Corporate Tax Advisory
Corporate Tax Services In UAE
The Ministry of Finance has announced the introduction of a 9% federal corporate tax in UAE on business profits with a threshold of AED 375,000. This comes into effect from the financial year beginning 1St June of 2023.
The Corporate Tax in UAE will be payable on the profits of UAE businesses as reported in the financial statement prepared by internationally accepted accounting standards. This means now financial statement should be audited on time.
Considering the importance of corporate tax registration and other related service in UAE, our company act as the best corporate tax consulting services in UAE. Our expert consultants will guide you through the tax assessment, registration, and return filing process.
Scope Of Tax
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Corporate Tax applies to a taxable person. It is defined as per Article -1 of Decree Law.
A taxable person can be a Resident or Non-Resident.
- Resident Person
- Juridical person established/ recognized in UAE
- Foreign Juridical Person effectively managed and controlled in UAE
- Individuals conducting any business activity
- Unincorporated partnership that has elected to be a taxable person
- Non-Resident Person
A person other than a resident person having following the income:
- UAE sourced income
- Permanent establishment in UAE
- Nexus in UAE
Exempt Person
- Government Entities (subject to the condition of Article -5)
- Government Controlled Entities (subject to conditions as per article -6)
- A person engaged in extraction. business of natural resources (subject to conditions of Article -7)
- A person engaged in non-extraction business of natural resources. (subject to conditions of article -8)
- Public Benefit Entities (subject to conditions as per article -9)
- Investment Fund (subject to condition as per article -10)
- Public or private pension or social security funds meet certain conditions.
Corporate Tax Base and Rate:
- 0% on Taxable income up to 3,75,000.
- 9% on taxable income exceeding 3,75,000.
Small Business Relief
The relief is intended to support start-ups and other small or micro businesses by reducing their Corporate Tax burden and compliance costs. Article 21 allows a resident person to elect for small business relief, resulting in the resident person being treated as having no taxable income in respect of each relevant tax period where the below two conditions are satisfied as per Ministerial Decision NO 73 of 2023:
- The relief under this article will only apply in tax periods ending on or before 31st December 2026.
- The Revenue threshold for the relevant and prior tax period is AED 3,000,000 and;
- The Resident Person must not be a member of a multinational group (that is required to prepare a country-by-country report) or a Qualified Free Zone Person.
- Other conditions as per article 21.
Transfer Pricing
Corporate Tax law provides for a robust TP regime in line with the internationally accepted OECD Guidelines and the concept of the “arm’s length” principle. The TP rules would be apply to transactions or arrangements between related parties and connected persons.
TP Methodologies
CT Law provides for one or more of the following methods to be used in arriving at an arm’s length range:
- The Comparable Uncontrolled Price Method (CUP)
- The Resale Price Method (RPM)
- The Cost-Plus Method (CPM)
- The Transactional Net Margin Method (TNMM)
- The Transactional Profit Split Method (TPSM)
A taxable person may use any other method if none of the above can be reasonably applied.
Free Zone
- Free Zone businesses in UAE will be subject to corporate tax. However, it has been clarified that the corporate tax regime will continue to honor the corporate tax incentive currently being offered to free zone businesses that comply with all regulatory requirements and that do not conduct businesses in mainland UAE.
- Businesses established in a free zone will be required to register and file a corporate Tax Return.
Why Do You Need Corporate Tax Services in UAE
The following are some benefits of using corporate tax services in UAE:
- With the help of corporate tax services in the UAE, companies can avoid fines and legal problems by adhering to the intricate tax laws and regulations established by the government.
- A comprehensive understanding of company tax regulations allows them to offer precise guidance and support for tax planning and preparation.
- Maximizes their tax benefits and makes the most use of their financial resources.
- Helps to avoid penalties and legal issues.
- Provide expert guidance on tax-related issues.
Make smooth and seamless transition with AAC’s to the new era of Direct Tax.
Preparation for corporate tax early will avoid higher implementation costs and reduce the pressure on the internal team to complete these preparations within a tight last-minute deadline.
We have a qualified and expert team, so you can get expert advice regarding registration, taxability, exemption, qualification under the free zone, and other complicated matters.
Every firm is unique in its objectives and approaches and we at Algorithm Accounting and Consultancy are acutely aware of this. As a result, we tailor our company tax solutions to the needs of each client. Our team of tax professionals offers you customized solutions that advance your organization by fusing technical know-how with commercial understanding.
Along with accounting and bookkeeping services in Dubai, Algorithm Accounting has an expert team of Corporate tax advisors in UAE who are up to date with Tax laws prevailing in UAE and the tax laws that are going to be implemented in the future. Our expert tax consultants in Dubai have already started offering corporate tax consultancy services to their clients to enable them to make the necessary adjustments in advance and prepare for the new tax system.
With our excellent financial services, we are highly recommended by clients for all business-related queries, especially Corporate Tax Services in the UAE. To get more details contact our accounting consultancy service in Dubai, UAE