Impact of Corporate Tax on UAE Companies – BestaxCA
Dubai, UAE – 20th October 2023, – BestaxCA is excited to announce the introduction of its extensive Corporate Tax Services in Dubai. The new Corporate tax has been effective for accounting periods starting from 1 June 2023. For the companies whose accounting period ends in December, the Corporate Tax will be applicable in January 2024.Dubai has been making significant progress by implementing the corporate tax. The way companies in this sector operate the business and manage their finances is evolving.
Dubai, Dubai, United Arab Emirates, 20th Oct 2023 – Corporate Tax UAE:
The UAE’s new corporate tax system is intended to increase economic competitiveness while assuring accordance with international tax principles. It is evidence of the UAE’s forward-thinking outlook and commitment to upholding its status as a leading international economic hub.
Dubai has been making significant progress by implementing the corporate tax. The way companies in this sector operate the business and manage their finances is evolving.
“I’m really excited to announce the corporate tax service at BestaxCA in Dubai with my professional team of Best Tax Experts to ensure compliance and maximize tax efficiency for UAE companies,” said Haseeb Hamdani, Manager of BestaxCA.
The net income or profit businesses and other organizations make from their activity is subject to corporate tax (CT). In certain other countries, the term “corporate tax” is also used to refer to “corporate income tax (CIT)” or “business profits tax.”
The following is a summary of the primary components of the Corporate Tax Law.
The corporate tax applies to
These are the factors that Corporate Tax is applicable to:
Each and every business and entity operating in the UAE Under a commercial license.
The UAE CT policy has been recognizing the CT incentives that are offered to free-zone enterprises that follow all legal requirements and don’t have a business set up located on the country’s mainland.
Only foreign organizations and people that regularly or continuously conduct trade or commerce in the UAE are permitted.
Businesses involved in real estate management, development, construction, agency, and brokerage.
If a nonresident individual has a permanent establishment (PE) in the UAE, receives revenue from the UAE, or has a nexus in the UAE (nexus regulations are outlined in a Ministerial Decision), they may be subject to CT.
Corporate tax applicable rates in UAE
Following are the corporate tax applicable rates in the UAE:
After corporate tax registration, Taxable income up to AED 375,000, corporate tax is applicable at 0%.
Taxable income exceeding AED 375,000 is applicable at 9%.
Large multinational firms have to pay a different rate of tax if they meet specific criteria relating to “Pillar Two” of the OECD Base Erosion and Profit Shifting project.
Exemptions from corporate tax in UAE
Following are the factors on which exemptions from corporate tax are applicable.
An individual involved in the extraction of natural resources from the UAE, both extractive and non-extractive.
Governments and organizations under government authority.
Organizations that provide public benefits.
Public benefit organizations and charities.
Social Security or pension money.
Eligible investment funds.
The Corporate Tax Law introduces the term “Qualifying Free Zone Person” (QFZP) and is widely defined as a business or branch registered in a free zone that:
Keeps sufficient substance in the UAE.
Receives eligible income, which is defined by a ministerial decision.
Fulfills the rules for transfer pricing.
Meets any additional requirements set out by a Ministerial Decision.
A QFZP may gain from a 0% rate on its qualified income while still being subject to CT. A QFZP can reject this preferential system in favor of being charged the usual Corporate tax rate.
Tax Loss Relief
The following are the factors included in tax loss relief:
Losses made before CT’s start date are not eligible for compensation.
With some limitations, businesses have been able to carry over tax losses forever.
These losses may be offset by up to 75% of the taxable income of the next tax months.
BestaxCA is an innovative financial and business consulting firm based in Dubai, UAE. They also focus on providing solutions for business taxes. BestaxCA is qualified to help businesses through the complexity of corporate tax due to their experience in tax planning, compliance, and setting up businesses in Dubai. They help businesses by optimizing their tax structures, guaranteeing compliance with local laws, and improving financial efficiency. BestaxCA is renowned for its discrete yet successful solution to business tax issues.
Organization: Bestax Chartered Accountants
Contact Person: Haseeb Hamdani
Contact Number: +971561649163
Address: Office 804, Parklane Tower, Business Bay
Address 2: Dubai, UAE
Country: United Arab Emirates
Release Id: 2010237233
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