Overview
UAE Corporate Tax Compliance Advisory services have become essential as the UAE implements a new corporate tax regime to align with international standards and enhance its global competitiveness.
Effective from June 2023, this framework requires businesses operating in the UAE to comply with tax reporting, payment, and regulatory obligations.
At YNI Consultants, we help businesses seamlessly adapt to the new system, ensuring accurate compliance and strategic tax optimization.
Key Aspects of UAE Corporate Tax Law
Corporate Tax Rate
- 9% on taxable income exceeding AED 375,000.
- 0% tax on taxable income up to AED 375,000 to support SMEs and startups.
Scope of the Tax
- Applies to mainland and free zone businesses (unless exempt).
- Includes LLCs, branches of foreign companies, and partnerships.
- Certain sectors (e.g., oil & gas) may follow special regimes.
Exemptions and Special Regimes
- Free Zone Exemption: Preferential tax treatment may apply depending on activity and substance.
- Qualifying Income: Income such as dividends and capital gains may be exempt.
Transfer Pricing Rules
- Aligned with OECD guidelines.
- Intercompany transactions must meet the arm’s length principle.
Filing and Reporting Requirements
- Tax Returns: Annual filing required with complete taxable income reporting.
- Financial Statements: Must be properly maintained and IFRS-compliant.
- Tax Audits: Subject to inspection and potential penalties for non-compliance.
VAT and Other Taxes
- VAT remains at 5%, and businesses must ensure compliance with both VAT and corporate tax regulations.
Key Considerations for Businesses
- Tax Planning: Optimize liability while complying with laws through strategic structuring.
- Transfer Pricing Compliance: Essential for businesses with cross-border or related-party transactions.
- Managing Tax Risks: Proactively identify and mitigate potential exposures.
- Digital Tax Solutions: Ensure readiness for digital submissions and real-time filings.
- Ongoing Regulatory Updates: Monitor updates as UAE tax policies evolve.
- Advisory Services: Leverage expert guidance to navigate new compliance requirements.
Compliance Challenges and How Advisory Services Help
- Complexity of New Regulations: Expert advisors simplify compliance through customized guidance.
- Penalties for Non-Compliance: Avoid hefty fines with professional support in filing and payment deadlines.
- Industry-Specific Considerations: Tailored strategies for sectors like tech, construction, or finance ensure optimal compliance.
Conclusion
The UAE’s corporate tax law is a transformative development in the region’s business landscape.
While it presents opportunities, it also demands vigilance and precision in compliance.
At YNI Consultants, we help you understand and navigate this change, ensuring accurate reporting, risk mitigation, and tax efficiency.
