needs. Our team of experienced and skilled professionals is well-versed in UAE tax laws and regulations, providing expert guidance and tailored solutions to meet your business’s tax obligations.
Contact us today to schedule a consultation and discover how Saif Chartered Accountants can assist you in optimizing your tax strategies and ensuring compliance with the UAE corporate tax regime.
Contact Information: Email: info@saifaccountants.com Phone: +971 4 4518 600 (Dubai) / +971 2 6756 726 (Abu Dhabi) Website: https://www.saifaudit.com | https://abudhabi.saifaudit.com