Corporate Tax Services in Dubai, UAE
The United Arab Emirates (“UAE”) announced to implement the OECD’s Two-Pillar approach to reform its International Tax Framework and to implement a minimum Corporate Tax rate starting 2023.
Corporate Tax in UAE is a form of direct tax levied on the net income or profit of corporations and other businesses. Going forward, licensees operating in UAE will be required to assess the impact of the upcoming regulations to their business and undertake the necessary compliance. At JRB, our team of experts can help you in assessing the challenges and opportunities that the introduction of a Corporate Tax will bring.
Corporate Tax Rates are indicated in the below table:
|Sr. No||Taxable Income/ Category||Corporate Tax Rate (%)|
|1||Taxable income up to AED 375,000||0%|
|2||Taxable income over and above AED 375,000||9%|
|3||Large multinationals (having consolidated global revenue exceeding EURO 750 million – equivalent to AED 3.15 billion)||Different tax rate|
Applicability to free zones and financial free zones
- Free Zone (including financial free zones) businesses in UAE will be subject to Corporate Tax. However, it has been clarified that the Corporate Tax regime will continue to extend the corporate tax incentives currently being offered to free zone businesses that comply with all regulatory requirements and that do not conduct business in mainland UAE.
- Businesses established in a free zone will be required to register and file a Corporate Tax Return.
Applicability to foreign persons
- Foreign entities and foreign individuals will be subject to Corporate Tax only if they conduct a trade or business in the UAE in an ongoing or regular manner.
- Moreover, Corporate Tax in UAE will generally not be levied on a foreign investor's income derived from dividends, capital gains, interest, royalties, and other investment returns.
Applicability of Transfer Pricing Rules
Transfer Pricing rules and documentation requirements will now be aligned with the OECD Transfer Pricing Guidelines. Documentation will require groups of companies to perform benchmarking searches to justify their pricing policies of inter-company transactions. We wait for further details/clarifications on potential exemptions for qualified intra-group transactions and other compliance requirements that may be introduced.
How We Can Help
Although the press release and FAQ provided relevant information regarding some of the most relevant changes brought forward by the introduction of a UAE Corporate Tax, its technical aspects and specifics will only be known once official legislation is passed. Nevertheless, the current announcement by the UAE Ministry of Finance will change the tax landscape of the UAE Significantly and international groups with businesses in the UAE are advised to evaluate the impact of such development. At JRB, our team of experts can help you in assessing the challenges and opportunities that the introduction of a Corporate Tax will bring.
- Impact assessment of Corporate Tax on business and applicability
- Analysis of the impact of Corporate Tax on Free Zone entities
- Advise on Group Corporate Tax and how to minimize potential risks
- Assist in restructuring the business/operational model from the Corporate Tax perspective
- Advise on withholding taxes.
- Registration for Corporate Tax before the relevant authorities
- Computation of taxable income and corresponding Corporate Tax in UAE
- Preparation and filing of tax returns
- Representation services
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