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How Can You Reduce Company Tax in UAE?

For taxable persons to reduce their corporate tax liability in the UAE, they must ensure compliance with the relevant tax regulations and standards. There are a number of ways that businesses can use to reduce their company tax burden, this includes utilizing deductions, depreciating assets, or using tax-efficient structures. Therefore, it is imperative for taxable persons to seek the expert services of top tax consultants in UAE to avail tax deductions and to stay compliant with the Federal Tax regulations and standards to which noncompliance accrues hefty fines.  

1. Maximize Deductions

To avail of tax reductions, it is imperative to understand the types of deductions or credits that are applicable to respective taxable persons. Tax deductions include those related to local and regional taxes, energy costs, employee salaries and benefits, and advertising expenses. It’s important to note that the UAE does not allow for any deductions related to interest payments or charitable donations. 

2. Seek the Expert Services of an Accountant

An experienced tax accountant can help taxable persons to understand the applicable tax deductions to business conduct and how to maximize them in compliance with local regulations. UAE tax experts assist to give advice on setting up a corporate structure that benefits corporations from double taxation agreements, as well as advice on other tax-saving strategies such as taking advantage of certain thresholds or reducing taxable income with various methods like stock options or incentives.

3. Record Keeping

Effective record-keeping is an essential facet of tax reduction. It is essential for taxable persons to keep and maintain all relevant documents, receipts, and invoices in a secure place that is easily accessible. This assists taxable persons to stay organized and better understanding the tax implications of business activities.

4. Improve the Business Structure

There are various legal ways to lower corporate taxes by choosing different corporate structures or setting up offshore entities in countries with lower tax rates. A good accountant can help you explore these options and decide which one is best for your business needs.

5. Evade Consequences from late payments

Unpaid taxes or late payments can result in fines and other consequences; thus taxable persons should meet all payment deadlines as required by law. Additionally, it is advisable to take insurance on unpaid taxes, as this can help you protect your business finances in case of unforeseen events.

6. Tax advantages should be carefully chosen

Essentially, taxable persons should weigh up all relevant options before making a decision. Some benefits may offer short-term relief but end up costing more in the long run. An experienced accountant or financial advisor can help you evaluate the pros and cons of different strategies so that you can make an informed choice.

Seek the Services of Tax Consultants in UAE

It is imperative for taxable persons to seek the expert services of tax consultants in UAE to avail of tax deductions and to stay compliant with the Federal Tax regulations and standards to which noncompliance accrues hefty fines. Thus, contact us today and we shall be glad to assist you.  

Read More: How to Reduce Your Small Business Tax Burden

Ervee is a CPA with international experience in Tax and Accounting. He has over 12 years of experience in accounting and bookkeeping and over a year in VAT implementation, registration, and accounting in UAE. He regularly drives out inefficiencies in company operations and loves the challenge of helping clients find additional ways for an easier and improved compliance and verification of transactions.