corporate tax registration last date
Friday, 05 January 2024 / Published in Tax

Deadline Alert: Corporate Tax Registration Last Date – [Explained]

For a company initiating its initial tax period on January 1, 2024, and concluding on December 31, 2024, the submission and settlement are required within the timeframe spanning from January 1 to September 30, 2025.

corporate tax registration last date

If you are an entrepreneur, don’t you want to increase the success of your company?  Well, we have something interesting for you!  If you own a company in the UAE, remember that the corporate tax registration deadline is fast approaching, and this is an opportunity that no one will want to miss.

 In this article, we will give you information about the corporate tax registration last date and also discuss how registering your business for corporate tax can help your company grow and profit.  There may be a significant increase. So, get ready and get ready to know the benefits of corporate tax registration which is very important for business success in UAE.  Take advantage of this wonderful opportunity.

Upcoming UAE Corporate Tax Registration Deadline / Last Date: How to & When to Register ?

In the United Arab Emirates, corporations must apply for a corporate tax registration number or ID with the Federal Tax Authority. All firms, regardless of whether they pay 0% or 9% corporation tax, must register for the UAE corporate tax. You can select from a list of corporate tax consultants in the United Arab Emirates who assist you with all forms of tax registration, based on your company’s needs.

Looking for Corporate Tax Consultant In UAE ?

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The return and payment must be filed between January 1 and September 30, 2025, for a firm whose first tax period starts on January 1, 2024, and ends on December 31, 2024.

Corporate Tax Registration Timeline in the UAE

Information about Corporate Tax Registration last date on FTA website is that, Taxable individuals can register on the FTA website up until the date of their initial tax filing. For instance, a taxable individual has 26 months to register, or until February 28th, 2025, if their year ends on May 31st.

Similarly, there is a 33-month registration time available until September 30, 2025, for those taxable persons whose financial year ends on December 31st. A user manual with recommendations and instructions for use the EmaraTax portal has been released by the FTA.

UAE Corporate Tax Deadlines

Under the new corporate tax structure in the United Arab Emirates, taxpayers have up to 21 months from the beginning of their Financial year to get ready to file and pay their taxes.

For instance, Businesses who have a financial year that begins on June 1, 2023, and ends on May 31, 2024, have until February 28, 2025, to file their corporation tax returns and pay their bills.

The return and payment must be filed between January 1 and September 30, 2025, for a firm whose first tax period starts on January 1, 2024, and ends on December 31, 2024.

How Beaufort Associates Can Help for UAE Corporate Tax Registration !!

Your company can benefit from UAE Corporate Tax Registration in several ways.

First and foremost, filing before the last date of Corporate Tax Registration that your company complies with all applicable tax laws and regulations in the United Arab Emirates. This enhances your reputation for sound corporate governance by assisting you in avoiding fines and legal problems.

Our highly specialized Corporate Tax Consultants in the UAE, meticulously crafted to navigate the complex realm of corporate taxation with precision and expertise.

From thorough tax planning to detailed compliance, we provide an all-encompassing array of services customized to suit the unique requirements of your business.

Secondly, corporations must register for corporate tax to be eligible for some government contracts in the UAE. Your business opportunities are increased by completing the registration, which opens doors to possible lucrative government contracts.

Thirdly, having a corporate tax registration increases the legitimacy of your company. It exhibits your dedication to responsibility, openness, and compliance, all of which can improve your standing with partners, investors, and clients.

The information provided herein is for the general information of the user and is provided in good faith. We make no representation or provide warranty of any kind, express or implied, regarding the adequacy, suitability, validity, or completeness of the information. Our advice in regard to UAE corporate tax and value added tax is based on our understanding of the relevant laws and the regulations issued. We cannot be held responsible for new regulations and/or interpretation of existing regulations by the FTA that is not consistent with our advice. Under no circumstance shall we have any liability to any user of this information or to third parties for any loss or damage of any kind incurred as a result of the use or reliance of this information.

corporate tax small business registration
Thursday, 04 January 2024 / Published in Tax

UAE Corporate Tax: Navigating Mandatory Registration for Small Businesses

As the annual tax season approaches, small and medium-sized enterprises (SMEs) in the UAE should focus on enrolling for corporate tax. In this period, numerous small business proprietors in the UAE need to give precedence to the registration process for corporate tax. This applies not only to businesses experiencing losses but also to those that are newly established.

corporate tax small business registration

Now that the UAE’s initial full-year corporate tax period has commenced, businesses should intensify their auditing procedures. Crucially, they must ensure registration with the Federal Tax Authority from a compliance standpoint.

Whether a business is relatively new or undergoing financial losses, it is imperative to register, regardless of whether their annual profit surpasses or falls below the Dh375,000 threshold.

“There still appears to be uncertainty among some SME owners regarding the timing of corporate tax registration, thinking it can wait until their profits reach the Dh375,000 mark,” mentioned a tax consultant. “This perception is incorrect.”

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The registration for corporate tax has been accessible since June of the previous year. According to UAE regulations, businesses following the calendar year as their financial year will settle their 2024 corporate tax by September 2025.

There exists a program known as 'Small Business Relief.'

“Businesses must demonstrate their eligibility by submitting tax returns and maintaining necessary records. If they do not reach the Dh375,000 profit threshold, eligible taxable individuals, such as business owners, have the option to choose ‘Small Business Relief’ on their tax return.

“Upon making this selection, they can then complete a simplified tax return and take advantage of the relief.”

Here is information to be aware of regarding Small Business Relief.

1. To qualify for the relief, the business’s revenue must be below or equal to Dh3 million for the most recent and all previous tax periods.

2. If the revenue surpasses Dh3 million, the business can no longer opt for the relief package, even if the revenue falls below the threshold in subsequent tax periods. However, the fundamental requirement remains unchanged – these businesses still must register for corporate tax.

Throughout recent weeks, the UAE tax authorities have conducted workshops and provided regular guidelines on various aspects of corporate tax, set at 9 percent of the annual profit once the Dh375,000 threshold is exceeded.

“The UAE Corporate Tax applies to all businesses ‘incorporated, effectively managed, and controlled’ in the UAE,” stated Ahmed. “This effectively means registration is mandatory, regardless of the profit or revenue a business generates.

“We strongly recommend companies utilize accounting software as part of their best tax practices, though some companies opt for Excel-based accounting. If a business chooses independent auditors, the costs are competitive in the UAE, but the actual expense depends on the volume and complexity of the operations.”

The Value Added Tax (VAT) registration threshold.

UAE businesses have a track record of complying with Value Added Tax (VAT) requirements. Under the VAT registration, companies had the choice to voluntarily register if their taxable supplies reached Dh187,500 and were required to register if it reached Dh375,000.

However, there is a significant distinction – VAT revolves around a tax levied on each transaction, and the rules of compliance are markedly different from those governing corporate tax.

“Even if a new business is currently being established in the UAE, the owner(s) would be wise to register for corporate tax,” advised a consultant. “It’s a crucial step that requires immediate attention.”

The information provided herein is for the general information of the user and is provided in good faith. We make no representation or provide warranty of any kind, express or implied, regarding the adequacy, suitability, validity, or completeness of the information. Our advice in regard to UAE corporate tax and value added tax is based on our understanding of the relevant laws and the regulations issued. We cannot be held responsible for new regulations and/or interpretation of existing regulations by the FTA that is not consistent with our advice. Under no circumstance shall we have any liability to any user of this information or to third parties for any loss or damage of any kind incurred as a result of the use or reliance of this information.

Guidelines for Corporate Tax UAE Freelancers
Monday, 25 December 2023 / Published in Tax

Preparing for Corporate Tax in the UAE: Guidelines for Consultants, Freelancers, and Influencer - Run Businesses

Individuals residing in the United Arab Emirates (UAE) who earn an income of Dh1 million or more must prepare for corporate tax.

Guidelines for Corporate Tax UAE Freelancers

Individuals situated in the UAE engaged in consultancy or other business services, generating Dh1 million or more annually, are obligated to enroll for corporate tax.

This requirement extends to social media influencers, freelance professionals, and retired individuals involved in consultancy or other work.

In a recent update, the Federal Tax Authority has provided comprehensive information on the conditions under which corporate tax registration applies to sole proprietorships, especially when their business activities lead to annual revenues surpassing Dh1 million.

For example, if an individual working as a self-employed consultant generates a net income surpassing Dh1 million, that income falls within the scope of ‘business or business activity’ conducted by a resident (referred to as a ‘natural person’).

The Federal Tax Authority (FTA) clarified in its guidebook that there is no exemption for profits related to the initial Dh1 million of turnover. However, the individual is eligible for a 0 percent rate on the first Dh375,000 of taxable income.

Under the UAE corporate tax regulations, the 9 percent rate applies to businesses that exceed Dh375,000 in profit over a year.

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The individual is required to register for corporate tax and acquire a Tax Registration Number if the total turnover exceeds Dh1 million within a Gregorian calendar year starting from 2024.

Small Business Relief

In such cases, these individuals may explore the option of applying for the ‘Small Business Relief’ package introduced by the UAE tax authorities earlier. To qualify, the business must not exceed Dh3 million in total revenue for the year, and it should not have reached that revenue milestone in the preceding tax period as well.

Exempted Income Category

The tax authority has consistently clarified that income from wages, real estate investments, or personal investments by an individual will not be subject to corporate tax.

Who Falls Under Corporate Tax?

  1. ‘Natural persons’ residing in the UAE will be subject to corporate tax if their annual income exceeds Dh1 million.
  2. “This may also encompass director remunerations, distinct from directors’ ‘sitting fees,’ which are treated as wages.
  3. Freelancers or individuals engaged in any commercial activity (regardless of residency status) will be subject to the corporate tax law upon reaching the Dh1 million threshold.
  4. Therefore, it is crucial for them to maintain accurate accounts and supporting documentation to demonstrate their earnings and cost details.

So, Who is Required to Register?

“If a natural person’s total turnover from business or business activities conducted in the UAE does not surpass Dh1 million within a Gregorian calendar year, there is no obligation to register for or pay corporate tax on their income,” states the Federal Tax Authority (FTA).

“The turnover may encompass ‘in-kind’ payments valued at market value.” This means that if an influencer receives a complimentary stay at a luxury hotel instead of direct payment, it will still be considered part of the turnover for the year.

Sole Proprietors

“The UAE corporate tax law treats sole proprietorship and the ‘natural person’ as synonymous due to the direct relationship and control over the business. This is also due to their ‘unlimited’ liability for the debts and other obligations of the business.”

Unincorporated Partnerships

Simultaneously, the UAE corporate tax law treats each partner in an ‘unincorporated partnership’ as an individual taxable person.

“However, partners can formally request the FTA to treat the ‘unincorporated partnership’ as a ‘taxable person.’ If the FTA approves the application, the income will be taxed at the level of the unincorporated partnership rather than at the level of the individual partners.”

Rental Income or Gain from Selling Property:

As long as such activities are not conducted through a license from a local licensing authority, the income generated will not be subject to corporate tax.

“Real estate investment income is exempt from corporate tax for natural persons when it is related, directly or indirectly, to the selling, leasing, sub-leasing, and renting of land or real estate property in the UAE,” states the Federal Tax Authority (FTA).

Based in the UAE – and with Income from the Gulf

The Federal Tax Authority outlines various scenarios in which an individual can generate income and how it would be subject to taxation. An illustrative example is presented, featuring a renowned physiotherapist whose primary center of activity is in the UAE, with additional interests in other Gulf countries.

Calculation of Turnover and Business Activities

“When calculating the turnover, both income derived from the UAE and from other Gulf countries (excluding wages) should be included, as they pertain to business or business activities conducted in the UAE,” emphasizes the Federal Tax Authority (FTA).

This is especially relevant in cases where the individual receives requests for treatment sessions from therapy centers in various Gulf countries due to their work in the UAE and reputation for providing high-quality services.

Earning a Wage and Running a Separate Business

Recent reforms in the UAE offer more flexibility for individuals who are employed but wish to engage in freelancing or establish a separate business while retaining their day job. In such cases, only income generated from their own business or consultancy services falls under the corporate tax bracket, and that too, only if the annual total exceeds Dh1 million. Wages earned by the individual will not be subject to taxation under any circumstance.

Tax Deduction on Salary?

Another scenario outlined in the FTA guidebook involves a sole proprietor registered with the FTA after meeting all conditions. If the individual draws an amount from the business, citing it as an annual salary cost, that sum will not qualify for tax deduction. “No deduction is allowed” as the individual and the business are considered “one and the same taxable person.”

The information provided herein is for the general information of the user and is provided in good faith. We make no representation or provide warranty of any kind, express or implied, regarding the adequacy, suitability, validity, or completeness of the information. Our advice in regard to UAE corporate tax and value added tax is based on our understanding of the relevant laws and the regulations issued. We cannot be held responsible for new regulations and/or interpretation of existing regulations by the FTA that is not consistent with our advice. Under no circumstance shall we have any liability to any user of this information or to third parties for any loss or damage of any kind incurred as a result of the use or reliance of this information.

corporate tax uae service
Wednesday, 29 November 2023 / Published in Tax

UAE Corporate Tax: Will Payments Received Outside Of Employment Contracts Come Under Tax?

Professionals with businesses must do more than state that their annual income is below Dh1m.

While salaries and personal investment income remain exempt from UAE corporate tax, individuals managing multiple businesses should check out their ’employment contracts’.

corporate tax uae service

Entrepreneurs engaged in business activities and generating an annual turnover surpassing Dh1 million must adhere to relevant regulations. The recent tax guide elucidates the notion of wages, encompassing compensation provided to an employee for their services outlined in the labor contract, whether in cash or in kind. This encompasses allowances, bonuses, and any additional benefits.

The significance of employment contracts is evident.

Any payment made to an individual outside the confines of the employment contract appears to bear the risk of not being recognized as part of the entitled wage. The determination of salary in such situations is contingent on a case-by-case assessment.

For business owners contemplating drawing salaries from several companies, the viability of an individual operating under multiple employment contracts still lacks clarity. According to the recent FTA tax guide, director fees will not be categorized as a business or business activity, and consequently, will not be subject to corporate tax.

Personal Investment Activity:

Personal investment income excludes activities that could be classified as a business according to the Commercial Transactions Law. Among the various activities listed as commercial businesses, special attention is needed for:

  • Speculative activities undertaken by individuals, regardless of their trader status, with the aim of realizing a profit.
  • Activities related to virtual assets.

Trading in shares and securities by individuals, if deemed speculative, might necessitate compliance with corporate tax regulations. The resulting profits or losses from such activities are irrelevant. For instance, a fund corpus of Dh10,000 utilized 100 times in a trading cycle during a calendar year could easily surpass the tax registration threshold of Dh1 million in annual revenue.

Transactions involving virtual currencies, non-fungible tokens, and carbon credits require a thorough assessment of their tax implications. It is essential to scrutinize whether virtual assets encompass services related to them, such as those provided by exchange houses.

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Place of Business OR Business Activity

Income derived from business or business activities carried out in the UAE is now subject to the new tax. Additionally, income from short-term activities may be taxable if they are considered transactions or activities conducted in the course of business.

Determining the location where the business or business activity occurs can pose challenges. Factors such as the individual’s usual residence, the source of income, or the actual place of commercial activity are not decisive. The person conducting the business may be residing in the UAE or elsewhere, and the income may be earned from both UAE and overseas customers.

Professionals like physiotherapists, singers, actors, musicians, influencers, or sportsmen may receive requests to travel and provide services in other countries. If these requests are a result of the individual’s work in the UAE, the income earned from activities performed elsewhere could still be linked to activities conducted in the UAE.

If you don’t own a company or if you’re a professional like a doctor or lawyer, you may not have paid much attention to UAE corporate tax. However, it’s crucial to change that perspective. It is imperative to assess both the magnitude and nature of your income to determine the corporate tax implications for you as an individual.

The information provided herein is for the general information of the user and is provided in good faith. We make no representation or provide warranty of any kind, express or implied, regarding the adequacy, suitability, validity, or completeness of the information. Our advice in regard to UAE corporate tax and value added tax is based on our understanding of the relevant laws and the regulations issued. We cannot be held responsible for new regulations and/or interpretation of existing regulations by the FTA that is not consistent with our advice. Under no circumstance shall we have any liability to any user of this information or to third parties for any loss or damage of any kind incurred as a result of the use or reliance of this information.

What is Corporate Tax for Business in UAE
Monday, 27 November 2023 / Published in Tax

What is Corporate Tax for Business in UAE: Step by Step guide

UAE recently passed a federal decree-law setting the corporation tax rate at 9 percent for businesses with taxable income over AED370,000. The new law took effect for fiscal years beginning on June 1, 2023, as announced in December 2022. The “Corporate Tax Law” is Federal Decree-Law No. 47 of 2022 on Taxation of Corporations and Businesses. Beginning with their first fiscal year that begins on or after 1 June 2023, businesses will be liable to UAE Corporate Tax (“Corporate Tax”).

What is Corporate Tax for Business in UAE

For financial years beginning on or after 1 June 2023, the Corporate Tax Law serves as the legal foundation for the adoption and execution of a Federal Corporate Tax (“Corporate Tax”) in the UAE.

The implementation of Corporate Tax UAE is meant to hasten the UAE’s development and transition while also assisting it in achieving its strategic goals. The UAE will solidify its position as a top jurisdiction for business and investment thanks to the certainty of a competitive corporate tax structure that complies with international standards and its wide network of double tax treaties. 

The UAE Corporate Tax regime draws from best practices globally and incorporates concepts that are widely recognized and accepted due to the UAE’s status as a hub for global commerce and finance. This guarantees that the UAE Corporate Tax regime will be transparent in its ramifications and easy to understand.

What is Corporate Tax?

The net income of corporations and other businesses is subject to corporate tax, a type of direct tax. In certain other jurisdictions, the term “corporate tax” is also used to refer to “corporate income tax” or “business profits tax.” 

Who is subject to Corporate Tax?

According to a Cabinet Decision to be issued in due course, natural persons (individuals) who conduct a Business or Business Activity in the UAE, UAE companies and other juridical persons that are incorporated or effectively managed and controlled in the UAE, and non-resident juridical persons (foreign legal entities) that have a Permanent Establishment in the UAE are all considered “Taxable Persons” for the purposes of the Corporate Tax.

Legal entities established in a UAE Free Zone are also considered “Taxable Persons” for purposes of corporate tax and are therefore subject to the regulations outlined in the corporate tax law. However, a Qualifying Free Zone Person who satisfies the requirements can gain advantages. Withholding Tax (at a rate of 0%) may apply to non-residents who do not have a permanent establishment in the UAE or who receive income from the UAE that is unrelated to their permanent establishment.

A type of corporate tax known as withholding tax is taken out at the source by the payer on behalf of the income recipient. The payment of dividends, interest, royalties, and other types of income across international borders is frequently subject to withholding taxes, which are present in many tax systems.

Who is exempt from Corporate Tax?

Given their significance and contribution to the social fabric and economy of the UAE, several types of companies or organizations are exempt from corporate tax.

These are referred to as Exempt Persons and consist of: Government Entities, Government Controlled Entities that are listed in a Cabinet Decision, Extractive Businesses, and Non-Extractive Natural Resource Businesses may all be exempt from being subject to Corporate Tax in addition to being exempt from any registration, filing, and other compliance requirements imposed by the Corporate Tax Law, unless they engage in activities that are subject to the charge of Corporate Tax.

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How is a Taxable Person subject to Corporate Tax?

The Corporate Tax Law levies income on a residency and source basis, similar to the tax systems in most other nations. The classification of the Taxable Person determines the applicable basis of taxation. Income from both domestic and international sources is taxed on a “Resident Person” basis (i.e. based on residence).

Only income obtained from sources located within the United Arab Emirates will be taxed on a “Non-Resident Person” basis.  For corporate tax purposes, residence is defined by a number of particular elements that are outlined in the Corporate Tax Law rather than by a person’s place of residence or domicile. 

A person will not be a taxable person and thus not be liable for corporate tax if they do not meet the requirements to be either a resident or a non-resident.

Resident Persons, Non-Resident Persons, and Permanent Establishment

Who is resident

For the purposes of corporate tax, all businesses and other juridical entities that are incorporated, otherwise created, or recognized under UAE law are immediately regarded as resident people. This includes legal entities established in the UAE in accordance with applicable Free Zone laws or mainland legislation, as well as legal entities established under a particular statute (such as a special decree). 

When efficiently managed and controlled in the UAE, foreign corporations and other juridical entities may also be recognized as resident people for corporate tax reasons. 

This will be decided based on the particulars of the firm and its operations, with the location of key management and business decisions being a deciding factor. Only insofar as such income is earned from a Business or Business Activity performed by the natural person in the UAE would it be subject to Corporate Tax as a “Resident Person” on revenue from both domestic and foreign sources. A natural person’s other income would not fall under the purview of corporate tax.

Who is a Non-Resident Person?

Non-resident persons are legal individuals who are neither residents nor have a permanent establishment in the UAE, nor do they get income from the state. On Taxable Income attributable to their Permanent Establishment (as is described in Section 8), Non-Resident Persons shall be subject to Corporate Tax. Certain non-residents’ income from the UAE that is not traceable to a permanent establishment there will be subject to 0% withholding tax.

What is a Permanent Establishment? 

A crucial premise of international tax law that is applied in corporation tax systems all over the world is the idea of a permanent establishment. In order to evaluate whether and when a foreign person has established sufficient presence in the UAE to justify the business earnings of that foreign person being subject to Corporate Tax, the Permanent Establishment concept is central to the UAE Corporate Tax Law.

The OECD Model Tax Convention on Income and Capital’s Article 5 definition, as well as the UAE’s stance under the Multilateral Instrument to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting, served as the foundation for the definition of Permanent Establishment in the Corporate Tax Law. 

This enables international individuals to determine whether they have a Permanent Establishment in the UAE or not by using the pertinent Commentary of Article 5 of the OECD Model Tax Convention. The terms of any bilateral tax agreements between the UAE and the nation where the non-resident person resides should be taken into account in this assessment.  

Corporate Tax consultant in uae

Taxable Income and Tax calculation

What is Corporate Tax imposed on?

A taxable person must pay corporate tax on any taxable income they receive during a tax period.  Corporate Tax would typically be levied once a year, with the Taxable Person determining their own burden through self-assessment.

This indicates that the Taxable Person files a Corporate Tax Return with the Federal Tax Authority in order to calculate and pay the Corporate tax UAE. The accounting income (i.e., net profit or loss before tax) of the Taxable Person as reported in their financial accounts serves as the basis for computing Taxable Income.

To determine their Taxable Income for the applicable Tax Period, the Taxable Person will then need to make a few modifications. For instance, it could be necessary to make adjustments to accounting income for revenue that is exempt from corporate tax and for expenses that are entirely or partially non-deductible for corporate tax reasons. 

What income is exempt?

Additionally, the Corporate Tax Law exempts some forms of revenue from the Corporate Tax. As a result, a Taxable Person will not be charged Corporate Tax on such revenue and cannot deduct any expenses that are connected to it.

Taxable individuals who receive exempt income continue to be liable for paying corporate tax on their taxable income. The fundamental goal of exempting some income from corporate tax is to avoid taxing some forms of income twice.

Particularly, corporate tax will typically not be applied to dividends and capital gains derived from local and overseas shareholdings. In addition, for the purposes of UAE Corporate Tax, a Resident Person may choose, under certain circumstances, to exclude income from a foreign Permanent Establishment.

What expenses are deductible?

The timing of the deduction may vary depending on the type of expense and the chosen accounting system, but in general, any legitimate business expenses made entirely and exclusively for the purpose of generating Taxable Income will be deductible.

For capital assets, expenses are typically recorded through depreciation or amortization deductions throughout the course of the asset’s or benefit’s economic life.  

Dual-purpose expenses, such as those incurred for both personal and company needs, must be allocated, with the appropriate portion being recognized as deductible if it was incurred completely and solely for the taxable person’s business. For corporate tax purposes, some expenses that are deductible under normal accounting principles might not be entirely deductible. 

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What is the Corporate Tax rate?

If your taxable income is more than AED 375,000, corporate tax will be charged at a headline rate of 9%. A 0% corporate tax rate will apply to Taxable Income below this cap.

What is the Withholding Tax rate?

Some types of income from the UAE paid to non-residents may be subject to a 0% withholding tax. Due to the 0% rate, in effect, neither UAE enterprises nor international beneficiaries of income from the UAE would be required to register or file any withholding tax-related documents.  Transactions between UAE residents are exempt from withholding tax. 

When can a Free Zone Person be a Qualifying Free Zone Person?

For “Qualifying Income” only, a Free Zone Person who qualifies for the benefit may receive a special Corporate Tax UAE rate of 0%. The following requirements must be met by a free zone person in order to qualify as one: maintain sufficient substance in the UAE; obtain ‘Qualifying Income’; not have made an election to be subject to Corporate Tax at the regular rates; and comply with the transfer pricing rules under the Corporate Tax Law.

A Qualifying Free Zone Person may be required to comply with extra requirements set forth by the Minister. The standard rates will apply if a Qualifying Free Zone Person fails to comply with any of the requirements or elects to be subject to the regular Corporate Tax regime.

What are Tax Groups, and when can they be formed?

If two or more Taxable Persons meet the requirements (see below), they may apply to form a “Tax Group” and receive the same treatment as one Taxable Person for the purposes of Corporate Tax. 

The main firm and all of its subsidiaries must be resident juridical entities, share the same financial year, and compile their financial statements in accordance with the same accounting rules in order to constitute a Tax Group. 

In order to create a Tax Group, the parent firm must additionally: possess at least 95% of the subsidiary’s share capital, at least 95% of the voting rights within the subsidiary, and at least 95% of the profits and net assets of the subsidiary. Ownership, entitlement, and rights may be held directly or indirectly through subsidiaries, but a tax must be paid.

How to Calculate the Taxable Income of a Tax Group?

The parent firm must prepare consolidated financial accounts for each subsidiary that is a member of the Tax Group for the applicable Tax Period in order to determine the Taxable Income of a Tax Group. For the purpose of figuring out the Taxable Income of the Tax Group, transactions between each group member and the parent firm as well as between the group members would be deleted.  

Registering, filing, and paying Corporate Tax

It will be necessary for all Taxable Persons to register for Corporate Tax and get a Corporate Tax Registration Number, including Free Zone Persons. Some Exempt Persons may also be asked by the Federal Tax Authority to register for Corporate Tax.

For each Tax Period, Taxable Persons must submit a Corporate Tax return within nine months after the conclusion of the applicable period. The payment of any Corporate Tax owed in relation to the Tax Period for which a return is submitted would typically have to be made by the same deadline. The registration, filing, and payment dates applicable to Taxable Persons with a Tax Period (Financial Year) ending on May 31 or December 31 (respectively) are illustrated here. 

How to Prepare for Corporate Tax?

Read the Corporate Tax UAE Law and the supplementary materials on the websites of the Federal Tax Authority and the Ministry of Finance. Determine if your company will be liable to corporate tax and, if so, from what date, using the information at your disposal.

Recognize the requirements for your company under the Corporate Tax Law, such as:

a. Whether and when your company needs to register for Corporate Tax;

b. What is the accounting or tax period for your company;

c. When your company would need to file a Corporate Tax return;

d. What elections or applications your company may or should make for Corporate Tax purposes; and

e. What financial data and records your company will need to keep for Corporate Tax purposes. 

What is Business activity

According to the definitions of “Business” and “Business Activity” in the Corporate Tax Law, it is determined whether a person is a taxable person when their actions result in a UAE CT obligation. Any ongoing or transient economic activity is referred to as a “business” and can be carried out by anyone. It is implied that a business is operated with the goal of making a profit and that the activity is organized and follows some sort of system.

A business or commercial activity, however, does not lose its identity for UAE CT purposes just because it is not profitable. A person is deemed to be a taxable person if their actions result in a UAE CT obligation in accordance with the definitions of “Business” and “Business Activity” in the Corporate Tax Law.

A “business” is any continuing or sporadic economic activity that is conducted by any individual. It is implied that a business is run with the intention of turning a profit and that the operation is planned out and adheres to a set of rules. However, just because a firm or commercial activity isn’t lucrative doesn’t mean it loses its identity for UAE CT purposes. 

Are international companies’ UAE branches subject to UAE CT?

The UAE CT payable on the income of the foreign branch or permanent establishment may be reduced by the corporate tax (or similar tax) paid on the pertinent income in the foreign jurisdiction in cases where no election is made or the foreign branch or permanent establishment’s income is not eligible for an exemption from CT. 

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The information provided herein is for the general information of the user and is provided in good faith. We make no representation or provide warranty of any kind, express or implied, regarding the adequacy, suitability, validity, or completeness of the information. Our advice in regard to UAE corporate tax and value added tax is based on our understanding of the relevant laws and the regulations issued. We cannot be held responsible for new regulations and/or interpretation of existing regulations by the FTA that is not consistent with our advice. Under no circumstance shall we have any liability to any user of this information or to third parties for any loss or damage of any kind incurred as a result of the use or reliance of this information.

UAE Corporate Tax traders in free zones
Thursday, 23 November 2023 / Published in Tax

UAE Corporate Tax: Significant Relief Granted To Commodity Traders Operating in Free Zones

Commodity enterprises in free zones will find considerable satisfaction in the latest corporate tax revisions. The focus has shifted back to the taxation framework in UAE-free zones. A recent cabinet decision, accompanied by a corresponding ministerial decision that revokes previous rulings, has been retroactively implemented from June 1, 2023. These decisions bring forth new concepts and provide clarity on relevant issues. As is typical in taxation matters, some intriguing discussion points have surfaced.

UAE Corporate Tax traders in free zones

Qualifying Commodities Trading

The trading of Qualifying Commodities has brought significant relief to commodity traders based in free zones not classified as ‘designated zones.’ Income generated from the trading of ‘qualifying commodities’ with individuals or entities outside the free zone, whether domestic or international, is now eligible for a 0 percent tax rate.

Qualifying commodities refer to metals, minerals, energy, and agricultural commodities traded in their raw form on a recognized commodities exchange market, either within the UAE or internationally. This applies to the physical trading of these commodities and associated derivative trading used for hedging against risks inherent in such activities.

Qualifying Intellectual Property

Qualifying intellectual property, which encompasses income from the ownership or exploitation of all intellectual property assets, was initially explicitly excluded from the 0 percent tax rate. However, with the revised decisions, a specific portion of the income derived from the ownership of ‘Qualifying Intellectual Property’ is now eligible for the 0 percent rate.

Qualifying IP includes patents and copyrighted software, along with any other rights that are functionally equivalent to a patent (e.g., utility models, IPR for plants and genetic material, orphan drug designations, and extensions of patent protections). It’s important to note that intellectual property rights related to marketing, such as trademarks, are not eligible for this rate.

Clarity on Sufficient Substance

Ensuring ‘adequate substance’ is a crucial compliance requirement for claiming the 0 percent tax rate. This entails engaging in core income-generating activities (CIGA), maintaining sufficient assets, having a specific number of employees, and incurring operational expenses.

Core income-generating activities primarily involve functions that contribute to the business’s value and are not predominantly support activities. It necessitates having an appropriate number of qualified full-time employees. The required substance should be upheld in the respective free zone or designated zone where the qualifying activity is mandated. Even third parties to whom core income-generating activities may be outsourced must meet this location condition.

Points for Consideration:

Detailed clarification has been provided on income from headquarter services to related parties, which is now eligible for a 0 percent tax rate. ‘Headquarter services’ encompass the administration, oversight, and management of business activities for related parties. This includes providing senior and general management, captive insurance services, administrative services, procurement services, business planning and development, risk management, coordination of group activities, and incurring expenditures on behalf of related parties, along with offering other support services.

Caution is advised in handling ‘headquarter services.’ Beyond anti-abuse rules, a lingering question pertains to whether a mainland company, typically ineligible for the 0 percent rate and/or engaged in operating mainland retail stores, could potentially restructure its management activities, including owners’ salaries, by establishing a separate free zone company.

The detailed clarification of the distribution of goods or materials within or from a designated zone has effectively addressed concerns raised by taxpayers. Numerous intriguing scenarios, such as the distribution of non-resale equipment, verification of overseas customers as resellers, trading in non-qualifying commodities, and sales involving third-port shipments, still require careful evaluation.

With enhanced clarity on free zone tax incentives, it is imperative for business owners to pose the appropriate questions to optimize the tax impact and meet compliance requirements.

The information provided herein is for the general information of the user and is provided in good faith. We make no representation or provide warranty of any kind, express or implied, regarding the adequacy, suitability, validity, or completeness of the information. Our advice in regard to UAE corporate tax and value added tax is based on our understanding of the relevant laws and the regulations issued. We cannot be held responsible for new regulations and/or interpretation of existing regulations by the FTA that is not consistent with our advice. Under no circumstance shall we have any liability to any user of this information or to third parties for any loss or damage of any kind incurred as a result of the use or reliance of this information.

New Tax Rules for Non Residents
Monday, 13 November 2023 / Published in Tax

Breaking News: UAE announces New Tax Rules for Non Residents

The UAE’s Federal Tax Authority (FTA) has offered clarification on the standards used to identify non-residents who are subject to corporate tax.

New Tax Rules for Non Residents

The UAE’s Federal Tax Authority (FTA) has revealed a fresh set of guidelines outlining the parameters for identifying non-residents liable to corporate tax within the nation.

This announcement is a component of the corporate tax legislation that became operational on June 1, 2023.

In an official statement, the FTA encourages all individuals not residing in the country but earning income in the UAE to refer to the recently released guidelines and the applicable legal framework on the FTA’s official website.

For non-resident individuals, the FTA’s guide outlines specific conditions under which they may be subject to corporate tax.

For natural persons, two scenarios are applicable. The first is if an individual has a Permanent Establishment in the UAE with a turnover exceeding AED 1,000,000 in a calendar year. The second is if they earn State-Sourced Income from the Emirates.

Regarding non-resident juridical persons (corporations), they must fulfill certain criteria to fall under the scope of Corporate Tax. This includes having a Permanent Establishment in the UAE, deriving State-Sourced Income, or having a nexus in the UAE, such as earning income from Immovable Property in the country.

The guide emphasizes the necessity for non-resident juridical persons to register for Corporate Tax and obtain a Tax Registration Number (TRN) when meeting the relevant criteria. This is crucial to prevent compliance delays and potential administrative penalties.

Furthermore, the FTA clarified that Corporate Tax registration is not obligatory for non-resident juridical persons solely earning State-Sourced Income without a Permanent Establishment or nexus in the Emirates.

Additionally, the guide specifies that a non-resident natural person must register for Corporate Tax and obtain a TRN if their turnover attributable to their Permanent Establishment in the UAE exceeds AED 1,000,000 within a calendar year.

The information provided herein is for the general information of the user and is provided in good faith. We make no representation or provide warranty of any kind, express or implied, regarding the adequacy, suitability, validity, or completeness of the information. Our advice in regard to UAE corporate tax and value added tax is based on our understanding of the relevant laws and the regulations issued. We cannot be held responsible for new regulations and/or interpretation of existing regulations by the FTA that is not consistent with our advice. Under no circumstance shall we have any liability to any user of this information or to third parties for any loss or damage of any kind incurred as a result of the use or reliance of this information.

tax agent in uae
Sunday, 31 January 2021 / Published in Tax
tax agent in uae

Tax Agent in UAE: Leading Tax Advisory Services Dubai

Do you have a business in the UAE and are unsure whether you need to hire a registered tax agent to assist you in compliance under VAT? Read the article to learn about the responsibilities of a tax agent in the UAE registered with the Federal Tax Authority (FTA).

What Is Tax Agent in UAE?

A tax agent in UAE is a person registered with the tax authorities who represents their clients in front of the tax authorities when they authorize a tax agent to do so. A tax agent takes care of the client’s tax obligations and performs various legal activities prescribed by the Law. A tax agent can help you smooth the VAT process and may act as a mediator between you and the Federal Tax Authority.

What Are the Roles and Responsibilities of a Tax Agent?

Tax agents in the UAE are responsible for assisting their clients in fulfilling their tax-related obligations and helping them to satisfy the provisions of the VAT Law.

So what can they do for you?

  • They help achieve tax compliance, carry out legal activities, manage financial records related to tax transactions, and prepare and file a VAT return.
  • Tax agents can provide proper advice and interpretation of the UAE VAT Law.
  • They can play a key role during the tax audit conducted by the FTA.
  • Tax agents in the UAE can provide all information, documents, records, and data regarding the Taxable Person they represent if the FTA requests it.
  • Tax agents can inquire about tax-related matters with the FTA and submit requests for reconsideration of decisions issued by the FTA.
  • They can also help their clients better plan their taxes and differentiate between the Dos and Don’ts.

Tax agents must maintain the confidentiality of any information obtained in the course of performing their duties. They should refuse to participate in any activity or work, which may result in a breach of any law established by the authority.

Should You Hire a Tax Agent in Dubai?

Paying taxes is compulsory for any business in the UAE, as this revenue is used for the development of the country. Any taxable person in the UAE has the right to appoint a registered tax agent to handle their tax affairs with the authority. But the responsibility of the taxable person in relation to the authority will remain even after appointing a tax agent.

Generally, you may need to hire a tax agent in situations when there is a tax dispute or tax appeal with complexity. But for day to day tax compliance, tax agent services are not necessarily required. In fact, any taxpayer can directly interact with the tax authorities even for tax disputes and appeals without the need for a tax agent.

Still, you may find it challenging to manage tax obligations for your business in the UAE.

Need assistance to ensure your business is compliant with its tax obligations??

Contact us to schedule a free consultation and learn how we can help you manage your company’s taxes.

How to Become a Registered Tax Agent

A person who is registered with the FTA, as well as obtained a license from the UAE Ministry of Economy or from any other relevant authority, can practice as a tax agent in the UAE. A person who wants to register as a tax agent in the UAE has to fulfill the following conditions according to the Law.

  • They must be of good conduct and behaviour and, in addition to this, they should not have been involved in any criminal or illegal activity.
  • They should be qualified to perform the functions and duties of the profession as specified in the Executive Regulations. That means a person should hold a certified bachelor or master’s degree in tax, accounting, or Law from a recognised educational institution. If the applicant holds a bachelor’s degree in any other field, they should submit a tax certification from an internationally recognised tax institute.
  • They should hold a certificate providing evidence of recent relevant experience of at least three years in tax, accounting, or Law.
  • A person must provide a certificate that proves their verbal and written communication skills in both Arabic and English.
  • They are required to pass the FTA’s Tax Agent exam.
  • They must be physically and medically fit to perform the duties required by profession.
  • A tax agent working in the UAE must also hold professional indemnity insurance.

Any person who wants to be a tax agent and has met those requirements can submit an application and apply for registration. The FTA has the right to request more documents that they consider necessary that can help them to decide whether they should approve or reject the application. The FTA is expected to provide a decision within or after 15 working days from the date when the application is submitted.

Let Beaufort Associates Handle Your Taxation Duties

Beaufort Associates provides management consulting, business advisory, and VAT consultancy services for businesses in different industries in Dubai and the GCC region. We can also help you to establish an effective accounting system and processes.

We have an excellent reputation for delivering world-class services to the business community. With more than 20 years of experience, we can ensure you’ll always get the best guidance in any aspect of managing your business.

Our tax consultants know the intricacies of the UAE tax laws and regulations and can help you navigate an increasingly complex tax environment. They can provide you with professional advice to address your tax-related issues and guide you for better VAT compliance step-by-step.

Our experts will help you manage your taxes using the best strategic tools most cost-effectively. They will help you with up-to-date information regarding any taxation policy changes and ensure that your company meets all regulatory requirements. If you need additional information about our services, contact us today!

Looking For Top Notch TAX Consultancy Service in Dubai ?

Tax Agent Services

Beaufort Associates is a certified Tax Agent in the UAE. Our team of Tax Experts has successfully managed numerous situations and offered the most appropriate solutions to companies, ensuring that businesses can consistently operate smoothly and efficiently.

Beaufort tax agents can also assist you in comprehending the new Corporate Tax Law, gaining insights into UAE Corporate Tax, and determining the optimal approach for implementing corporate tax in your business.

Beaufort is an FTA Approved Tax Agency in Dubai, and as a registered Tax Agent in the UAE, we guarantee VAT compliance to support all types of businesses.

Advantages of Hiring a Tax Agent in UAE

A tax agent can manage all of a company’s tax-related matters, allowing business owners and key management personnel to concentrate on other crucial responsibilities.

The following are the key advantages of hiring a tax agent in the UAE:

1. Assists in Tax Preparations, Assessments & Representations: A tax agent aids in preparing tax documents, conducting assessments, and representing the company in tax matters.

2. Helps You Save Money and Time: By handling tax affairs efficiently, a tax agent can help save both money and time for the business.

3. Assists in Tax Registration, Implementation, and Compliance: Tax agents provide guidance on tax registration, assist in implementing tax strategies, and ensure compliance with tax regulations.

4. Assists You in Filing Your Returns Timely & Accurately: Tax agents help businesses file their tax returns promptly and with precision, minimizing the risk of errors and penalties.

5. Acts as a Long-Term Advisor: A tax agent can serve as a long-term advisor, offering insights and strategies to optimize the company’s tax position over time.

Tax Agent Services in UAE

It is strongly advisable for companies and individuals subject to taxation to engage the services of a tax agent.

Companies may not always have the focus or time to address their tax obligations, making it highly beneficial to appoint a tax agent to handle tax matters on their behalf.

Our highly experienced and professional tax consultants played a crucial role in the successful implementation of VAT in the UAE.

They have provided invaluable support to the business community in understanding the laws and regulations surrounding taxation.

Beaufort Associates boasts qualified tax consultants in the UAE who possess in-depth knowledge of UAE tax laws and regulations specific to the region.

As one of the leading tax agents in Dubai, we offer the best and top-notch tax agent services in the UAE.

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The information provided herein is for the general information of the user and is provided in good faith. We make no representation or provide warranty of any kind, express or implied, regarding the adequacy, suitability, validity, or completeness of the information. Our advice in regard to UAE corporate tax and value added tax is based on our understanding of the relevant laws and the regulations issued. We cannot be held responsible for new regulations and/or interpretation of existing regulations by the FTA that is not consistent with our advice. Under no circumstance shall we have any liability to any user of this information or to third parties for any loss or damage of any kind incurred as a result of the use or reliance of this information.

financial advisor
Sunday, 08 November 2020 / Published in Tax
financial advisor

Financial Advisors: What Value Can They Bring to Your Business?

Many business owners avoid hiring a financial advisor thinking it will add unnecessary costs, but they are wrong. Business owners often need a financial advisor to get expert advice. An objective and experienced advisor is your essential partner that can help you create comprehensive and practical financial plans that address the present and the future and then assist in their implementation.

They can also help you to avoid costly mistakes and maximize your business returns. Working with a professional business advisor can save you time and money and give you the freedom and confidence to focus on other aspects of your business.  

What Does a Financial Advisor Do?

A financial advisor is usually seen as someone who provides financial advice or guidance for clients around money matters, personal finances, and investments.  They can help people manage their money and reach their financial goals by providing their clients with strategies and ways to create more wealth by offering such services as investment management, financial planning, or wealth management to high net worth individuals.

In a corporate setting, financial advisors can assist companies in realising their objectives and goals. In this capacity, the financial advisor supports a company in a variety of roles. Such roles include working as trusted business advisors, helping identify issues and possible control weaknesses, providing advice on specific issues, and general advice.  

Business Financial Advisors

A business financial advisor can help you make the most of your initial capital investment into your business. For example, they can help you assess your business model’s viability, identify blind spots, and outline effective strategies and realistic timelines for your path to profitability.

Financial advisors also prepare businesses for future developments and different stages of business growth. They can look at the situation from a third-party perspective and tell you realistically whether you can achieve your business goals on schedule.

They can also help you to succeed in a crowded marketplace by discovering untapped niches and future developments. Financial advisors can help you to face challenges and suggest opportunities for business growth that you may not be aware of.

Financial Consultant Vs. Financial Advisor: What Is the Difference?

The terms financial advisor and financial consultants are often used interchangeably. But in fact, advising and consulting are separate types of outsourced financial services.

You can hire a consultant to address a specific problem at a particular time. They will review the situation and identify underlying problems after assessing all relevant factors. Then they will provide advice to address the issues and assist in making a decision that can help to improve the situation.

In this capacity, the Financial Advisor provides general management support and may be called upon to advise the company on an ongoing basis in various areas, from accounting and controls to marketing and sales to procurement, HR, etc.

Where the advisor feels that the problem requires a specialist in a particular discipline, they may suggest that a company hire a consultant to solve those specific issues.

What Are Types of Financial Advisors?

Different types of financial advisors offer a diverse range of services. All of them are uniquely qualified to help you reach different financial goals and manage your money differently.

  • Investment advisors provide investment advice to their clients. You can also hire them to manage your assets directly.
  • A financial coach (also known as a financial counsellor) will act similarly to a financial consultant, but they are mostly considered beginner-friendly financial advisors. They motivate clients towards their goals and help them to build their wealth.
  • Financial planners can help you reach specific goals in their studied areas of expertise. They are best suited for long-term projects.
  • Business financial advisors provide business owners with information and ideas about how they can run their businesses more effectively. Business advisors help businesses to grow and succeed through careful planning and strategy and provide guidance for significant business decisions.

Who Should Hire a Business Financial Advisor?

A business financial advisor can be useful for any business owner. Everyone needs the best advice when making decisions about their finances. Hiring a business financial advisor can be especially helpful for small business owners who are young and lack experience.

You should also consult a professional when considering some significant changes, such as acquiring a new business or passing ownership to someone else in your company.

How to Find the Right Business Financial Advisor

You should not hire the first advisor you come across. This decision is vital for your business, so you should research to find a service specializing in business finances.

An important aspect to consider is the relationship. You should find someone you are comfortable with to discuss your finances openly. Other aspects to consider are:

  • Expertise in a specific industry;
  • Cost of services;
  • Convenient location;
  • Specific product offering.

Every business is unique and has different priorities, so make sure your advisor can help where you need it. It’s important to find an advisor who is a good fit for you. Then you will have peace of mind knowing you are working with someone who has your best interest at heart.

Do you need financial advising?

We are ready to help! Reach out to our team for free initial consultation.

Why Outsource Financial Advisory Services to Beaufort Associates

Beaufort Associates has many years of experience and specializes in providing management consulting and business advisory services for different businesses in Dubai and the GCC region.

We are dedicated to providing our clients with the most reliable services to help them achieve their goals and take their business to the next level. When working with business owners, we use a comprehensive approach and look at their entire financial picture.

When you’re looking for advice or guidance, no matter what size your business is, we have a team of professionals ready to work with you to realize your business’s full potential. You can count on our financial advisors to help you to make the right decisions at the right time.

We take the time to get to know your business and understand your limitations and aspirations. As a result, we can provide you with bespoke options when looking for accounting services, assisting with creating a business plan, VAT registration, or financial outsourcing options.

Our experienced financial advisors have extensive knowledge about business regulations pertaining to investment and finance. They can provide you with premium advisory services on all kinds of financial and corporate matters. Contact us today for a no-obligation meeting. Let’s talk!

The information provided herein is for the general information of the user and is provided in good faith. We make no representation or provide warranty of any kind, express or implied, regarding the adequacy, suitability, validity, or completeness of the information. Our advice in regard to UAE corporate tax and value added tax is based on our understanding of the relevant laws and the regulations issued. We cannot be held responsible for new regulations and/or interpretation of existing regulations by the FTA that is not consistent with our advice. Under no circumstance shall we have any liability to any user of this information or to third parties for any loss or damage of any kind incurred as a result of the use or reliance of this information.