Corporate Tax Law Latest Update 2023
Ministerial Decision No. 114 of 2023 on the Accounting Standards and Methods for the Purposes of Federal Decree Law No. 47 of 2022 on the Taxation of Corporations and Businesses
Ministerial Decision No. 114 of 2023 on the Accounting Standards and Methods for the purposes of corporate tax stipulates that a Taxable Person shall apply the International Financial Reporting Standards (“IFRS”), if the Taxable Person derive Revenue that does not exceed AED 50,000,000 (fifty million United Arab Emirates dirhams) for small and medium-sized entities
Whereas, Financial Statements refers to an entire set of statements as specified under the Accounting Standards applied by the Taxable Person, which include and is not limited to statement of income, statement of other comprehensive income, balance sheet, statement of changes in equity and cash flow statement.
Dubai Corporate Income Tax
Hiring an individual and corporate tax accountant in UAE is the best way to go if you are dealing with corporate tax in UAE and tax registration for individual person in UAE. However, If you’re confused with your taxes, or you’ve already been juggling a lot of things on top of your tax responsibilities, then it is an excellent idea to ask the professionals in Farahat & Co to guide you.
In an attempt in saving money or understanding your finances finally. You may also think that it is a good idea for you to do your own taxes.
However, as you make this important leap, you’ve failed to take into account accounting and tax jargon along with the confusing taxation rules in the country plus the recent changes. however, which most definitely take you into a loop!
Before you find yourself getting overwhelmed with the preparation and filing of your tax returns, consider asking us for advice.
In the UAE, we are the go-to specialists of countless entrepreneurs and corporations. As we also help them deal with all matters associated with tax in UAE. Yes, this also includes the individual vat registration process UAE. Here are a list of activities and industries that we’ve helped including essential information you have to know regarding UAE tax:
- Oil and gas – companies that operate in the industry of oil and gas are subject to tax rates that have been negotiated with the authorities. Also, Agreements can reach up to fifty five percent tax.
- Banking and finance – majority of the emirates in UAE such as Abu Dhabi, Dubai and Sharjah have specific regulations for banking tax. Also, Income of foreign bank branches are subject to twenty percent income tax. Take note: entitles that established in free zones in UAE guaranteed tax holidays up to fifty years and renewable.
- Corporate tax - there is no tax that is levied by local tax authorities on the wealth or income of companies except for foreign banks and oil and gas corporations. Corporate income tax UAE is subject to change which is why it is best to consult with our team for more information.
- Withholding tax – as for now, there are no withholding taxes in UAE.
- Customs duties – five percent customs duty is imposed on freight value, insurance, and cost of imports. There are other rates that can apply to specific kinds of products like tobacco products and alcohol with certain exceptions for other items. Goods which are imported and also for re-export purposes can benefit from discounts or exceptions from customs duties similar to manufacturers on import of raw materials, spare parts, and machinery which are utilized for industrial purposes. As of the moment, there are no excise taxes that are levied separate in UAE.
- Personal or individual income tax in UAE – personal income tax is inexistent in UAE as of the moment. Take note: freelancers and social media influencers are considered as business entities in the eyes of the law.
- Value Added Tax – while there is no corporate tax in Dubai or corporate income tax UAE, VAT in UAE is applicable to certain goods and services supplied by business entities in the country. There is a five percent VAT that is imposed on products and services with limited exceptions on basic food items, education, and healthcare.
Tax Services in UAE
We are specialists that businesses and individuals run to for taxation matters. However, here’s how we can help you:
- FTA Investigations and inquiries – being investigated or inquired by the Federal Tax Authority in UAE can be very worrying and stressful. Also, with our team of tax specialists’ wealth of experience with regards to dealing with FTA investigations. We will also be able to provide you with the help and support that you need.
- Business tax planning – those who are subject to tax in UAE require expert advice and support, most especially when optimizing their tax position. Our team will provide you with advice all year round in order to help you deal with your taxes.
- Assessment - with taxes come a lot of compliance requirements which have to be met. We've been able to guide our clients with our practical advice on planning opportunities that are available to them. It is possible for the FTA to increase fines and penalties for failure of filing returns on time, as well as for errors. Let us help you complete your tax returns, advice you on the ways you can make payments, and assist you in calculating your tax liabilities.
Taxation in UAE is made simpler with the help of a team that is comprised of reliable and seasoned tax consultants in Dubai. We have teams across the country and the GCC in order to help as much people as we possibly can. Call us today if you wish to speak to our experts!