A Complete Guide to Corporate Tax Planning in Dubai
The new corporate tax in UAE means changes for your business. Get ready! Your systems, tech, processes, and staff may need adjustments. Good planning services can help. Make a strategy for corporate tax planning and management in Dubai. Stay legal and cut your tax bill.
Intelligent tax planning lets you invest wisely and grow your wealth. It also helps the economy and avoids legal headaches. Corporate tax management lets you manage your spending, investments, and tax savings. This blog, by Shuraa Tax, will help you understand Corporate Tax Planning in Dubai. Continue to read.
Dubai Steps into a New Tax Era
Starting June 1, 2023, the UAE Corporate Tax system will impact businesses nationwide. The tax rates for UAE companies range from 0 to 9%, depending on their taxable income.
To Advocate tax transparency and curb harmful tax practices, the UAE introduced Federal Decree-Law No. 47 of 2022 on taxing Corporations and Businesses. This law helps set the stage for implementing a Federal Corporate Tax in the UAE, effective for financial years beginning on or after the launch date.
Corporate tax mainly focuses on collecting taxes on net income or profit. This tax introduction aligns with the UAE’s strategic goals, hastens development and transformation, and upholds its commitment to international standards.
Understanding Corporate Tax and Its Impact on Businesses
Corporate Tax applies to different groups, like companies based in the UAE, individuals doing business there, and foreign companies with a setup in the UAE.
If you are a UAE-based company, like an LLC, PSC, or PJSC, you are subject to Corporate Tax because you are seen as a resident entity. Foreign companies get taxed if they are “managed and controlled” from within the UAE.
The Residents pay taxes on income earned worldwide. The non-residents only pay on income from their UAE setup or earnings sourced in the UAE. Tax rates are 0% for income up to AED 375,000 and 9% for anything above that.
Who’s Exempt from UAE Corporate Tax Law:
- Government Entities and Controlled Entities specified in a Cabinet Decision are exempt from Corporate Tax.
- Extractive Businesses and Non-Extractive Natural Resource Businesses are also exempt.
- Businesses involved in extracting UAE’s natural resources and certain non-extractive activities subject to Emirate-level taxation are excluded from UAE Corporate Tax, provided they meet specific conditions.
- Several entities in the UAE are exempt from Corporate Tax, including the Federal and Emirate Governments, wholly Government-owned companies, businesses involved in UAE natural resource extraction, Public Benefit Entities, Investment Funds, pension or social security funds, and certain UAE juridical persons wholly owned by exempted entities.
Benefits of Corporate Tax Planning Services in UAE
The benefits of Corporate Tax Planning Services in UAE are as follows:
1. Mitigate tax risks effectively
Tax planning services can help identify and mitigate potential risks by analysing your financial situation and understanding tax laws, make sure your business operates within legal boundaries.
2. Optimise your tax burden while complying with legal and regulatory obligations
Through careful planning and strategic tax management, tax planning services can help minimise your tax liabilities while ensuring compliance with all applicable laws and regulations, thus maximising your after-tax profits.
3. Develop strategies for corporate tax transactions
Tax planning services can create customised tax strategies to your business’s unique needs and objectives, whether minimising tax liabilities during mergers and acquisitions or optimising tax structures for international transactions.
4. Submit tax returns with precision and punctuality
With tax preparation and compliance expertise, tax planning services can make sure that your tax returns are accurately prepared and filed on time, helping you avoid penalties and fines associated with lateness or filings.
5. Use long-term tax advantages
Tax planning services can help your business maximise its tax advantages over time by proactively identifying and capitalising on long-term tax-saving opportunities. This can lead to greater financial stability and growth in the future.
Compliance with UAE Corporate Tax Law
It can be difficult to deal with UAE Corporate Tax law, but with the right knowledge and strategies, your business can boom while staying compliant.
Tax Registration and Deregistration
- Assess your tax position and review financial records.
- Consult tax Shuraa Tax professionals for guidance.
Tax Returns and Clarifications
- Submit accurate tax returns to comply with the law.
- Maintain detailed records and make better use of depreciation for tax benefits.
Violations and Penalties
- Invest in proper tax planning strategies to avoid penalties.
- Consider maximising deductions and utilising tax-free zones.
Anti-Abuse Rules
- Stay informed about restrictions on tax planning strategies.
- Work with tax professionals to comply.
Transitional Rules
- Understand transitional rules to adapt to new regulations.
- Stay updated on legislative changes and consult experts for smooth transitions.
Top-notch Corporate Tax Services in Dubai
Regarding reliable and highly skilled tax-related services for companies in Dubai, Shuraa Tax stands out as a trusted name with a proven track record. Backed by a team of trained consultants in tax accountants and consultants, Shuraa Tax offers a wide range of tax-related services for corporations, including:
- Tax Planning and Compliance: Customized tax planning strategies to optimise tax outcomes while ensuring compliance with UAE tax regulations.
- VAT Advice and Compliance: Expert guidance on VAT implications, including compliance requirements and effective VAT management for businesses.
- Tax Audit Assistance: Professional support and representation during tax audits, maintaining seamless communication with tax authorities and providing thorough responses to audit-related inquiries.
What services does Shuraa Tax provide?
There are many services provided by Shuraa Tax:
- Accounting and Bookkeeping: Outsource your accounting and bookkeeping requirements to Shuraa Tax. We ensure compliance with the International Financial Reporting Standards and UAE regulations.
- VAT Consultancy Services: UAE businesses have been required to register for VAT since its implementation in 2018. Professionals like Shuraa Tax help with VAT registration, VAT reporting, and other advisory services.
- UAE Corporate Tax: With one of the lowest tax rates in the world, entrepreneurs in the UAE can benefit from services like corporate tax registration, filing and consultancy.
- Excise Tax Services: Entities involved in the trade, import, export, stockpiling, or production of goods that fall under the excise category must mandatorily register for and comply with Excise tax laws.
- ESR Services: Businesses belonging to certain sectors must be compliant with the Economic Substance Regulations (ESR), including ESR notification filing.
- Add-On Services: Shuraa Tax Consultants offers several add-on services, such as tax agency, payroll services, MIS reporting, compliance review, and more.
Seek expert guidance from top corporate tax consultants in Dubai
Dubai tax consultants’ services are key for achieving business objectives. Shuraa Tax can assist businesses in guaranteeing compliance with constantly developing regulations, financial capabilities, and strategic plans for sustained long-term success.
As your business is in Dubai’s intricate corporate tax, partnering with a Tax consultant and professional tax advisor is an important step towards continued growth and financial well-being. Don’t hesitate to contact us today to access premier business marketing services; we are here to support you every step of the way. Get in touch today at +971508912062. You can also email us at info@shuraatax.com.
FAQs
Q1. What advantages does corporate tax planning offer in Dubai?
Discover customised tax efficiency and saving tactics suited to your business requirements.
Q2. How does corporate tax planning benefit my Dubai-based business?
Corporate tax planning can streamline your tax framework and reduce tax burdens effectively.
Q3. Why is corporate tax planning important in Dubai?
It’s vital to adhere to tax laws and make more profits via efficient tax planning strategies.
