Consulting services can provide valuable insights, strategic guidance, pecialized
1901 Shiloh, Hawaii 81063
Welcome to our RUI Consultation Company
Consulting services can provide valuable insights, strategic guidance, pecialized
1901 Shiloh, Hawaii 81063
Welcome to our RUI Consultation Company
YEAR OF EXPERIENCE
Are You Ready for the New Corporate Tax? The tax law in UAE is new with its own specific regulations. Have you chosen your tax consultant? We provide corporate services as well, for new and existing businesses. From tax assessment to registration and filing returns, we have your back.
On June 1, 2023, the UAE introduced a corporate tax policy that imposes a 9% tax on business profits exceeding AED 375,000 ($100,000). This move marks a significant shift in the country’s tax framework, which historically offered a tax-free environment for most businesses. Companies generating less than AED 375,000 in annual profits remain exempt from this tax, allowing smaller businesses and startups to continue benefiting from favorable conditions. However, multinational corporations with profits exceeding AED 3.01 billion ($819 million) are subject to a higher tax rate of 15%. This aligns with the Global Minimum Corporate Tax Rate Agreement, an international initiative aimed at preventing large multinational corporations from shifting profits to low-tax jurisdictions. The UAE’s adoption of this framework demonstrates its commitment to global standards while ensuring it remains an attractive destination for foreign investment and international business activities. The corporate tax applies to profits earned from the financial year starting on or after June 1, 2023. For companies whose tax year begins in January, the corporate tax will be levied on revenues generated from January 1, 2024, onwards. This phased approach allows businesses time to adapt to the new regulations and implement necessary accounting and financial adjustments. The introduction of this tax regime represents a key milestone in the UAE's economic strategy, aimed at broadening its revenue base beyond oil while maintaining its competitive edge as a global business hub. It reflects the UAE’s broader efforts to diversify its economy and align itself with international tax practices. Businesses operating in the UAE are encouraged to review their financial strategies and ensure compliance with the new tax laws to avoid penalties and optimize their tax liabilities under the new regulations.
Get the benefits of owning a mainland business license in Dubai. A top advantage of mainland company setup in Dubai is the permission for complete foreign ownership. Simply put, individuals or businesses from outside the UAE can wholly own and manage the company, eliminating the need for a local sponsor or partner.
Any business generating less than AED 375,000 ($100,000) in profits.
Any government institution and organization
Any business that promotes social and charitable issues.
Any business directly owned and controlled by the UAE government.
Any business involved in mining or extractive activities.
Any regulated governmental or private organizations that deal with social benefit funds, such as retirement or pension plans.
Any regulated real estate investment fund.
Corporate tax is a direct tax imposed on a company's profits, calculated annually based on income after deducting expenses. Businesses are responsible for filing corporate tax returns to comply with government regulations. In contrast, VAT is an indirect tax levied on the sale of goods and services at each stage of the supply chain, with the final consumer ultimately bearing the cost. Businesses collect VAT from customers and remit it to the government. Unlike corporate tax, which is filed annually, VAT is typically paid at the point of sale and reported more frequently, such as quarterly or monthly.
Under the UAE's new corporate tax framework introduced in June 2023, businesses in free zones can maintain their tax-free status if they meet specific conditions. While free zone companies still benefit from a 0% corporate tax rate on qualifying income generated outside the UAE or within the free zone. If a free zone business conducts transactions with the mainland or generates non-qualifying income, a 9% corporate tax rate applies to that portion of profits. Regardless of their tax rate, all free zone businesses must comply with registration and filing requirements, including submitting corporate tax returns to adhere to UAE regulations. Overall, while free zone businesses can enjoy tax incentives, compliance with corporate tax laws is essential.
Designated free zones are areas with unique VAT treatment, where certain transactions are VAT-exempt under UAE law. For businesses operating within these zones, transactions involving goods and services can be VAT-free when conducted within or between other designated zones. This makes them attractive to logistics, manufacturing, and trading companies. Designated free zones also typically offer a 0% corporate tax rate for a certain period, no customs duties, and 100% foreign ownership. Examples: Jebel Ali Free Zone (JAFZA), Dubai Airport Free Zone (DAFZA), and Abu Dhabi Airport Free Zone (ADAFZ).
Non-designated free zones do not benefit from the VAT exemptions available in designated zones, so transactions here are subject to the standard UAE VAT rate of 5%. Despite this, these zones provide the typical free zone advantages such as no corporate taxes (for a specified time), no customs duties, and 100% foreign ownership. Businesses here still benefit from simplified setup processes and specific industry-focused support. Examples: Dubai Media City (DMC), Dubai Healthcare City (DHCC), Ajman Free Zone.
In the UAE, freelancers must obtain a professional business license to operate, which classifies them as legal entities for tax purposes. Unlike individual income, which is generally tax-free, freelancers are subject to a 9% corporate tax on profits exceeding AED 375,000 (approximately $100,000). Profits below this threshold are exempt from corporate tax, allowing small-scale freelancers to operate without tax burdens. Therefore, while freelancers must comply with UAE corporate tax regulations, they benefit from the same thresholds and tax rates as other businesses, paying 9% only on earnings above AED 375,000.
Corporate tax services provide specialized knowledge and expertise, ensuring compliance with the latest tax laws and regulations.
Tax professionals help identify eligible deductions and credits, reducing the overall tax liability for the business.
Outsourcing corporate tax preparation allows businesses to focus on core operations while tax experts handle the complexities of tax filing.
Professional tax services minimize the risk of errors or omissions in tax filings, helping to avoid potential audits and penalties.
Tax professionals assist in developing effective tax strategies that align with the company’s financial goals and operational plans.
In the event of an audit, corporate tax services provide support and representation, ensuring that all documentation is accurate and available.
They ensure that businesses adhere to all tax regulations, avoiding legal issues and maintaining good standing with tax authorities.
Corporate tax services help in projecting future tax obligations, enabling better financial planning and cash flow management.
Analysis of business activities to determine which tax bracket your business falls under. Assessment of whether the business qualifies for tax exemptions and provide tailored recommendations on how to benefit from applicable tax laws.
Assistance for businesses with registering for corporate tax with the Federal Tax Authority (FTA). Management of all the required documentation and meeting important deadlines for tax-related obligations.
Preparation and filing for tax returns promptly to ensure compliance with UAE tax laws and regulations.
Assessment of business revenue to identify any income streams that are exempt from tax liability, ensuring tax payments are accurate and compliant.
Preparation and maintenance of necessary documentation to ensure compliance with transfer pricing regulations, which govern the pricing of transactions between related business entities.
Navigation of corporate tax-related violations and penalties, guidance on corrective actions and strategies to avoid future issues with the tax authorities.
Timeline: 6 to 10 weeksA tax consultant conducts a thorough analysis of your business activities, financial records, and relevant data to determine which taxes your business is liable for under UAE regulations.
The consultant then explores tax-saving strategies, reviewing opportunities to legally minimize your tax liabilities and optimize your financial structure.
Accurate and compliant corporate tax returns are prepared, along with audited financial reports. The consultant ensures that all filings are submitted on time and following UAE tax laws.
The required corporate taxes are paid promptly, ensuring accuracy in the calculations and avoiding any penalties or late fees.
In the event of a government tax audit, the tax consultant will represent your business, providing expert guidance to ensure a smooth and efficient audit process.
Continuous support is offered to address tax-related concerns, ensuring your business remains in compliance with tax laws and regulations while adapting to any changes in the tax landscape.
Business License
Tax Registration Certificate
Financial Statements
Tax Returns
Ownership Documents
Contracts
Bank Statements
Expense Records
VAT Returns
Governance Documents
Valid business license copy.
Evidence of VAT registration (if applicable).
Audited financial statements for the last year.
Copies of previously filed tax returns.
ID and passport copies of shareholders and directors.
Relevant contracts impacting tax liabilities.
Bank statements for the financial year.
Invoices and receipts for business expenses.
Copies of filed VAT returns.
Board resolutions and meeting minutes.
The corporate tax rate in Dubai is set at 9% for taxable income exceeding AED 375,000. A 0% rate applies to income below this threshold, benefiting small businesses and startups.
Corporate tax applies to businesses registered and operating in Dubai, including free zone entities that generate income from the mainland. However, individuals not engaged in business activities, such as employees, real estate, or investment income, are exempt.
The corporate tax regime took effect on June 1, 2023, and applies to financial years starting on or after this date.
No, personal income, such as salaries or investment income from real estate or other assets, is not subject to corporate tax. Only income derived from business activities is taxable.
Businesses in Dubai are required to file a corporate tax return once per financial year. There is no need for advance tax payments or provisional tax returns.
Businesses with taxable income below AED 375,000 are subject to a 0% tax rate, effectively exempting smaller businesses and startups from corporate tax.
Free zone businesses can benefit from tax holidays, but those generating mainland income may be subject to corporate tax depending on the nature of their activities.
Businesses must comply with OECD guidelines and transfer pricing regulations, ensuring that transactions between related entities are conducted at arm's length and reported accordingly.
Businesses can reduce their tax liability by utilizing deductions, investing in plant and machinery, claiming capital allowances, and making contributions to CSR activities.
While corporate tax introduces compliance requirements, it also aligns Dubai with global tax standards, potentially increasing foreign direct investment and modernizing the economy.
