Corporate Tax

“Your Business, Our Complete Commitment”

Overview

On 31st January 2022, the UAE’s government announced it would be introducing a new corporate tax. The new UAE corporate tax will come into effect in the tax year beginning June 1st, 2023. Businesses whose tax year begins in January 2024 will not have to start paying tax on revenues generated before 1st January 2024.

Corporate Tax

Introduction

Every Taxable person, including Free Zone person, needs to register for Corporate Tax and get a Registration Number. APEX Business Consultants LLC help business with the registration process for corporate tax.

Dubai follows a progressive corporate tax system with rates between 9% to 55%. The UAE’s corporate tax will be a 9% tax on the profits (revenue minus expenses) of all businesses which generate over 375,000 AED (about USD $100,000). If a business earns income that doesn’t exceed AED 375,000, 0% tax will be charged. Also, a different tax rate will be charged for larger multinational companies that have different business conditions.

Upon receiving dividends or selling shares of a subsidiary company, corporate tax law will include a participation exemption from corporate tax. Also, charities, public benefit organisations, investment funds, businesses engaged in the extraction of oil and resources along with wholly government-owned companies are excluded from corporation taxes.

A group of companies may be able to form a tax group in which they would be capable of being treated as a sole taxable entity. To do so, a company or subsidiary needs to refrain from being an exempted party or being registered in a free zone. APEX Business Consultants LLC help business with the registration process for group corporate tax.

Businesses are required to maintain and keep tax records for at least 5 years as per UAE VAT Law. Depending on the types of businesses, the period of record keeping for VAT may differ.

Businesses that do not comply with their Corporate Tax obligations can be subject to fines and penalties. There are both fixed and tax-geared penalties.

Corporate tax is the tax imposed on the profits of businesses. It’s a key aspect of financial planning and compliance for companies. APEX Business Consultants LLC provide strategic corporate tax planning, ensuring businesses maximize deductions, credits, and overall tax efficiency.