Corporate and business tax

What is corporate tax in the UAE? It is a federal tax that will be imposed on the taxable income of companies at a rate of 9% if this income exceeds 375,000 UAE dirhams. As for income less than this amount, it will be subject to a rate, and the Federal Tax Authority is responsible for managing, collecting, and enforcing this law and related provisions. The corporate tax consultants in our office will help you deal with the new corporate income tax law and provide advice that helps you comply with the corporate law and avoid the legal consequences of violating the law, according to Federal Decree Law No. (47) of 2022.The following entities will be subject to the corporate tax law: companies and legal persons residing in the country: These include businesses that are established in the country and/or are effectively managed and controlled in the country. Including businesses established in free zones, but if the entity in the free zone meets certain conditions, it can be considered a qualified entity to benefit from 0% of its qualifying income (natural persons who practice business in the country (the details will be determined later based on a decision issued by the Council Ministers) Foreign legal entities that have a permanent establishment in the country How do I know that I must register for corporate tax? If your company’s income exceeds 375,000 UAE dirhams – It is the minimum set by the Corporate Tax Law – You must register for corporate tax in the United Arab Emirates How to calculate corporate tax in the United Arab Emirates Corporate tax was introduced within the new tax legislation pursuant to Federal Decree Law No. (47) of 2022 regarding… Corporate tax: Under this decree, companies and businesses will be subject to a federal tax that begins to apply from the start date of the company’s fiscal year on or after June 1, 2023.
As follows: Income subject to corporate tax: The tax is imposed on the taxable income that a person achieves during a certain tax period. In general, the tax will be imposed on an annual basis, as the corporate tax liability will be calculated by the taxable person through self-assessment. The mechanism for forming tax groups and when they can be formed. For corporate and business tax purposes, two or more taxable persons may apply to form a tax group subject to meeting certain conditions, such as that the parent company and its subsidiaries have resident legal persons. How is taxable income calculated for a tax group? In the case of a group, it must Tax: The parent company must prepare consolidated financial accounts covering each member company of the tax group for the relevant tax period, as current transactions between the parent company and each member of the group are excluded. Registration and tax return are required. All taxable persons, including persons based in the free zone, must Registration for corporate and business tax with the Federal Tax Authority, and through this tax registration they obtain their own tax number, as well as The Federal Tax Authority may require certain exempt persons to register for corporate tax. A corporate tax return for each tax period must be submitted within nine months from the end of the relevant tax period, and the same period is applied to pay any corporate tax due for the tax period for which a tax return was submitted.

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