Blog

Category: Blog

Get Bank Assistance in UAE with Our Help

Posted on by Charted Accountants

Bestax is a leading consultancy company in Dubai, providing Bank Assistance in UAE to many business setups. UAE is a global hub for company formation services and financial stability for startups and entrepreneurs. Bestax professionals offer complete support to companies looking for Business Setup Services, business solutions, and related requirements in this regard.

We provide comprehensive innovative support to companies setting up new businesses in the United Arab Emirates. You will get banking services in Dubai from account opening to complete banking solutions in international banking in UAE. Bestax-qualified accountants and financial advisors are trained to offer financial and offshore banking services in UAE.

UAE banking sector is fully equipped with innovative financial products for both domestic and foreign customers. It offers complete banking solutions for corporate and personal purposes with more benefits for offshore companies. These benefits may include asset protection and reduced taxes.

Bank Assistance in UAE- Account Opening

Many business entities inside the UAE and individuals from other nationalities always struggle with opening Bank accounts in UAE.

However, Bestax can help you find the best Bank Assistance in UAE to open your bank account without any hassle. With Bestax, opening a bank account in Dubai for non-residents and other corporate entities is a lot easier.

Bestax ensure that you face no issues while opening a bank account in UAE and fulfill all the mandatory requirements through the end of account creation. Whether it is about a simple reporting system, high-quality banking services, low tariffs on banking facilities, or competitive prices, we cover every aspect.

Documents Required For Bank Assistance in UAE

Bestax Bank Assistance in UAE service provides hassle-free account opening and operating support to numerous FreeZone companies. Our affinity with UAE bankers, helps you easily open an account and manage it effectively. We also proved to be helpful in arranging Business or Personal loans for startups, business expansions, or other entrepreneurs.

Here is the list of documents required for opening accounts

  • Passport Copy
  • Proof of residence anywhere
  • Proof of Business anywhere (if the beneficiary has any current Business)
  • If it is a trading business, provide information of 3 suppliers & 3 buyers.
  • Brief Profile of Owner (CV)

Opening an account and submitting documents is a complex process. Therefore, you can rely on Bestax Bank assistance service in UAE and focus more on the core activities of your business.

How Bestax Helps You with Bank Assistance in UAE?

Bestax-qualified chartered accountants and financial advisors provide complete assistance with company formation services, VAT, and Corporate Tax services. With our Bank Assistance Dubai, you get professional guidance in not only financial decisions but also strategic planning.

We have a list of tailor-made bank assistance services to meet the needs of your business or enterprise. Let’s see how our banking consultants and experts provide Bank Assistance Services in Dubai.

Opening or Setting up a Bank Account

We provide complete Bank assistance Dubai as per your account creation needs. Whether, it is a company current account, savings account, or foreign currency account, we are here to provide all the services.

Preparation of Documents

Bestax experts assist you with all the paperwork and filling required documents for your bank account in UAE. We ensure that all the legal and regulatory criteria are fulfilled.

Selection of Suitable Bank

We advise you to choose a suitable bank depending on your business scale, scope, financial objective, and other relevant factors. Moreover, choosing the right bank also takes into account the costs incurred, benefits, and features offered by each bank.

Offshore Banking Solutions

Our Bank Assistance Services in UAE help you make the best financial and strategic decisions on the offshore banking system. Your offshore business will get banking solutions, asset protection, tax reduction, and global financial diversification to help you achieve business objectives.

Access to International Banking Services

We provide you with complete assistance for cross-border transactions, any foreign currency accounts, and trade financing options on behalf of enterprises.

Consultancy on Investment Banking Services

We give you an impactful and wise consultancy on capital structure, raising funds, mergers, acquisitions, and other investment portfolio management.

Financial Planning

We suggest the most suitable banking solutions for your new business setup to help with growth strategies and achieve financial goals.

Compliance

Bestax ensures that companies are compliant with banking rules, regulations, and general UAE standards.

Risk Assessment

We carry out risk assessment analysis to understand the monetary problems regarding the banking sector and propose suggestions to mitigate them.

Optimization of Taxes

Our professional financial advisors are experienced in making financial arrangements in such a way that businesses minimize tax liability.

Financial Reporting

We help your UAE business devise financial reporting in such a way that it works smoothly with the banks. Moreover, Bestax also assists financial management and completes reporting procedures throughout the year.

Conflict Resolution

If you have been facing any conflicts or banking disputes, we are also here to assist you and guide you through it. Bestax-qualified accountants and tax consultants know what is best for your business and help navigate effective banking solutions.

Bank Assistance in UAE With Us

If you want customized banking solutions in UAE tailor-made for your business needs, you can contact our qualified business consultants. We use cost-effective techniques to provide our customers with customized strategic planning and bank assistance Dubai.

Bestax with its proficient team empowers firms to settle on very much educated decisions. We help businesses work on better management of finances, and accomplish their targets in the UAE market. With complete bank assistance services in Dubai, we help improve their capacity to bring in cash and boost their entire organization plan.

For Business Setup Services, you can talk to our highly qualified business consultants in UAE. They will provide you with a complete guide on Bank assistance services in Dubai or even offshore banking services.

Contact Us Now!

Register Your Company with us and Get Corporate Tax Services in UAE

Posted on by Charted Accountants

Bestax is a top-notch tax registration consultancy firm, that provides a complete guide to Corporate Tax Services in UAE. We help you get a corporate tax registration number with complete assurance to comply with the UAE Corporate Tax regime.

The Ministry of Finance UAE has previously announced the Corporate Tax in 2022. On 22nd October 2023, the President of UAE “Highness Sheikh Mohamed bin Zayed Al Nahyan” issued a Corporate Tax Law. This law provides Federal Corporate Tax legislation for implementation and introduction is applicable from the financial year 1st June 2023.

As a result of this change in the Corporate Tax regime, audit firms and tax advisors in Dubai have started offering Corporate tax advisory services. We not only help you with corporate tax registration services, but we also assist you in corporate tax implementation throughout your business activities.

In this article, you will get a complete guide to register your company for Corporate Tax in UAE. Let’s get an overview of Corporate Tax Registration Services in UAE and their importance.

Corporate Tax Services in Dubai

What is Corporate Tax Registration in UAE?

Corporate tax is a business profit tax where FTA registers an eligible person for Corporate Tax. It allows taxable persons to receive a unique Corporate Tax registration number after registering for corporate tax in the UAE. Many audit firms have started providing Corporate Tax Services in Dubai, after this latest tax reform.

According to the Ministry of Finance, the corporate tax rate for a taxable person is 9% on a profit exceeding AED 375,000. For profits below this threshold level, corporate tax is 0% on taxable income. Bestax provides complete Corporate Tax Services in UAE to new business setups and helps them grow.

Who Should Register for Corporate Tax?

Under Federal Tax Authorities FTA law, every taxable person, including the Free Zone persons falls in this corporate tax regime. FTA requires a taxable person to register under Corporate Tax Registration UAE. The authority requires them to own a unique registration number that is to be used by Tax Authorities for Tax implementation.

If a taxable person is considered exempted from UAE Corporate Tax 2023 by FTA, the individual must be registered in the declared time by authorities. Bestax is always at your service if your company needs to be registered for Corporate Tax. Upgrade and grow your business with our Corporate Tax Services in UAE.

Why Corporate Tax Registration is Important?

The Ministry of Finance and UAE governance has recently introduced corporate tax structures and tax laws that benefit the UAE companies at large. This announcement of Corporate Tax Registration has attracted many businesses, startups, and entrepreneurs.
Here are some of the advantages of corporate tax registration in UAE

  • A new Corporate tax regime helps you stay compliant with tax laws and regulations
  • It helps identify any malicious or illegal tax practices
  • You get access to top-class tax standards globally applicable
  • It enhances the chances of your business operating in UAE and outside the UAE
  • Corporate tax registration is beneficial for businesses as it reduces the after-tax revenue and shareholder’s return
  • Moreover, the corporate tax affects both your direct and indirect shareholdings such as investment funds and private pensions.
  • Businesses can minimize their overall tax liabilities after registering for corporate tax in UAE.

It is a significant step forward to transforming UAE businesses through Corporate Tax Registration transparency and implementing international standards.  So, companies in Dubai have started expanding their businesses in the UAE for better reach globally. Bestax’s Corporate Tax Services in UAE help boost businesses and assist them in achieving their organizational goal. 

How to Register Your Company For UAE Corporate Tax?

  • The first step is to create your account on the Emaratax portal by registering with your email ID and Phone number. You can also log in to your Federal Tax Authority FTA account to
  • Now login to your Emaratax accounts with your existing ID and password.
  • In this step, you must register yourself as a taxable person by selecting a relevant person from the list of taxable persons.
  • Finally, register for Corporate Tax and complete the registration process.

This portal is open for corporate tax registration online 24/7 and you can access it easily through your FTA account. However, if you need assistance with Corporate Tax Services in UAE and Corporate tax registration, our tax consultants in Dubai will guide you.  Moreover, it is always advised to reach out to Corporate Tax Accounting Firm Dubai like Bestax for expert solutions to your corporate tax issues.

What Should Be Required Documents For Corporate Tax Registration Form?

  • FTA allows a taxable person to register their company online. The companies that register their businesses for corporate tax in UAE must submit the following documents.
  • Trade License
  • Emirates ID for the managers, shareholders, and authorized signatories
  • Passport for the managers, shareholders, and authorized signatories
  • Memorandum of Association/Power of Attorney
  • Ejari/Proof of address
  • Bank validation letter (if a natural or legal person has a bank account in the UAE
  • Title Deeds (if a natural or legal person owns a property in UAE)

For Corporate Tax Services in UAE, Bestax is an FTA-approved agency that offers comprehensive business solutions to many UAE companies.

How Do We Help With Professional Corporate Tax Services in UAE?

Bestax is one of the best tax firms in Dubai providing Corporate Tax Services in UAE. With the help of the most qualified tax consultants, your corporate tax registration process becomes very easy. Our professional corporate tax advisors know the implementation of corporate tax and corporate tax compliance to save your time and efforts.

Bestax Chartered Accountants are experienced enough to do UAE tax planning for your business. We also provide Tax Reduction services to improve your company’s performance and credibility. Minimize your Corporate Taxes in UAE with our strategies to mitigate tax liabilities.

With our tax consultancy services, your business is in safe hands. Contact us for top-notch and hassle-free Corporate Tax Registration Services in UAE.

Business Setup in UAE – The Easy Way

Posted on by Charted Accountants

Over the past few years, the UAE trading industry has outgrown into a famous and prestigious business hub for international trade. You will find numerous businesses and startups blooming in UAE, from tourism, technology, trading, and healthcare to manufacturing top-notch products.

Setting up a business from scratch is a time-consuming procedure, However, you will find a simplified UAE Business Setup to cater to your entrepreneurial needs through a hassle-free registration process. If you have been planning for a business setup in the UAE and you don’t know how to begin it, then this guide is for you.

How to do Easy Business Setup in UAE?

Here is a step-by-step guide to setting up a business in the UAE

Step 1: Define the nature of your Business Activity

This step includes choosing your business activities keeping in view the types of business licenses. You will find many options for business activities from which you can decide and prepare a complete business plan before the UAE business setup. It is advised to choose the name of your business prior to license application to make sure that your business name is available for registration.

Step 2: Mainland Zone or Free Zone Business Setup

The next step involves choosing between the mainland zone and the free zone to set up your business in the UAE. Setting up your desired business in mainland or free zone subjects under their rules and regulations respectively.

Free Zone Business Setup

If you choose to trade B2B outside the Free Zone region, you won’t be allowed to do B2C outside Free Zones. With a Free Zone license, you cannot establish a physical office outside the Free Zone.

However, you are allowed to do B2C business, if a customer reaches out to you through a virtual source online.

Mainland Business Setup

On the other hand, choosing a Mainland region that is outside Free Zones gives you permission to start a business in UAE or outside the UAE. However, making a choice between the two zones depends upon the business activity.

Step 3: Determine the Legal Structure of your Business

Defining the legal structure of your free zone or mainland business is important. If you have a business setup in UAE for a free zone company, you have 3 legal structures;

Free Zone Limited Liability Company (FZ LLC)

Free Zone Company (FZ Co.)

Free Zone Establishment (FZE)

If your UAE business setup is in the mainland, then you can select legal structures from 9 given options.

  • Sole Establishment
  • Branch of a GCC company
  • Civil company
  • Branch of a local company
  • Limited liability company
  • Public joint stock company
  • Private joint stock company
  • Holding company
  • Representative office of a foreign company

Step 4: Register your Trade Name

This step involves choosing a Trade Name for your easy business setup in Dubai. While making a choice about Trade Name, you must abide by the following terms and conditions;

  • The trade name must contain an abbreviation stating the suffix for the legal structure of a company such as, an LLC.
  • It must not contain any inappropriate words that may offend the general public.
  • Your trade name must be in line with your chosen business or economic activity.
  • It must not be registered as a name of any other business.
  • Make sure that the trade name must not be the name of government bodies, rulers, or logos and names of government authorities.
  • The trade name and trademarks must be approved by the concerned authorities such as the Ministry of
  • Economy and Department of Economic Development.
  • These certificates are also subject to renewal

Step 5: Initial Approval for the Business Setup in Dubai

You have to apply for the initial approval of your business setup for a no-objection certificate from the UAE government. This step is a way forward for the investors to set up a business and get your business a license to perform business activities in the region.

LSA or MOA Creation

For limited liability, public shareholding, civil or private shareholding company, a Memorandum of Association (MOA) is required. On the other hand, Sole proprietorship requires a Legal service agent agreement (LSA).

Step 6: Business Location and Office Space Selection

In this step, you have to rent an office, purchase land to set up an office, or use a business activity to start your business activities. Choose your office place according to your workforce and business type. Moreover, make sure that the office has all the services and facilities such as; Telecommunications, labor accommodation, meeting rooms, printing facilities, and internet connection.

Your physical office must abide by the requirements of the Department of Economic Development of Emirates. It must follow the policies and regulations of concerned authorities and local municipalities. Once your business location is finalized, you must register your tenancy contract from the Ejari Portal of the Land Department Dubai.

Step 7: Business License

Choose your business license, as per your business activity. Dubai company formation services offer 6 economic licenses for business activities.

  • Commercial License
  • Professional License
  • Tourism License
  • Agriculture License
  • Occupational License
  • Industrial License

Step 8: Documents Submission

You must submit the following documents to reach the final stage of business setup.

  • Copies of previous documents with receipt of initial approval.
  • Attested copy of lease contract
  • Memorandum of Association
  • Approval received from other government entities

Step 9: Pay Fees and Collect your License

After completion of the approval process and fee submission, you can receive a license from the economic department’s service center or online through the website.

Step 10: Registration from the Chamber of Commerce Industry

Your business or company must be registered by the Chamber of Commerce Industry as mentioned.

Make sure that your business or company is registered in the same emirate where the office is located physically. Your company must be registered under any one of the following Chamber of Commerce Industry.

  • Federation of UAE Chambers of Commerce & Industry
  • Abu Dhabi Chamber of Commerce and Industry
  • Dubai Chamber of Commerce and Industry
  • Sharjah Chamber of Commerce and Industry
  • Ajman Chamber of Commerce and Industry
  • RAK Chamber of Commerce & Industry
  • UAQ Chamber of Commerce and Industry
  • Fujairah Chamber of Commerce and Industry

Conclusion

Business setup in Dubai is an amazing opportunity to expand your company operations in UAE. Extending your professional business network in UAE requires you to fulfill above mentioned requirements and complete procedures.

Business setup services in UAE help you gather knowledge about already established businesses as well as startups. Bestax is considered one of the leading business consultancy firms in Dubai. Choosing Bestax will help you get high-quality business setup services in UAE.

However, if you need any guidance for easy business setup in UAE, you can reach out to Bestax for business consultancy services. Bestax Chartered Accountants has experienced professionals who are dedicated to providing Business Setup Services in the UAE. From paperwork, registering your business, choosing an office place to fee submission, and acquiring a business license, Bestax assure you to give you a complete guide until you start your business operations smoothly in UAE. Contact us right now, and let us setup your business in UAE in no time!

UAE VAT: Unlock Growth with Professional VAT Registration Services

Posted on by Charted Accountants

The introduction of Value Added Tax (VAT) in the United Arab Emirates (UAE) has resulted in substantial transformations in the taxation framework for businesses. To tap into growth prospects and ensure compliance with the regulations, businesses must take a crucial step of VAT registration. Comprehending the criteria for VAT registration is of utmost importance as it dictates whether a business is required to register mandatorily or can do so voluntarily.

In this comprehensive guide, we will delve into the criteria that necessitate VAT registration in the UAE and provide a step-by-step process for businesses to easily register through the Federal Tax Authority’s online portal. Additionally, we will explore the importance of seeking Expert VAT Services in UAE and the benefits it brings to businesses in terms of compliance, cash flow management, credibility, and competitive advantage. By equipping yourself with the knowledge and tools presented in this article, you will be better prepared to navigate the VAT registration process in the UAE and ensure your business’s seamless compliance with the tax laws, leading to enhanced growth and success.

Know whether your business need VAT registration or not?

VAT registration in the UAE is mandatory for businesses meeting specific criteria. These criteria encompass:
• VAT is mandatory for businesses in the UAE whose taxable supplies and expenses in the past year have surpassed the mandatory threshold of AED 375,000.
• VAT is applicable to businesses that expect their taxable supplies and imports to exceed AED 375,000 in the upcoming 30 days. It’s important to highlight that this threshold does not pertain to foreign companies. Moreover, businesses meeting either of the following conditions must opt for voluntary VAT
registration.
• The total value of taxable supplies and imports or taxable expenses during the last 12 months exceeds AED 187,500.
• It is expected that the taxable supplies and imports will exceed AED 187,500 in the next 30 days.

By considering these criteria, you can determine whether your business is subject to VAT registration in the UAE.

Easy Registration of VAT

To register for Value Added Tax (VAT) in the United Arab Emirates, businesses can follow a straightforward two-step process through the Federal Tax Authority’s online portal.

Step 1: Set up an e-service account on the Federal Tax Authority’s website.

Step 2: Access the newly created account and complete the VAT registration process.

By following these simple steps, unregistered businesses can easily register for VAT and comply with the tax regulations in the UAE. To successfully register for VAT in the UAE, businesses must create an e-Services account approved by the Federal Tax Authority (FTA). Follow these steps to set up your e-Services account

Step 1: Set up an e-service account:

1. Begin by visiting the Federal Tax Authority website and click on the “Sign-up” button on the home page. Provide essential details like your email ID, password, and security code.

2. Once you submit the form, an automatic verification email will be sent to your registered email ID.

3. Log in to your newly created e-Services account using your username and password.

Step 2: Complete the VAT registration process:

After creating your e-Services account and logging in, you can proceed to register for VAT by following these steps:

1. The “Get Started Guide” will appear, providing specific requirements for VAT registration in the UAE. Carefully read and understand the guide to avoid errors.

2. Click “Proceed” after reviewing the guide, and the VAT registration form will be presented, divided into nine sections

• Entity details
• Identification details
• Eligibility details
• Contact Details
• Business Relationships
• Bank details
• Additional details
• Authorized signatory
• Review and declaration

3. Complete all mandatory fields within each section, ensuring to save your progress as you fill out the form.

4. After providing all the necessary details, click “Save and Review” to review your answers before submission.

5. Now thoroughly review the form and ensuring the accuracy of the provided information, proceed by clicking “Submit for Approval.” Once submitted, your application status on the Dashboard will be updated to “Pending,” and you will receive a confirmation email acknowledging the receipt of your application

By following these steps and submitting accurate information, you can smoothly register for VAT in the UAE and comply with the tax regulations.

Importance of getting VAT Registration Services in UAE

VAT Services in UAE holds significant importance for businesses due to various compelling reasons. Some of these reasons include:

1. Ensuring Compliance: VAT registration is mandatory for businesses meeting specific criteria. By getting VAT Consultancy Services in Dubai, businesses can comply with the law, preventing potential penalties and legal complications.

2. Efficient Cash Flow Management: VAT-registered businesses can reclaim the VAT paid on their purchases. This helps to optimize cash flow, reducing overall costs and facilitating better financial management.

3. Enhanced Credibility: VAT registration signals professionalism and legitimacy to customers and suppliers. It establishes the business as a reputable entity that abides by tax regulations.

4. Avoiding Penalties: Failure to register for VAT can result in significant penalties and financial burdens. By completing the registration process along with experts, businesses can avoid unnecessary costs and legal repercussions.

5. Competitive Advantage: VAT-registered businesses can claim back input VAT on goods and services, allowing them to offer more competitive prices in the market and gain an edge over non-registered competitors.

Documents required for registration of VAT

When registering your business for VAT tax in the UAE through the FTA e-services portal, you will need to submit the following documents:

• A copy of your business trade license.

• Passport copies of the partners or company owners, as declared on the license.

• Copy of the company’s Memorandum of Association (MOA).

• Bank account details.

• Contact details of the company.

• Emirates ID copies of the business partners or owners.

• Description of the nature of performed businesses and activities.

• An income statement of last 12 months.

• Details of the taxable expenses of last 12 months.

• Anticipated income and expenditure for the upcoming 30 days after receiving the Tax Registration Number. Ensure that you have all the necessary documents in order to facilitate a smooth VAT tax registration process for your business in the UAE.

Check your application status:

To check the status of your VAT registration in the UAE, follow these steps and familiarize yourself with the relevant terms:

• Access the official website of the UAE Federal Tax Authority (FTA), where you initiated the VAT registration process.

• Use the credentials you created during the registration process to log in to your account.

• Once logged in, navigate to the section that allows you to review the progress of your VAT registration application.

Understand the application terms

a) Drafted: This status indicates that your registration form has not been completed or submitted yet.

b) Pending: If your application status is “Pending,” it means that the FTA has received your registration form and is either reviewing it or waiting for additional information from you.

c) Suspended: When your application is “Suspended,” it means that the FTA has received your registration form, and a Tax Registration Number (TRN) has been issued for your business. Additionally, your tax group registration, if applicable, has been approved.

d) Rejected: If the FTA has rejected your registration form, it means that your application was not approved, and you will need to address the issues or reapply if necessary.

e) Approved: When your registration status is “Approved,” it signifies that your VAT registration has been successful, and your business is now officially registered for VAT.

By checking your application status and understanding the provided terms, you can keep track of your VAT registration progress and ensure compliance with the UAE’s VAT regulations. Seeking professional VAT registration services can be advantageous for businesses, as it guarantees a streamlined registration process, adherence to the regulations, and expert guidance throughout the journey. Unlock the full potential of your business with Bestax’s VAT registration services and embark on a journey of compliance and prosperity in the dynamic landscape of the UAE. Reach out to Bestax today and take the first step towards VAT compliance and growth

Mastering Corporate Tax Services: UAE Expertise & Benefits

Posted on by Charted Accountants

As corporate tax regulations in the UAE become more stringent, businesses face the challenge of staying compliant while optimizing their tax strategies. To respond these challenges Outsourcing your taxation offers expert solutions, cost savings, and increased efficiency, enabling companies to navigate the complexities with confidence and focus on core operations. Benefit from our comprehensive corporate tax services in UAE and drive your business forward today!

Before heading towards services related to corporate tax the thing you should know

What is corporate tax?

• Corporate Tax is a direct tax imposed on the net income of corporations and other businesses.

• United Arab Emirates (UAE) issued the Federal Decree-Law No. (47) of 2022, commonly
known as the “Corporate Tax Law,” on 9th December 2022.

• In various jurisdictions, Corporate Tax is occasionally referred to as “Corporate Income Tax”
or “Business Profits Tax.”

The above new law mandates that all corporations operating in the UAE must fulfil these three
requirements for law compliance.

• From June 2023, corporate tax registration becomes mandatory.

• It is now required to maintain accurate accounting records as per the approved accounting standards of the UAE.

• Businesses must submit their corporate tax returns to the Federal Tax Authority (FTA).

Expert Corporate Tax Services in Dubai

Failing to understand the services provided by tax firms can have serious consequences for a businessman and their business. Without the expertise of tax professionals, the businessman may struggle to navigate the complex and ever-changing tax landscape, increasing the risk of non-compliance with tax laws and regulations. As a result, the business may face penalties, fines, and legal issues, leading to financial instability and a damaged reputation.

Additionally, the businessman may overlook valuable tax planning opportunities, leading to higher tax liabilities and missed chances to claim deductions. This lack of tax efficiency can strain the business financially, reducing profitability and impeding its ability to invest in growth and expansion. Before listing the Professional Corporate Tax Planning Services in Dubai provided by tax firms, it’s important to know that these firms play a significant role in helping businesses with their taxes. They have specialized knowledge of tax laws and regulations, and they can assist businesses in ensuring compliance,  optimizing tax strategies, and making informed financial decisions.

These are the general services provided by Corporate Tax Specialists in Dubai

1. Corporate Tax Rate Tax Planning

2. Assessment of Corporate Tax Impact

3. Multi-Country Tax Planning

4. Base Erosion and Profit Shifting (BEPS) Solutions

5. FPI Advisory and Fund Compliance Service

6. Corporate Tax Advisory Services for Businesses

7. Individual, Family Office, Estate, and Trust Tax Compliance

8. Technology and Consulting Support for Tax Matter

9. Comprehensive Tax Compliance Support

10. Litigation Support for Tax-related Matters

11. Effective Tax Rate (ETR) Management Solutions

12. Conducting advance tax calculations to facilitate informed financial planning.

13. Ensuring compliance with tax obligations arising from Corporate Tax & ESR laws.

14. Handling the preparation and filing of returns related to Corporate Tax and other applicable
taxes.

15. Providing expertise in global taxation and transfer pricing to optimize cross-border
transactions.

16. Assisting with Corporate Tax transition management for smooth and efficient tax processes.

17. Preparing businesses for Corporate Tax Audits to ensure seamless and successful outcome.

Benefits of Outsourcing Corporate Tax in the UAE

Outsourcing corporate tax in the UAE offers several advantages for businesses, and here are some key benefits

Expertise and Experience

Enlisting the services of a professional firm in the UAE grants access to a team of experienced experts who adeptly manage corporate tax affairs. They possess up-to-date knowledge of the latest regulations, enabling businesses to navigate the intricate tax laws of the UAE. These experts can help minimize tax liabilities and capitalize on available tax incentives.

Save your Cost

Outsourcing corporate tax leads to cost savings in multiple ways. Businesses avoid expenses associated with recruiting, training, and retaining in-house tax personnel. Additionally, there’s no need for investments in tax management software and infrastructure. Moreover, outsourcing allows businesses to pay only for the specific services they require, proving more cost-effective in the long run.

Increased Business Efficiency

By entrusting corporate tax responsibilities to external experts, businesses can concentrate on their core competencies, fostering increased overall efficiency. Tax specialists manage the entire tax process, from preparation to timely filing, freeing businesses to focus on other critical aspects of their operations.

Maximizing Tax Savings

By outsourcing your tax services to a Professional Corporate Tax Services providers, you open the door to maximizing your tax savings. These experts possess in-depth knowledge of tax laws and regulations, allowing them to identify often-overlooked tax deductions and credits. As a result, you can reduce your tax liability and optimize your tax savings effectively.

Risk Management

Compliance with tax regulations is vital to avoid penalties and legal complications. Outsourcing corporate tax to Specialists in Dubai ensures businesses stay updated with the latest regulations and maintain compliance. This helps mitigate the risk of penalties, legal issues, and safeguards the business’s reputation.

Stay Up to Date

Additionally, tax laws are continuously evolving, posing challenges for business owners to have current knowledge. However, by relying on the expertise of a reputable accounting and tax consultancy firm, you can rest assured that you will remain up-to-date with the latest tax laws and regulations. Their dedicated resources and understanding of changes in tax laws ensure that your business remains fully compliant with all applicable tax requirements.

How to Choose the Right Firm for Outsourcing?

Selecting the appropriate corporate tax outsourcing firm in the UAE is crucial for reaping the benefits. To make an informed decision, businesses should look for the following qualities:

1. Reputable Track Record: Ensure the firm has a good reputation and a proven history of managing corporate tax affairs in the UAE.

2. Customized Services: Look for a firm that offers tailored solutions, catering to the specific needs of your business.

3. Expertise in Related Services: opt for a firm that also offers other relevant services like accounting outsourcing, VAT filing, etc. for comprehensive support.

In short hand over your taxation to us and focus on your business. This will lead you to numerous benefits, particularly with the implementation of the new corporate tax regime. Embracing these advantages allows businesses to allocate their resources wisely, focus on growth, and stay ahead of the competition. To explore how outsourcing corporate tax can drive your company’s success, reach out to Bestax today.

Stay Compliant and Avoid Penalties with VAT Return Filing Services

Posted on by Charted Accountants

Value Added Tax (VAT) is a widespread tax imposed on the sale of goods and services. In 2018, the UAE implemented VAT, requiring businesses to comply with its regulations. Under the VAT system, consumers pay a tax based on the value of the goods and services they purchase. The higher the price, the greater the VAT payment. Businesses with either taxable sales or taxable expenses of AED 187,500 and above can register for VAT voluntarily and if their taxable sales or expenses exceed AED 375,00 then registration is mandatory for them.

Regarding Value Added Tax (VAT) return filings, businesses in the United Arab Emirates (UAE) often grapple with complex regulations and the risk of penalties for non-compliance. However, there is good news – professional VAT return filing services in UAE are readily available to alleviate this burden. With their expertise and support, businesses can quickly and confidently navigate the intricacies of VAT return filings. This blog will explore the benefits of top-notch VAT return filing solutions provided by reliable and trusted consultants. So, let’s delve into the world of professional VAT return filing assistance and discover how it can revolutionize your approach to VAT compliance in the UAE.

VAT return filing in UAE

VAT return filing in the UAE is a straightforward procedure that entails submitting a form with details pertaining to VAT-related sales and expenses incurred by a business or entity during a specific tax period. Filing VAT returns is crucial for businesses as it provides a comprehensive overview of the amount payable and facilitates initiating VAT refunds or reclaims. By completing VAT returns accurately and promptly, businesses gain clarity on their VAT obligations and ensure compliance with the tax regulations in the UAE.

Below are the step-by-step procedures for VAT filing in the UAE:

Opening an account with the Federal Tax Authority (FTA):

A business entity must register for VAT and create an account with the FTA. Hiring a tax agent is recommended to ensure accurate information submission. The taxable person should provide the FTA with accurate information of their business & provide documents such as Trade License, Memorandum of Association, Passports & Emirates ID of all managers, shareholders and authorized signatories etc. The tax period for filing a VAT return is decided by FTA. Once a taxable person submits their VAT Registration application to FTA, they have to wait for FTA’s decision on approval. Once the approval is received, FTA will provide the taxable person with their relevant tax period. After that, the taxable person will submit their VAT returns according to those tax periods. Once application is submitted & approved, FTA provides the taxable person with their relevant tax return period.

VAT return filing process

Navigating the VAT return filing process in Dubai requires a systematic approach to ensure compliance with the Federal Tax Authority (FTA) regulations. With the convenience of the FTA’s online portal, businesses can initiate the VAT return filing process seamlessly.
This comprehensive step-by-step guide will walk you through the process:

1. log in to the FTA Service Portal

The next step involves logging in to the FTA’s service portal. Logging in is a straightforward process. Access your account using your unique Tax Identification Number (TIN) and password. You can successfully log in to the portal and proceed with the VAT return filing process by entering your credentials.

2. Select the Return Filing Option

Upon accessing the online portal, you will be presented with various choices. Locate and click on the “Return Filing” option to proceed with VAT return filing. This option is typically found within the e-services section of the portal. By selecting this option, you will be guided to the necessary tools and resources for completing your VAT return filing process.

3. Initiate by Accessing the Online Portal

The initial step in Dubai’s VAT return filing process is to visit the FTA’s online portal at eservices.tax.gov.ae. The online platform is the primary and only method to approach the FTA for VAT return filing in Dubai. Utilizing the online portal is essential, as offline methods are not applicable. Therefore, accessing the online portal becomes the exclusive means to proceed with the VAT return filing application.

4. Complete the VAT Form

Once logged in, complete the VAT form by providing all the requested details. Typically, the form will require information about your business, transactions, tax liability, and any applicable penalties. While submitting the VAT Return, FTA doesn’t ask for any additional supporting documents, however, when submitted an application for VAT Refund, FTA will ask for supporting documents and transaction wise details of all figures entered in the VAT return so it’s important that there are documents for all the figures entered in the VAT Return. Additionally, FTA may perform an audit at any time and ask for documents and additional details regarding anything so it’s important to make sure that the VAT Return filing is being done accurately.

The form will include
• fields for entering net amounts excluding VAT
• VAT amount
Take care to fill in all the required inputs by the provided guidelines.

Accounting for VAT sales, expenses, and inputs:

The business must submit mandatory information regarding VAT sales, expenses, and inputs made throughout the financial year. It includes exempt and zero-rated supplies and expenses incurred at the current VAT rate of 5%.

Calculating the net VAT due to the FTA:

The business must calculate the net VAT due once the VAT sales, expenses, and other inputs are submitted. The difference must be paid to the FTA if the VAT amount due is higher than the recoverable amount. Conversely, if the recoverable amount exceeds the amount due, it can be refunded to the business through VAT refund or reclaim.

5. Submitting the declaration

Before submitting the form, please carefully review all the provided information to ensure its accuracy and completeness. It is crucial to avoid any mistakes or omissions in the form. Take the time to fill in all the required fields without leaving any spaces blank. Once you are confident that the form is accurate and complete, submit it. It is essential to exercise caution during this step as there is no room for errors in such application forms. By being meticulous and thorough, you can minimize the risk of mistakes. Finally, click the submit button to submit your application form for VAT return filing formally.

6. Final Payment and Filing Deadline

Within the online portal, you will find a tab labeled “My Payments.” Use this option to make the payment for your final VAT return. It is essential to promptly fulfill the payment requirement to ensure compliance with the VAT regulations. Additionally, pay close attention to the filing deadline for your application. It is crucial to know the last date for submitting the VAT return. It prevents potential issues where you may miss the deadline after applying. By staying vigilant and proactive, you can safeguard against any last-minute complications. Always prioritize adhering to the filing deadline to remain on the safe side of VAT compliance.

Administrative Penalties for VAT in the UAE

Businesses must be cautious and ensure accurate VAT return filing in the UAE. Incorrect information or misleading figures can result in significant fines and penalties. By following these steps diligently, businesses can fulfill their VAT obligations and maintain compliance with the tax regulations in the UAE.

Actions

1) If the designated legal representative of a taxable person fails to meet the tax return submission deadline, the penalties imposed will be borne by the personal funds of the legal representative.
2) The Registrant’s submission of an improper Tax Return.

Penalties

For the initial violation, a penalty of 1,000 AED will be levied. If the violation is repeated within 2 years, the penalty amount will increase to 2,000 AED.

1. A fixed penalty of 1,000 AED will be applied for the first instance of non-compliance.

2. In the case of repeated non-compliance, a penalty of 2,000 AED will be levied.

3. However, as an exception to the first penalty clause, if an incorrect Tax Return results in a Tax difference that is less than the fixed penalty mentioned in the first clause, a penalty equivalent to the Tax difference, with a minimum of 500 AED, will be imposed.

4. Individuals who rectify their Tax Return before the payment due date will be exempted from the penalties in the first and second clauses.

Can Taxable Persons submit a Reconsideration request for VAT Penalties?

Taxable persons can submit a reconsideration request regarding a VAT penalty imposed on them. If a taxable person disagrees with the penalty decision, they can formally request reconsideration to the relevant authority within 20 working days of receiving the penalty decision. The authority can either fully or partially grant the reconsideration request. To gain a better understanding of VAT penalties in the UAE and the process of requesting reconsideration, it is advisable to consult a reputable VAT
consultancy in Dubai.

Waiving or Reducing Administrative Penalties

The Federal Tax Authority can reduce or waive an imposed administrative penalty in certain circumstances. It may occur if the taxable person presents a valid justification before the authority or provides evidence supporting their defense against the violation that led to the penalty imposition. The application for reduction or waiver must be submitted to the authority within ten working days after the relevant cause has expired, following the procedure specified by the authority. It is also essential that the applicant has yet to receive any administrative penalties in the two years prior and can provide evidence of rectifying the violation.

Engage the Services of Expert Tax Consultants in the UAE

To ensure compliance with VAT regulations and mitigate the risk of penalties, it is highly recommended to seek the assistance of top tax consultants in the UAE. By consulting with experts in the field, you can navigate the complexities of VAT compliance, understand the implications of penalties, and receive guidance on avoiding non-compliance. Contact us today for professional assistance and support in managing your VAT-related obligations.

Conclusion

Maintaining VAT compliance and avoiding penalties is of utmost importance for businesses in the UAE. By availing of top-notch VAT return filing services, businesses can streamline their VAT compliance process and ensure accurate and timely submissions. By adhering to the step-by-step procedures for VAT filing, businesses can minimize the risk of penalties and maintain compliance with the Federal Tax Authority (FTA). Furthermore, taxable persons have the right to request reconsideration in case of penalties, and the FTA may consider reducing or waiving penalties under certain circumstances. To simplify the complexities of VAT compliance and mitigate risks, it is highly recommended to engage the services of expert tax consultants in the UAE. By doing so, businesses can ensure they stay compliant with VAT regulations, reduce the chances of penalties, and confidently focus on their core operations.

Corporate Tax Assessment Services in UAE

Posted on by Charted Accountants

Do you have a business operating in the UAE and grappling with the complexities of corporate taxation? Look no further! The comprehensive range of corporate tax services in UAE is here to assist you in navigating the intricate world of tax regulations and requirements. Whether you need assistance with tax assessment, registration, return filing, accounting, audits, compliance, or expert advisory, you are going to find solutions to meet your unique needs in paragraphs following this one. Discover how corporate tax services can simplify your tax journey and optimize your financial outcomes. In Dubai, the UAE’s thriving business hub, numerous corporate tax firms provide services to assist businesses in managing their tax obligations and optimizing their tax positions. These firms offer expertise in corporate tax planning and strategy. Services include the following:

Corporate Tax Assessment Services

When implementing corporate tax, it becomes crucial to assess the tax liability of a company based on its revenue. This assessment involves a careful calculation of income, application of applicable tax rates, and consideration of any deductions or exemptions that the company may qualify for.

Corporate tax assessment is a systematic process that examines the opportunities for making relevant changes within and outside the business entity or group. The primary objective of this assessment is to establish a foundation for effective tax planning, business restructuring, and the implementation of robust compliance verifications.

Moreover, a comprehensive corporate tax assessment enables businesses to identify opportunities for business restructuring, such as restructuring ownership or operational structures, to enhance tax efficiency and overall performance. It also plays a crucial role in conducting compliance verifications to ensure that the company meets all tax-related requirements and minimizes the risk of non-compliance.

The Corporate Tax Assessment Process in the UAE can be categorized into three main stages:

  • Impact Assessment
  • Document Assessment
  • Tax Compliance Assessment

Assessing the Impact of Corporate Tax in the UAE

Corporate Tax Impact Assessment involves a systematic evaluation of how tax laws, regulations, and policies can potentially affect a company’s financial performance. This comprehensive process entails analyzing the company’s existing tax position, identifying potential risks and opportunities, and formulating strategies to enhance tax efficiency. By conducting a thorough assessment, businesses can gain valuable insights into the potential implications of corporate taxation, enabling them to make informed decisions and proactively manage their tax obligations.

A comprehensive Corporate Tax Impact Assessment in the UAE covers various key aspects, including:

1 Tax Compliance: Assessing the company’s devotion to UAE tax laws and regulations, including the timely submission of tax returns and payment of taxes.

2 Tax Planning: Identifying opportunities for the company to minimize tax liabilities and maximize tax benefits through effective tax planning strategies, such as leveraging available tax credits and deductions.

3 Transfer Pricing: Evaluating the company’s transfer pricing policies to ensure compliance with tax regulations when conducting transactions between related entities, including the transfer of goods, services, and intellectual property.

4 Business Structures: Analyzing the existing business structure of the company and exploring potential changes that could optimize tax benefits and minimize tax liabilities based on the company’s specific circumstances.

5 Tax Incentives and Exemptions: Assessing the company’s eligibility for tax incentives and exemptions provided by the UAE government, such as those offered to companies operating in free zones or engaging in specific industries.

6 International Tax Considerations: Examining the impact of cross-border transactions on the company’s tax position and ensuring compliance with international tax laws and regulations when conducting business activities globally.

Document Assessment Services for Corporate Tax

It involves ensuring that businesses maintain accurate and organized financial records as per the UAE corporate tax requirements. It is crucial to follow these regulations to avoid potential penalties, which the government may introduce in the future.

Businesses must retain records that support the information presented in their UAE corporate tax returns and other documents submitted to the Federal Tax Authority (FTA). By conducting this assessment and maintaining proper documentation, companies can demonstrate compliance and safeguard against any adverse consequences related to corporate tax.

Assessment of Corporate Tax Compliance

In order to facilitate self-assessment of corporate tax obligations, the Federal Tax Authority (FTA) has established a dedicated portal where businesses can seek clarification regarding their tax preparation. If there are any concerns or uncertainties related to planned tax preparations or transactions, businesses have the option to request clarification on the appropriate corporate tax treatment through this portal. By submitting their queries to the FTA, businesses can obtain the necessary guidance and clarification.

It is worth considering the expertise of Professional Corporate Tax Solutions in Dubai to navigate the complexities of corporate tax law effectively. These consultants have extensive knowledge and experience in corporate tax matters, enabling them to provide valuable insights and best practices. Relying on their expertise can help businesses avoid confusion and ensure compliance with corporate tax regulations while benefiting from optimized tax strategies.

Corporate Tax Registration Services

Under the Federal Decree Law 47 issued by the Federal Tax Authority (FTA), all taxable persons, including Free Zone Persons and Exempted Persons, are required to register for Corporate Tax and obtain a unique Tax Registration Number. Corporate Tax returns must be filed within 9 months from the end of a specific period, and the tax liability should be paid by the deadline.
The FTA has specified a specific format and timeline for registration, which must be followed by Taxable Persons unless exempted by the Minister. Once registered, the Corporate Tax rate is 9% for taxable income exceeding AED 375,000, while taxable income up to AED 375,000 is subject to a 0% rate. Compliance with these registration and tax payment obligations is essential to meet the requirements of the Corporate Tax regime.

How to register?

The registration process for UAE Corporate Tax is facilitated through the EmaraTax platform, an online portal provided by the Federal Tax Authority. Taxpayers can create an account on EmaraTax or migrate their existing FTA Account to access a range of tax services, including corporate tax registration, returns, refunds, deregistration, and payments.

To register for corporate tax in the UAE:

1  Create an account on EmaraTax platform.

2 Gather required documents.

3 Fill out the registration form.

4 Submit the form and documents.

5 Await confirmation and receive Tax Registration Number (TRN).

Corporate Tax Return Filing Services

Corporate tax return filing is a legal requirement for companies in the UAE. It is necessary to submit a report to the tax authority, detailing the company’s income and expenses. Failing to file tax returns can lead to penalties and fines. All businesses, regardless of income level, must file corporate tax returns. Free Zone entities are also required to file returns. Businesses need to file tax returns once per tax period, with no advance filings necessary. The deadline for filing is within 9 months from the end of the relevant tax period. Filing corporate tax returns offers benefits like efficient cost control, time management, and the ability to combine group tax amounts.

How to File Corporate Tax Returns

To facilitate the process of filing Corporate Tax Returns, the UAE offers the EmaraTax portal, which allows companies to file their tax returns online. Currently, the Federal Tax Authority (FTA) has implemented pre-registration of corporate tax for selected entities, and if your company falls under this category, you can register for corporate tax through the EmaraTax platform. If you haven’t created an account on EmaraTax yet, there is a step-by-step guide available to help you log in and complete the registration process. EmaraTax has undergone a reorganization of the user experience by merging with the UAE Central Bank and UAE PASS, aiming to provide a more streamlined and user-friendly platform for taxpayer.

1 Tax registration: Obtain a tax registration number from the Federal Tax Authority (FTA) by providing the necessary documents and information.

2 Record keeping: Maintain accurate and organized records of all financial transactions and relevant tax-related documents in compliance with the UAE tax laws.

3 Preparation of tax return: Calculate the company’s taxable income and prepare the tax return, taking into account eligible tax deductions and exemptions as per the UAE tax regulations.

4 Filing of tax return: Submit the completed tax return to the FTA through their online platform, e-Services, within the specified deadline.

5 Payment of tax: Settle the tax liability mentioned in the filed tax return by making the payment on or before the due date.

6 Tax audit: In certain cases, the FTA may conduct a tax audit, during which they may request additional information or documents to verify the accuracy and compliance of the filed tax return.

Corporate Tax Assessment Accounting Services

Corporate tax Assessment accounting services refer to the professional assistance provided to businesses in managing their tax-related accounting processes and ensuring compliance with corporate tax regulations. These services are typically offered by accounting firms or tax experts who specialize in corporate taxation.

Corporate tax accounting services encompass various activities, including:

1 Tax planning: Advising businesses on tax strategies and planning to minimize their tax liabilities and maximize available tax benefits.

2 Tax provision preparation: Assisting in the preparation of tax provisions, which involve estimating and recording a company’s current and deferred tax expenses or benefits.

3 Financial statement tax disclosures: Ensuring accurate and compliant reporting of tax-related information in financial statements, including disclosures of tax provisions, deferred taxes, and tax contingencies.

4 Tax compliance: Assisting with the preparation and filing of corporate tax returns, including calculating taxable income, applying tax rates, and claiming eligible deductions and credits.

5 Tax audit support: Providing support during tax audits conducted by tax authorities, including responding to inquiries, preparing documentation, and representing the company’s interests in discussions with tax officials.

6 Tax research and advice: Conducting research on complex tax issues, interpreting tax laws and regulations, and providing expert advice on tax matters specific to the business’s industry and operations.

7 Tax accounting software implementation: Assisting in the selection and implementation of tax accounting software to streamline tax processes, improve accuracy, and enhance reporting capabilities.

Corporate Tax Audit Services

Corporate Tax Audit in the UAE is a compulsory process that involves examining the tax liability, compliance, and financial records of eligible companies. An auditor reviews the company’s financial statements, tax returns, and documents to identify any discrepancies or errors.

The purpose of a corporate tax audit is to ensure that businesses are adhering to the corporate tax laws and regulations set by the Federal Tax Authority (FTA) in accordance with the guidelines provided. All companies are required to comply with the Corporate Tax Law and undergo these audit procedures.

The FTA conducts these audits to investigate whether taxable companies have fulfilled their obligations by settling all tax debts and ensuring timely collection and payment of taxes to the authorities. By conducting tax audits, the UAE government aims to enforce compliance with tax regulations and maintain the financial integrity of the tax system.

Documentation requirements for audit under the UAE Corporate Tax regime:

Under the UAE Corporate Tax regime, businesses must maintain financial and other records that explain the information included in their CT return and other documents submitted to the FTA. Additionally, individuals or entities eligible for tax exemption need to keep records to demonstrate their exempt status to the FTA. Now the question is whether it is required to have the financial statements or books of accounts audited under the UAE Corporate Tax regime?

The requirement for auditing the financial statements of a business by an accredited audit firm is determined by the relevant company laws and regulations. However, under the UAE Corporate Tax (CT) regime, a Free Zone Person is mandated to have audited financial statements if they wish to avail themselves of the 0% CT regime. Obtaining an audit for the books of accounts is strongly advised as it helps maintain accurate records and facilitates compliance with financial laws. Furthermore, it provides a clear understanding of the business’s financial position, profit or loss, and aids in meeting any
financial-related obligations. It is important to note that corporate tax audits in the UAE are not conducted randomly, but rather based on specific criteria. To avoid potential fines or penalties associated with a tax audit, businesses should ensure full compliance with all tax regulations and laws.

To meet the requirement of preparing audited financial statements for corporate tax purposes
in the UAE, individuals or entities must adhere to specific accounting standards:

1. If the revenue exceeds 50 million dirhams, the financial statements should be prepared following the International Financial Reporting Standards (IFRS).

2. If the revenue is less than 50 million dirhams, the financial statements should be prepared following the Financial Reporting Standards for Small and Medium-sized Enterprises (FRS for SMEs).

3. Qualifying Free Zone Persons in Dubai must comply with IFRS accounting standards when preparing their financial statements for the purpose of corporate tax in the UAE.

Conclusion

In conclusion, businesses in the UAE dealing with corporate tax complexities can rely on comprehensive corporate tax services. These services cover various areas such as tax assessment, registration, filing, accounting, audits, compliance, and expert advice. By partnering with corporate tax firms in Dubai, businesses can streamline their tax processes, ensure compliance with regulations, and improve their financial outcomes. Bestax is here to inform and assist you on corporate tax services in the UAE whenever you need it

 

Demystifying Corporate Tax Services in UAE

Posted on by Charted Accountants

Overview of UAE Taxation

While income tax is not applicable to individuals, the UAE has introduced other tax categories such as Excise Tax (imposed on goods with health or environmental risks) and VAT (imposed at each stage of the supply chain). For economic growth and ensuring sustainable government revenue requires the
implementation of a thoughtfully designed tax system. In the United Arab Emirates (UAE), individuals are exempt from income tax, but the tax landscape comprises multiple categories. One such category is excise tax, which was introduced countrywide in 2017. This indirect tax targets specific goods that pose risks to human health or the environment, such as tobacco and energy drinks. By levying excise tax on these items, the UAE aims to discourage their consumption while generating additional revenue for public welfare.

The UAE also implemented the Value Added Tax (VAT) on January 1, 2018. VAT is an indirect tax levied at each stage of the supply chain, ultimately borne by the end consumer. With a VAT rate of 5%, this tax applies to most goods and services, including food, commercial buildings, and hotel services, unless explicitly zero-rated or exempted. The objective is to ensure a fair and sustainable tax system while balancing the needs of businesses and consumers. The introduction of VAT in UAE serves various purposes beyond revenue generation. It contributes to fiscal stability, supports economic diversification efforts, and facilitates the development of public infrastructure. By adopting VAT, the UAE aligns itself with global taxation standards while creating an enabling environment for both local and international
enterprises.

The UAE’s commitment to fostering economic growth and public welfare is evident through the implementation of excise tax and VAT. These tax systems play a vital role in shaping the country’s financial landscape, ensuring a steady revenue stream for government initiatives while considering the impact on individuals and businesses alike. Through these measures, the UAE strives to build a robust and sustainable economy that benefits its citizens and residents.

Introduction of Corporate Tax

The latest addition to UAE’s tax landscape, signifies a significant shift in the country’s direct taxation approach. Unlike other forms of taxes, Corporate Tax is levied directly on the net income of corporations and businesses operating within the UAE. The UAE proudly maintains one of the lowest corporate tax rates in the GCC region, promoting a favorable business environment and attracting local and international investors. Article 3 of the Corporate Tax Law outlines the tax rates, which are straightforward and structured as follows

For taxable income up to AED 375,000, the corporate tax rate is 0%.
For taxable income exceeding AED 375,000, the corporate tax rate is 9%.

To further enhance the ease of doing business and support economic growth, the Corporate Tax Law incorporates various benefits and exemptions. Here are some notable measures
• Small business relief: Businesses engaged in activities within the UAE with an annual revenue not exceeding AED 3,000,000 can apply for small business relief. This relief, subject to compliance with the requirements stated in Ministerial Decision No. 73 of 2023, provides eligible businesses with certain tax advantages.
• Free zone companies: Qualifying free zone entities may benefit from a 0% corporate tax rate on their qualifying income. This measure aims to encourage investment and facilitate business operations within the designated free zones.
• Transfers within a qualifying group: When a transaction occurs between taxable entities within a qualifying group, no profit or loss is taken into account for calculating the taxable income. This exemption applies if either one of the taxable entities has a direct or indirect ownership interest of at least 75%, or a third party has such an ownership interest.
• Business Restructuring Relief: Certain transactions undertaken as part of the restructuring or organization of a business may be eligible for relief where no profit or loss is accounted for in calculating the taxable income.

These provisions reflect the UAE’s commitment to creating a conducive business environment and supporting enterprises of all sizes. By offering tax incentives and streamlining the taxation process, the UAE aims to attract investment, foster economic growth, and encourage business development. The introduction of Corporate Tax represents a milestone in the UAE’s tax system, signaling its readiness to adapt to evolving global taxation standards. Through well-crafted legislation and strategic measures, the UAE strives to strike a balance between generating revenue for government expenditure and promoting a business-friendly environment, thereby paving the way for sustained economic progress.

Significance of Corporate Tax

Corporate Tax marks a momentous turning point in the realm of taxation within the UAE, heralding a new era in the country’s fiscal landscape. Distinguishing itself as the sole form of direct taxation implemented, Corporate Tax holds immense significance for both the government and businesses operating within the UAE. By targeting the net income of corporations and businesses, Corporate Tax aligns with international taxation norms and fosters a fair and equitable approach to revenue generation. It introduces a direct link between taxable entities and their financial contributions to the nation’s
economic growth and development.

This groundbreaking step reflects the UAE’s progressive outlook and its commitment to strengthening its fiscal framework. By implementing Corporate Tax, the UAE recognizes the need to diversify its revenue sources and ensure a sustainable financial foundation for the government’s various expenditures and ambitious initiatives. Moreover, Corporate Tax underscores the UAE’s aspiration to uphold transparency and accountability in the business landscape. By levying tax on the net income of corporations, the government establishes a clear and well-defined framework for businesses to fulfill their fiscal responsibilities. This serves to instill a sense of integrity and financial discipline, while also
fostering a culture of compliance among businesses operating within the UAE.

Additionally, the introduction of Corporate Tax showcases the UAE’s resilience and adaptability in the face of global economic trends. It signifies the country’s proactive approach to aligning its taxation system with international standards, enabling it to remain competitive in the global business arena. By embracing direct taxation, the UAE demonstrates its willingness to adapt and evolve, ensuring it remains an attractive destination for both domestic and foreign investments.

Overall, the advent of Corporate Tax represents a significant leap forward for the UAE’s tax system, establishing a foundation for sustainable revenue generation, economic growth, and continued prosperity. This historic step reaffirms the UAE’s commitment to responsible fiscal management, providing a robust framework that supports the nation’s aspirations for long-term development and prosperity.

Competitive Tax Rates

The UAE maintains one of the lowest corporate tax rates in the GCC region. The Corporate Tax Law outlines a straightforward tax structure.

Tax Registration and Filing

Tax registration and filing procedures form a crucial aspect of the Corporate Tax system in UAE, ensuring compliance and accountability among taxable entities. Understanding the intricacies of this process is essential for businesses operating within the country.

First and foremost, taxable persons are mandated to undergo tax registration and obtain a unique corporate tax registration number. This identification number serves as a vital record, enabling the government to track and monitor the tax obligations of each entity. By registering for Corporate Tax, businesses establish their legal status and acknowledge their responsibility to contribute to the nation’s fiscal framework.

Once registered, taxable persons are required to fulfill their obligations by filing a comprehensive tax return within nine months after the conclusion of the respective tax period. These tax periods typically span a duration of 12 months, coinciding with the financial statements prepared by the businesses. This alignment facilitates accurate reporting and ensures a standardized approach to tax assessment. Within the specified timeframe, taxable persons must diligently compile and submit their tax returns, providing a comprehensive overview of their financial activities and net income. This process entails meticulous record-keeping and financial documentation to accurately reflect the taxable entity’s financial standing and liabilities.

Moreover, alongside the submission of the tax return, businesses are obliged to settle their Corporate Tax dues within the same nine-month period. This financial contribution serves as a vital source of revenue for the government, enabling it to fulfill its obligations towards public welfare, infrastructure development, and the overall advancement of the nation.
Recognizing the dynamic nature of business operations, the UAE tax system acknowledges that circumstances may arise where a taxable entity needs to modify its tax period. In such cases, businesses are afforded the opportunity to request a change in their tax period, allowing for greater flexibility and adaptability to align with their specific financial reporting cycles.

Overall, the tax registration and filing procedures exemplify the UAE’s commitment to ensuring transparency, accountability, and fairness in the Corporate Tax system. By adhering to these requirements, businesses contribute to the sustainable revenue generation essential for the country’s economic growth and the realization of its development goals.

Conclusion

The implementation of the corporate tax regime in the UAE fosters economic growth, infrastructure development, and public domain advancement. It aligns the country with international standards while providing a favorable business environment for both domestic and international enterprises.

The Best Corporate Tax Services in UAE

Posted on by Charted Accountants

The New Corporate Tax in the UAE

In an unprecedented move, the UAE Ministry of Finance announced the implementation of a new corporate tax system on January 31, 2022. This pivotal change, slated to take effect from the financial years beginning on or after June 1, 2023, marks a turning point in the UAE’s tax landscape. The decision has sparked a need for businesses operating in the region to grasp the implications of this new system and equip themselves for the changes it will introduce.

The Purpose and Structure of Corporate Tax

The corporate tax, often known as a corporation or company tax, is a direct tax imposed on the net earnings of corporations or businesses. It applies to domestic companies, where the business is incorporated within the country, and foreign companies generate income from the country. In the case of the UAE, the government has instituted a standard corporate tax rate of 9%, one of the lowest within the GCC region, excluding Bahrain. This rate reflects the UAE’s commitment to maintaining an attractive business environment while aligning with global taxation trends.

The new tax system has been designed to incorporate international best practices and standards to ensure fairness and equity. Simultaneously, the UAE government has made a concerted effort to minimize the compliance burden on businesses, intending to maintain ease of business in the region.

Key Changes and Implementations of Corporate Tax Services in UAE

In December 2022, the UAE released the Federal Decree-Law No. (47) of 2022 on the Taxation of Corporations and Businesses (also known as the ‘CT Law‘). This significant legislation expands on many key provisions previously mentioned in the public consultation document that the Ministry of Finance released in April 2022.

The CT Law aligns strongly with international best practices, reflecting the UAE’s commitment to global fiscal transparency and cooperation standards. Furthermore, it aims to place a relatively light compliance burden on businesses, reducing the administrative load compared to other tax regimes internationally.

Understanding the Scope and Application of the New Tax Law

Comprehending the breadth and application of the new corporate tax law is critical for all businesses operating in the UAE. It ensures that they can adequately prepare and adjust their financial strategies and operations.

Who is Subject to Corporate Tax Services in UAE?

The CT Law divides taxable persons into two categories: residents and non-residents. The definitions are designed to clarify all types of businesses operating in the country. For residents, this includes any juridical person incorporated, established, or recognized by the legislation of the country or a Free Zone. It also includes any person incorporated, established, or recognized by foreign jurisdiction legislation managed by the country. Natural persons conducting business in the country and persons as determined in a Cabinet decision also falls under the resident category.

Non-residents, conversely, can be subject to the new tax law if they have a permanent establishment in the UAE, derive income from the UAE, or have a nexus within the UAE as determined by a Cabinet decision.

The New Tax Regime

From June 1, 2023, the provisions of the Federal Decree-Law No. 47 of 2022 will apply to businesses covered by the law. It will occur from their financial year commencing on or after the stated date. A notable feature of the law is the tax threshold, set at AED 375,000. Businesses with an income up to AED 375,000 or below will enjoy a 0% tax rate, while those earning above this threshold will be subject to a 9% tax rate. The rate for large multinational corporations meeting specific criteria under “Pillar 2” of the OECD Base Erosion and Profit Shifting Project is yet to be specified.

The Federal Tax Authority (FTA) will assume responsibility for administrating the corporate tax regime, acting as the guiding and enforcing body for the new system.

The Role of Corporate Tax Services in the New Tax Environment

In this new era, the role of corporate tax services in the UAE is set to become even more crucial. Implementing corporate tax will bring a new level of complexity to the business environment, and companies will need expert advice to navigate it effectively.

Navigating Compliance with the New Tax Laws

Corporate tax services assist businesses trying to understand and comply with new tax laws. They help businesses interpret their obligations, calculate potential tax liabilities, and avoid common errors in the registration process. The complexities of the new tax laws make professional guidance necessary for many companies.

Strategic Planning and Forecasting in Light of New Tax Regulations

Alongside ensuring compliance, corporate tax services also play a crucial role in strategic planning and forecasting. Their understanding of new tax laws allows businesses to plan for the future, optimize their tax liabilities, and make informed strategic decisions. By leveraging their insights into the new tax environment, businesses can ensure they are well-prepared for future changes.

The Importance of Top Corporate Tax Services in Dubai and UAE

Given the critical nature of these changes, businesses need to select a corporate tax service that meets their specific needs.

Identifying the Right Service

Several top corporate tax services operate in Dubai and the broader UAE, offering a comprehensive range of services to support businesses in adapting to the new corporate tax laws. These services include general advice and consultation to strategic planning and compliance services.

What to Look for in a Corporate Tax Services in UAE

When selecting a corporate tax service, businesses should look for providers that clearly understand local and international tax laws, provide personalized services tailored to their needs, and prioritize clear, effective communication. The best providers ensure businesses understand their tax obligations and how to meet them and can support them through every step of the process.

Corporate Tax Registration Process in the UAE

The registration process for corporate tax is another area where corporate tax services can provide invaluable assistance. Engaging a professional corporate tax service can ensure all requirements are met and the process is handled accurately and efficiently.

Aiding the Registration Process

While the specifics of the registration process will be governed by the laws and regulations of the respective Emirate, it can still be a complex and time-consuming task. Corporate tax services in UAE can provide the necessary expertise to guide businesses through this process, ensuring they meet all requirements and avoid potential pitfalls.

Conclusion

The introduction of corporate tax in the UAE signifies a seismic shift in the region’s business landscape. Whether you are a domestic company or an international corporation operating in the UAE, understanding these changes and how to navigate them will be crucial. Engaging a top corporate tax service can provide the support needed to successfully adjust to this new environment.

The upcoming corporate tax regime necessitates careful planning and proactive decision-making. Businesses need to be strategic and thoughtful in their approach, and expert guidance from top corporate tax services in the UAE can be instrumental in this process. Their insights, experience, and proficiency can help businesses thrive in the new tax environment, ensuring they are well-positioned for success in the coming years.

Monday to Saturday
09:00 - 20:00

Office 804, Park Lane Tower, Business Bay
Dubai, UAE

Email
info@bestaxca.com

CALL US
+971 56 7981808

Bestax Chartered Accountants is a distinguished financial and business consulting firm that maintains a strong presence in Dubai, Canada/US, and beyond. Our unwavering commitment to excellence shines through our comprehensive range of services. 

Get Free Consultation

Our Services

Quick Links

Our Locations

UAE Office

Office 804 Park Lane Tower Business Bay Dubai UAE

  +971-04-5853215

Canada Office

5292 Fallingbrook Drive, Mississauga, Ontario

  +1 4167200566
Copyright 2023 Bestaxca, All Rights are Reserved.
Facebook Twitter Instagram Linkedin