Dubai, UAE – (Date) – BestaxCA announces the updated standards of corporate tax in UAE which have been altered by the Federal Tax Authority UAE recently. All Free Zone should know the newly updated corporate tax in UAE implications to survive in this evolving environment.
One notable change to the specification of “Qualifying Income” is the addition of “Income derived from the ownership or exploitation of Qualifying Intellectual Property”. This is seen to be an incentive for businesses that prioritize intellectual property and innovation.
Furthermore, adding “Trading of Qualifying Commodities” to the list of “Qualifying Activities” expands the range of activities allowed in free zones, which might lead to more economic prospects.
The Bestax Chartered Accountants’ Manager of Taxation, Haseeb Hamdani, comments on these amendments, saying, “These legislative updates are crucial for Free Zone entities, signifying a strategic evolution in the UAE’s tax landscape.”
A Free Zone Person may only take benefit of an exclusive corporate tax rate of 0% on their “Qualifying Income” if they meet the qualifying requirements.
A Free Zone Person is considered Qualifying if they fulfill the following requirements:
- Obtaining “Qualifying Income”.
- Not having elected to be subject to corporate tax in UAE at the regular rates.
- Accounting for transfer pricing under the Corporate Tax Law.
‘Holding of shares and other securities’ has been redefined as part of the changes to emphasize long-term investments. The ‘Ownership, Management, and Operation of Ships’ definition has been expanded to encompass a wider range of activities about the maritime industry’s involvement in Free Zones.
OECD Implementation
The United Arab Emirates’ adherence to international tax standards, prioritizing transparency and economic diversity, as demonstrated by its implementation of the OECD Transfer Pricing Rules and the latest modifications.
The Impact on Free Zone Enterprises
Businesses are required to get information on new corporate tax in UAE regulations as the United Arab Emirates continues to update its corporate tax system. The new corporate tax rules and regulations will also impact the Free Zone business.
A Qualifying Free Zone Person will be liable for the normal rates of corporate tax i UAE from the start of the Tax Period in which they failed to fulfill the requirements if they fail to meet any of the requirements or choose to be subject to the regular Corporate Tax in UAE system.
About BestaxCA!
BestaxCA is available to help with corporate tax in UAE planning techniques and to guarantee compliance with corporate tax in UAE legislation. Their knowledgeable tax advisors offer complete solutions to help businesses avoid UAE corporate tax in UAE fines and penalties.
For more questions and complete details, please visit the UAE Federal Tax Authority website or get in touch with Haseeb Hamdani, Manager at BestaxCA.
