Direct Tax
Corporate Tax
Corporate Tax is a form of direct tax levied on the net income or profit of corporations and other entities from their business.
The UAE Ministry of Finance announced on 31.01.2022, the introduction of UAE corporate tax for businesses from the beginning of their first financial year that starts on or after 1 June 2023.
Corporate Tax will apply to all businesses and individuals having business activities under a commercial license in UAE. Exemptions were also provided to businesses engaged in the extraction of natural resources as they will be subjected to Emirate level corporate taxation. Dividends and Capital Gains earned by a business from its qualifying shareholdings will be exempt from Corporate tax etc.
Generally, such taxes are computed on the accounting net profit/income of a business, after making adjustments for certain items which will be specified under the UAE Corporate Tax Law.
Corporate Tax Rate in UAE will be applicable at the following rates :
UAE Ministry has announced that Corporate Tax shall be levied on taxable income/profit at the following rate:
| Income/Profit as per Financials | - Tax rate |
|---|---|
| - 0% | |
| - 9% |
Read FAQs about the UAE's corporate tax on the website of the Federal Tax Authority - https://tax.gov.ae/en/faq.aspx
International Tax
Due to globalisation, cross-border transactions have multi-folded during the last 3 decades. Now if a transaction is governed by the Tax laws of two different countries, adhering to varied tax lawsof different jurisdictions appropriately can be called International Taxation.
It includes application of the tax laws of various countries involved in the transaction and determining the tax obligations of the entity in those jurisdictions.
International Tax Planning has very much prominence when it comes to cross-border transactions as different countries have varied rules and tax regulations.
VAT
Value Added Tax or VAT is an indirect tax. It is a tax on the consumption or use of goods and services. Businesses collect and account for the tax on behalf of the government.
VAT was introduced in the UAE on 1st January 2018. The rate of VAT is 5 per cent.
Who needs to register for VAT?
Businesses with taxable supplies and imports exceeding AED 375,000 per annum are mandatorily required to register under VAT.
For those businesses, whose supplies and imports exceeds AED 187,500 per annum, it is optional.
A business entity pays the government, the tax that it collects from its customers. At the same time, it receives a refund from the government on tax that it has paid to its suppliers.
We can help you with the following aspects:
UAE has introduced Excise tax in 2017. It is also a form of indirect tax levied on specific goods which are harmful to human health or the environment. These goods are referred to as "excise goods".
This is levied to reduce consumption of unhealthy and harmful commodities by the public. In turn, it can be said that consumers will need to pay more for goods that are harmful to human health or the environment.
Who needs to register for Excise Tax?
Any business which is engaged in
has the responsibility to get registered for excise tax.
Rates of Excise Tax on Excise Goods is as follows:
| Excise Good | Excise Tax | |
|---|---|---|
| 50% | ||
| 100% | ||
| 100% | ||
| 100% | ||
| 100% | ||
| 50% |