Simplifying your taxes!

You have to pay TAX in UAE now!

Federal Tax Authority introduced Corporate tax from 01 June 2023 onwards

VAT

It is a tax levied on purchases made by you and it is recovered from the seller.

International tax

It is the tax paid by UAE Companies in foreign countries. You can claim credit of the taxes paid outside UAE while paying taxes in UAE

Corporate Tax

Tax that is being levied on profits earned by the companies in UAE. The government has proposed to charge tax with effect from 01 June 2023 on UAE Companies.

Withholding Taxes

These are the taxes withheld at the time of payment being made to you. You can claim the credit of the taxes while you make payment to the FTA.

You are exposed to following taxes in UAE now:

Corporate tax in UAE

The UAE does not levy income tax on individuals. However, it levies corporate tax on oil companies and foreign banks. In January 2022, Ministry of Finance announced that it will introduce federal Corporate tax (CT) on the net profits of businesses. The tax will become applicable either on 1 July 2023 or on 1 January 2024, depending on the financial year followed by the business. CT will be applied across all the emirates.

As per Ministry of Finance, CT rates are:

• 0 per cent for taxable income up to AED 375,000

• 9 per cent for taxable income above AED 375,000 and

• a different tax rate (not yet specified) for large multinationals that meet specific criteria set with reference to 'Pillar two' of the OECD Base Erosion and Profit Shifting Project.

VAT in UAE

Value Added Tax or VAT is a tax on the consumption or use of goods and services. A VAT of 5 per cent is levied at the point of sale. Businesses collect and account for the tax on behalf of the government.

Transfer Pricing in UAE

When a business transact with any of its related business, the laws of the country requires them to justify the correctness of profit claimed by them in any specific country. This is to check whether the business is avoiding taxes by shifting its profit to related businesses in other countries having lower rate of tax.

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