Corporate Taxation Service
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Corporate Taxation Service
The Ministry of Finance has introduced the federal corporate tax of 9% on business profits exceeding AED 375,000 for the financial years beginning on or after 1 June 2023.
Salient features of corporate tax regime are below:
- The corporate tax will apply to all businesses and commercial activities alike, except for the extraction of natural resources which will remain subject to Emirate level corporate taxation.
- Corporate tax will be payable on the profits of UAE businesses as reported in their financial statements prepared in accordance with internationally acceptable accounting standards, with minimal exceptions and adjustments.
- Businesses will only need to file one corporate tax return each financial year and will not be required to make advance tax payments or prepare provisional tax returns.
- Corporate tax regime will have generous loss utilisation rules and will allow UAE groups to be taxed as a single entity or to apply group relief in respect of losses and intragroup transactions and restructurings.
- Related party transfer pricing and documentation requirements will apply to UAE businesses with reference to the OECD Transfer Pricing Guidelines.
- UAE corporate tax regime will continue to honour the corporate tax incentives currently being offered to free zone businesses that comply with all regulatory requirements and that do not conduct business with mainland UAE.
Pertinent matters for your consideration
Being a corporate entity, it is need of an hour to deal with your corporate taxation issues well beforehand to overcome any sort of challenges that will arise with the launch of this regime.
Key matters for your attention are below:
- Existing status of your books of accounts.
- Accounting records accordance with International Financial Reporting Standards.
- Whether to opt for Group registration or standalone registration.
- Impact of corporate taxation on your business operations and cash flows.
- Proactive tax planning to be an efficient tax saver whilst being a legitimate tax payer.
- Documentation requirement for Group/related parties’ transactions.
- Requirements to maintain compliances with corporate tax law and regulations.
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Being FTA approved tax agents, we have wide array of satisfied clients who have benefited from our advices on VAT related matters. We have consortium of clients for whom we have ensured law compliances in terms of:
- Accurate tax invoicing
- Timely VAT Returns filing, and
- Correct calculation of VAT liability
Our valuable advices for clients have helped them to save taxes where it was not required to be paid, but clients were not familiar with regulations, resulting in bearing undue tax burden.
Gaining leverage of our prior UAE VAT experience and international exposure to Corporate taxation, we have in-built capacity through our qualified and experienced professionals to handle your Corporate Taxation matters. We have a set of specialised skills and knowledge about international standards of Corporate Taxation. Our application of knowledge will help you to make quick decisions and develop good routines to comply with corporate tax regulations.
We shall undertake comprehensive tax planning and offer advice on complex issues including Group level corporate tax strategy, transfer pricing, loss utilisation, foreign tax credits and other pertinent issues to ensure optimum corporate tax planning and compliances.
Corporate tax advisory
With effect from the 01 June 2023, the UAE government shall impose Corporate tax on business profits, excluding those with profits less than AED 375,000.
Virtually every business needs the management of their corporate tax matters. Improper dealing with pertinent issues can cause unnecessary costs and penalties for your business.
Since all the corporate taxation handling related expertise may not be available to you in-house, it is critical that you partner with a qualified and experienced Tax Advisors approved by FTA, who can guide you on all related matters.
How can we support you?
Being reliable corporate tax accountant & advisors, we assist the companies to deal with the issues on tax matters by:
- Keeping upto date on the latest updates in the law and therefore can assist a company in avoiding legal compulsion by ensuring timely compliance with provisions of the law.
- Conducting comprehensive tax planning and offer advice on complex issues that could result in legitimate tax savings.
- Liaison with tax authorities to resolve communication barriers and coordination issues.
- Maintaining compliances with relevant laws and regulations to avoid penalties.
- Combining our understanding of the business insights and comprehensive tax knowledge to assist our clients with their tax management.
- Handling industry-specific issues with precise guidance to comply with the law. Our advisory covers specific consideration for entities located in free zone and designated free zone.
- Conducting health checks by reviewing the internal controls and procedures, including a review of documentation to maintain law compliances.
- Rendering retainer-ship services include on-going advisory, updates, assistance in compliance, etc. We assist through calls and meetings when necessary. We formulate complete solutions and prepare recommendations to provide tax advice for our clients.
- Training in-house personnel of companies to keep up to date with the related developments.
Corporate Tax Implementation Service
Corporate tax is levied on business profits. Given that, it has an impact on cash flows and hence can effect profitability if not properly managed. Staff should be well trained staff, re-defining documentation requirement and accounting & operational software are needed to be enhanced and tailored to ensure corporate tax compliance.
We believe that proper guidance should be there for businesses to implement Corporate Taxation and to develop a sustainable tax strategy.
Key considerations for Corporate Tax implementation include the following areas:
- Evaluation of existing business models, transactions and processes to understand the impact on financial (margins, pricing, cash flows), operational (supply chains/processes, transaction flows), and legal (contract, business structures) aspects of the business.
- Once the evaluation is performed, then the procedures are to put in place for seamless and accurate corporate tax reporting and compliance. Commitment from senior management and building a structured and uniform approach are the key factors to facilitate corporate income tax implementation.
How can we support you?
We have developed a comprehensive approach to assist our clients in meeting their Corporate Tax obligations in an efficient and effective manner.
Our experts assist in implementing Corporate Taxation by:
- Impact analysis of Corporate Tax on your business.
- Advising on managing the legitimate tax savings.
- Advising on documentation and accounting & financial reporting changes to comply with Corporate Tax regulations.
- Propose an accounting system and operations for Corporate Tax reporting purpose.
- Data migration and system change implementation for Corporate Tax application.