The United Arab Emirates (UAE) introduced a new corporate tax regime effective in June 2023. This page aims to clarify the key aspects of UAE Corporate Tax for businesses operating in the UAE.

Understanding UAE Corporate Tax

The UAE implemented a corporate tax system with a low headline rate, further solidifying its position as a global business hub. Here’s a breakdown of the key points to understand:

• Tax Rates:
  
  • 0%: Businesses with a taxable income of AED 375,000 (approx. USD 102,000) or less are subject to a 0% corporate tax rate.
  • 9%: Businesses with taxable income exceeding AED 375,000 are taxed at a standard rate of 9%.
  • Separate Regime: Multinational Enterprises (MNEs) meeting specific criteria under the OECD’s Base Erosion and Profit Shifting (BEPS) Project Pillar Two will be subject to a different tax rate yet to be specified.
• Applicability: The UAE Corporate Tax applies to all businesses carrying on commercial or professional activities in the UAE, except for those operating exclusively in free zones with a valid no corporate tax incentive.

Who Needs to Register for UAE Corporate Tax?

• Businesses with a taxable income exceeding AED 375,000 in a financial year are required to register for Corporate Tax.
• Businesses with a taxable income below the threshold but expecting to exceed it in the future should also register proactively.
• Registration can be done electronically through the Ministry of Finance (MoF) website.

What are Taxable Profits?

Taxable profits are calculated based on a business’s accounting profits with certain adjustments as per the UAE Corporate Tax regulations. These adjustments may include adding back non-deductible expenses and subtracting exempt income.

Key Considerations for Businesses

• Record Keeping: Businesses must maintain proper accounting records and financial statements for a minimum of five years for tax purposes.
• Transfer Pricing: Transactions between related parties should be conducted at arm’s length to avoid potential tax adjustments.
• Tax Compliance: Businesses are responsible for filing accurate tax returns and paying their due taxes on time. Penalties can be imposed for non-compliance.
• Tax Planning Opportunities: Understanding the UAE Corporate Tax framework can help businesses identify tax planning opportunities to optimize their tax liabilities.

How Can Plan B Consultancy Help?

Plan B Consultancy offers a comprehensive suite of services to assist businesses with UAE Corporate Tax:

• Tax Registration and Deregistration: We guide you through the entire registration process and ensure all requirements are met. We can also handle deregistration if applicable.
• Tax Compliance Services: Our team of tax professionals can help you prepare and file accurate tax returns, calculate taxable profits, and ensure adherence to tax regulations.
• Tax Planning and Advisory: We can provide strategic tax advice to help you minimize your corporate tax liability while remaining compliant.
• Transfer Pricing Assistance: We can assist you in developing and implementing arm’s length transfer pricing policies.
• Representation before Tax Authorities: In case of inquiries or audits from the MoF, Plan B’s experienced professionals can represent you and ensure your voice is heard.

Don’t Navigate UAE Corporate Tax Alone!

Plan B Consultancy can be your trusted partner in navigating the new UAE Corporate Tax regime. Contact us today for a free consultation to discuss your specific business needs and ensure smooth compliance with UAE Corporate Tax regulations.