Corporate Tax Compliance Services UAE
The tax law in the UAE is new, and it has its own specific regulations. Have you chosen your tax consultant?
We provide corporate tax compliance services for new and existing businesses. From tax assessment to filing, we have your back.
Are you confused by the tax decrees and articles? Get expert help from a corporate tax compliance service provider in Dubai to navigate the decrees and articles.
Advantages of Corporate Tax Compliance Services
What is the Corporate Tax in the UAE?
On June 1, 2023, the UAE introduced a corporate tax policy that imposes a 9% tax on business profits exceeding AED 375,000 ($100,000). This move marks a significant shift in the country’s corporate tax framework, which historically offered a tax-free environment for most businesses.
Companies generating less than AED 375,000 in annual profits remain exempt from this tax, allowing smaller businesses and startups to continue benefiting from favorable conditions, making corporate tax compliance services essential for businesses navigating these new regulations.
However, multinational corporations with profits exceeding AED 2.9 billion ($793 million) are subject to a higher tax rate of 15%. This aligns with the Global Minimum Corporate Tax Rate Agreement, an international initiative aimed at preventing large multinational corporations from shifting profits to low-tax jurisdictions.
The UAE’s adoption of this framework demonstrates its commitment to global standards while ensuring it remains an attractive destination for foreign investment and international business activities, where corporate compliance service providers in Dubai can offer valuable advice.
The corporate tax applies to profits earned from the financial year starting on or after June 1, 2023. For companies whose tax year begins in January, the corporate tax will be levied on revenues generated from January 1, 2024, onwards. This phased approach allows businesses time to adapt to the new regulations with the help of financial compliance services in Dubai, ensuring necessary accounting and financial adjustments.
The introduction of this corporate tax regime represents a key milestone in the UAE’s economic strategy, aimed at broadening its revenue base beyond oil while maintaining its competitive edge as a global business hub. Corporate tax compliance services will play a critical role in helping businesses understand and comply with these changes.
It reflects the UAE’s broader efforts to diversify its economy and align itself with international tax practices. Businesses operating in the UAE are encouraged to review their financial strategies and ensure conformity with the new UAE financial compliance requirements. By seeking advice from experienced corporate tax compliance service providers in Dubai, businesses can avoid penalties and optimize their corporate tax liabilities under the new regulations.
What Businesses Are Exempt from the Corporate Tax?
Certain businesses are exempt from corporate tax in the UAE, and corporate tax compliance service providers can help clarify these exemptions:
- Any business generating less than AED 375,000 ($100,000) in profits.
- Any government institution and organization
- Any business that promotes social and charitable issues.
- Any business directly owned and controlled by the UAE government.
- Any business involved in mining or extractive activities.
- Any regulated governmental or private organizations that deal with social benefit funds, such as retirement or pension plans.
- Any regulated real estate investment fund.
What is the Difference Between Corporate Tax and VAT?
While corporate tax is a direct tax imposed on a company’s profits, calculated annually based on income after deducting expenses, corporate tax compliance services help businesses ensure accurate filings. Businesses are responsible for submitting corporate tax returns to comply with government regulations.
In contrast, VAT is an indirect tax levied on the sale of goods and services at each stage of the supply chain. Businesses collect VAT from customers and remit it to the government.
Unlike corporate tax, which is filed annually, VAT is typically paid at the point of sale and reported more frequently, such as quarterly or monthly. A corporate tax compliance service provider in the UAE can help clarify the differences between these taxes for businesses navigating both.
What are the Corporate Tax Brackets in the UAE?
Corporate tax compliance service providers can help businesses determine the correct tax rate based on their annual profits. The corporate tax brackets in the UAE are as follows
What is the Corporate Tax for Free Zone Businesses?
Under the UAE’s new corporate tax framework introduced in June 2023, businesses in free zones can maintain their tax-free status if they meet specific conditions.
While free zone companies still benefit from a 0% corporate tax rate on qualifying income generated outside the UAE or within the free zone, they must be aware of the regulations.
If a free zone business conducts transactions with the mainland or generates non-qualifying income, a 9% corporate tax rate applies to that portion of profits. For businesses in free zones seeking professional advice on tax matters, corporate tax compliance services from expert corporate tax consultants in Dubai can help ensure full compliance with the new laws.
Regardless of their tax rate, all free zone businesses must comply with filing requirements, including submitting corporate tax returns to adhere to UAE regulations. Overall, while free zone businesses can enjoy tax incentives, adhering to UAE financial compliance is essential.
| Type of Free Zone | Description | Examples |
|---|---|---|
| Designated Free Zones | Offer a 0% corporate tax rate for a certain period, no customs duties, and 100% foreign ownership. Transactions within these zones are also VAT-exempt under UAE law. | Jebel Ali Free Zone (JAFZA), Dubai Airport Free Zone (DAFZA), Abu Dhabi Airport Free Zone (ADAFZ) |
| Non-Designated Free Zones | Still provide tax-free benefits for a limited time and no customs duties with 100% foreign ownership, but VAT exemptions may not apply. Businesses should consult compliance service providers for VAT and tax guidance. | Dubai Media City (DMC), Dubai Healthcare City (DHCC), Ajman Free Zone |
What is the Corporate Tax for Freelancers?
Freelancers in the UAE must obtain a professional business license, classifying them as legal entities for tax purposes. Unlike individual income, which is generally tax-free, freelancers are subject to a 9% corporate tax on profits exceeding AED 375,000 (approximately $100,000).
Profits below this threshold are exempt from corporate tax, allowing small-scale freelancers to operate without significant tax burdens. Freelancers are still required to comply with UAE corporate tax regulations. Corporate tax compliance services are beneficial for freelancers looking to understand their tax obligations.
They will pay a 9% corporate tax only on earnings above AED 375,000. Corporate tax compliance service providers in Dubai can assist freelancers in managing their tax filings and ensuring full compliance with corporate tax laws.
Our Corporate Tax Compliance Services
Corporate Tax Advice
Filing for Corporate Tax
Corporate Tax Returns
Exempted Revenue
Transfer Pricing Documents
Violations & Penalties
Corporate Tax Compliance Procedure in the UAE
Timeline: 6 to 10 weeks
Step 01 - Takes 1 to 2 weeks
Assessment of Tax Obligations
A tax consultant conducts a thorough analysis of your business activities, financial records, and relevant data to determine which taxes your business is liable for under UAE regulations.
Step 02 - Takes 1 to 2 weeks
Tax Planning
The consultant then explores tax-saving strategies, reviewing opportunities to legally minimize your tax liabilities and optimize your financial structure.
Step 03 - Takes 3 to 4 weeks
Filing of Tax Returns
Accurate and compliant corporate tax returns are prepared, along with audited financial reports. The consultant ensures that all filings are submitted on time and following UAE tax laws.
Step 04 - Takes 1 day
Payment of Taxes
The required corporate taxes are paid promptly, ensuring accuracy in the calculations and avoiding any penalties or late fees.
Step 05 - Varies (if applicable)
Representation in Tax Audits
In the event of a government tax audit, the tax consultant will represent your business, providing expert guidance to ensure a smooth and efficient audit process.
Step 06 - Continuous
Ongoing Support and Advice
Continuous support is offered to address tax-related concerns, ensuring your business remains in compliance with tax laws and regulations while adapting to any changes in the tax landscape.
Documents Required for Corporate Tax Compliance
| Document | Description |
|---|---|
| Business License | Valid business license copy. |
| Tax Certificate | Evidence of government acknowledgment (if applicable). |
| Financial Statements | Audited financial statements for the last year. |
| Tax Returns | Copies of previously filed tax returns. |
| Ownership Documents | ID and passport copies of shareholders and directors. |
| Contracts | Relevant contracts impacting tax liabilities. |
| Bank Statements | Bank statements for the financial year. |
| Expense Records | Invoices and receipts for business expenses. |
| Governance Documents | Board resolutions and meeting minutes. |
