When you find it hard to understand tax, we understand both of you!
Tax management is one of the most challenging responsibilities for any organization, requiring intricate detailing and effective structuring. However, maintaining a proper tax history not only prevents financial loss and reduces liability but also enhances the goodwill of your organization. Upyugo Global’s tax service suite offers a comprehensive approach to managing your organization’s overall tax structure.
Overview
The United Arab Emirates, home to the significant corporate gateway of Dubai, will soon have one of the lowest corporate tax rates in the world. This move aligns with the UAE’s commitment to international tax regulations, mirroring similar efforts by other Gulf nations. The initiative aims to reduce regulatory burdens for UAE firms while protecting small businesses and startups.
Effective Date
Corporate Tax Rates in the UAE:
- A 0% tax rate applies to taxable income up to AED 375,000.
- A 9% tax rate applies to taxable income over AED 375,000.
- Multinational corporations subject to OECD Base Erosion and Profit-Sharing (BEPS) laws under Pillar 2 of the BEPS 2.0 framework, with combined worldwide revenues in excess of AED 3.15 billion (€750 million), will be subject to varying rates.
Key Takeaways from UAE Corporate Tax Law
- The law does not apply to individual salary income, dividend income, capital gains, rental income, or other passive incomes.
- Free Zones that do not conduct business with the mainland may benefit from corporate tax incentives, depending on respective Free Zone regulations. An annual CIT return is required for all Free Zones.
- Non-residents are subject to tax on UAE-sourced income and taxable income from permanent establishments (PE) in the UAE.
- Transfer pricing, as per OECD guidelines, is applicable. Transactions with owners, directors, officers, etc., must adhere to the Arm’s Length Principle (ALP).
- A Transfer Pricing (TP) benchmarking study is mandated for every company to determine the ALP.
- Any foreign corporate tax imposed on UAE taxable income will be allowed as a tax credit against the annual tax liability.
- Domestic, cross-border payments, and specified transactions are subject to a 0% withholding tax (WHT).
Tax Structuring in Dubai
Proper tax structuring creates a regulated framework for all your tax payments and trading arrangements. It helps reduce the range of direct and indirect taxes your organization is required to pay. A well-aligned tax plan should integrate with your corporate strategy or business framework and include the identification of tax risks.
Corporate Tax Filing in Dubai
Filing accurate tax returns on time, in adherence to both national and international tax governance bodies (FTA, CSR, etc.), shields your business from penalties and legal proceedings. Any business subject to CIT must register with the FTA and obtain a Tax Registration Number within the prescribed period. Tax returns and CIT payments must be submitted within nine months from the end of the relevant tax period.
Corporate Tax Filing Services:
- Providing corporate tax registration services to all businesses.
- Preparing and assisting in the filing of corporate tax returns.
- Offering tax accounting services to streamline accounts as per CIT regulations.
Corporate Tax Impact Assessment Study
An initial assessment of the corporate tax impact on your company’s current operational structure will be conducted. This will be followed by a system impact analysis, which includes analyzing the data required for corporate tax compliance and assessing whether the existing systems adequately capture this information.
Corporate Tax Advisory Services in the UAE
- Assessing and advising on tax implications for your company.
- Evaluating corporate tax eligibility and advising on exemptions for mainland, offshore, and Free Zone businesses, if applicable.
- Analyzing the possibility of tax grouping to avail tax benefits.
- Advising on the restructuring of group companies, including foreign subsidiaries/branches.
- Advising on the possibility of foreign tax credits, withholding tax, and the deduction of expenses and interest.
At Upyugo Global, we understand the intricacies of the corporate tax landscape. Our expert team of tax advisors goes beyond simple compliance, offering a comprehensive suite of corporate tax services designed to optimize your financial health and navigate today’s complex tax environment.
Here’s How Upyugo Empowers Your Business:
- Strategic Tax Planning
- Seamless Corporate Tax Registration Services
- Flawless Corporate Tax Filing Services
- Unwavering Corporate Tax Compliance Services
But our expertise extends beyond just corporate tax compliance:
- Expert Documentation Guidance
- Rigorous Submission Scrutiny
Invest in Your Future
Choosing Upyugo’s corporate tax advisory services is more than just outsourcing compliance—it’s a strategic investment in your long-term success. We become your trusted partners, working alongside you to unlock tax efficiency, minimize risks, and optimize your financial performance. Contact us today for a free consultation and discover how our comprehensive corporate tax advisory services can propel your business toward a brighter financial future.