At Business One Tax and Accounting, we recognize that tax compliance in the United Arab Emirates (UAE) is not just a legal requirement but a strategic imperative for businesses. Our comprehensive suite of tax services is designed to simplify the complex world of tax for businesses of all sizes and industries operating in the UAE.
Given the recent implementation of the UAE’s new corporate tax legislation, numerous businesses are encountering unfamiliar procedures and regulations. Our proficient team of tax specialists is here to provide assistance in determining the applicability of corporate tax to your company, optimizing available exemptions and reliefs, and ensuring timely compliance with all obligations to prevent any penalties.
From assisting you with the registration process for corporate tax to guiding you through the corporate tax submission, our team is fully prepared to support you at every stage, ensuring a seamless and efficient experience.
First steps of preparing for corporate tax:
Determine Tax Residency
Understand the criteria for tax residency in the UAE. Entities may be considered tax resident if they are incorporated in the UAE or if the management and control of their business are carried out within the country.
Determine if you would prefer to register as a group
To establish a Tax Group in the United Arab Emirates (UAE), certain conditions must be met. Both the parent company and its subsidiaries must be resident juridical entities, have the same Financial Year, and follow identical accounting standards for preparing financial statements. Additionally, for the parent company to form a Tax Group, it should fulfil the following criteria: own at least 95% of the subsidiary’s share capital, hold at least 95% of the subsidiary’s voting rights, and be entitled to at least 95% of the subsidiary’s profits and net assets. These ownership, rights, and entitlements can be held directly or indirectly through subsidiaries. However, it’s important to note that an Exempt Person or Qualifying Free Zone Person cannot be part of a Tax Group.
Register for Tax
If your company is subject to corporate tax in the UAE, you must register with the Federal Tax Authority (FTA). Even though you have registered for VAT, it is mandatory to register for corporate tax.
Maintain Proper Accounting Records:
Ensure that your company maintains accurate and up-to-date accounting records. These records will be essential for calculating and reporting tax liabilities.
Comply with Reporting Requirements:
Be aware of any additional reporting requirements, such as transfer pricing documentation, that might apply to your company’s transactions with related parties.
Once we have complied with the above steps, our further steps will be to:
Determine Taxable Income
Familiarize yourself with the UAE’s corporate tax rules and regulations to determine your company’s taxable income correctly. Deductible expenses and allowances may be applicable, so understanding the tax laws is essential.
Calculate Corporate Tax
Based on the taxable income and the applicable tax rate, calculate the corporate tax liability. As of my last update, the standard corporate tax rate in the UAE was 0% for most companies, but certain sectors might be subject to specific tax rates.
File Tax Returns
If your company is liable for corporate tax, you must file tax returns with the FTA. The tax return filing frequency and deadlines may vary based on the company’s financial year, but it is typically done annually.
Pay Corporate Tax
If there is a tax liability after filing the tax returns, ensure that the tax payment is made within the specified deadline. Penalties and interest may apply for late payments.
UAE introduced Value Added Tax (VAT) on January 1, 2018, marking a significant shift in the country’s fiscal landscape. VAT in the UAE is governed by federal laws and regulations, and its implementation is overseen by the Federal Tax Authority (FTA). With a standard VAT rate of 5%, it is relatively low compared to global standards, but its impact on businesses and consumers is significant.
Our comprehensive suite of VAT services is designed to simplify the complex world of VAT for businesses of all sizes and industries operating in the UAE.
VAT Registration and Compliance
Our experts guide you through the VAT registration process, ensuring you meet all the requirements set by the Federal Tax Authority (FTA). We help you determine when registration is mandatory, assist in completing the registration application, and ensure that your business adheres to all ongoing VAT compliance obligations.
VAT Advisory and Planning
Understanding the intricacies of VAT in the UAE is essential for minimizing liabilities and optimizing your financial strategies. Our seasoned VAT advisors provide tailored solutions for your specific industry and business needs. We offer comprehensive VAT planning services to help you make informed decisions that align with your financial goals.
VAT Record Keeping and Reporting
Accurate record-keeping is at the core of VAT compliance. We help you establish efficient systems for recording Input VAT and Output VAT, ensuring that your VAT returns are accurate and filed on time. Our team manages your VAT reporting, so you can focus on your core business activities.
VAT Audits and Support
In the event of a VAT audit by the FTA, we provide full support to ensure a seamless process. Our experts work closely with tax authorities on your behalf, leveraging our expertise to navigate the audit efficiently and demonstrate compliance.
Sector-Specific VAT Services
Different sectors may face unique VAT challenges. We offer specialized VAT services tailored to your industry, whether you operate in retail, manufacturing, services, or any other sector. Our industry-specific knowledge ensures that your VAT strategy aligns with sector regulations.
Comprehensive VAT Training
Equip your team with the knowledge and skills needed for VAT compliance. We offer comprehensive VAT training programs, covering all aspects of UAE VAT, from basics to advanced topics.
VAT Filing Made Easy
Navigating the intricacies of VAT filing can be a daunting task for businesses in the UAE. At Business One Tax and Accounting, we simplify the process for you. Our dedicated team manages your VAT filing, ensuring that all necessary documentation and data are accurately compiled and submitted to the Federal Tax Authority (FTA) in a timely manner.
We understand the significance of adhering to VAT filing deadlines and the importance of accurate reporting. By entrusting us with your VAT filing requirements, you gain peace of mind knowing that you’re in compliance with all VAT regulations. Our systematic approach and attention to detail ensure that your VAT returns are prepared efficiently and correctly, reducing the risk of penalties or fines.
Our commitment is to simplify tax complexities for your business, ensuring compliance and financial optimization. We’re your partners in tax, providing the expertise and support you need to thrive in this evolving tax landscape. Contact us today for FREE consultation.