MAF / Farhat Office & Co has been terrific in making sure that everything was done properly, smoothly and timely and I received my trading license and visa well ahead.
Fabrizio Balestrini
MD | Mistral Consulting DWC LLC.
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With over 40 years of progressive experience, Tax Consultant Dubai(TCD) has emerged as an accredited and premier tax consultant in UAE. Our business tax advisors team is determined to furnish customized and holistic tax solutions, offering expert corporate tax advisory services that meet our clients’ distinct needs.
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Why Choose Us?
Business tax is a group of different taxes that businesses may have to pay based on their legal structure, size, and actions. The UAE's business tax system is made up of these taxes, which tell companies how to pay taxes on their income, sales, and some goods.
The Federal Tax Authority (FTA) has rules about how to register, file, and pay all kinds of business taxes. It also makes sure that the law is followed.
Corporate Tax UAE
A corporate tax is a tax on the profits that a business makes. It affects most businesses in the UAE as well as some foreign companies with a financial presence in the UAE. The tax is based on the net profit after taking into account the legal income and costs of the business in the UAE.
VAT in the UAE
Value-Added Tax, or VAT, is a tax that is added to most goods and services at every step of the supply chain. Businesses that meet the requirements must sign up for VAT, charge VAT on goods and services that are taxable, and send in VAT reports. Customers pay VAT and send it to the government. It's not a tax on profits, though.
Withholding Tax
Withholding Tax can be classified as the business tax, but the UAE does not usually withhold tax on outgoing payments to non-resident clients. Understanding this is still important for businesses as some cross-border deals and future changes to the law could add or require withholding-style duties in some situations.
Excise Taxes in the UAE
Certain things that are thought to be bad for health or the environment are subject to an excise tax. These include tobacco products, energy drinks, and some sugary drinks. It is usually added to the price of these items and is charged at higher rates.
When put together, these are the main types of business taxes in the UAE. They set the rules for how companies are taxed and how they must follow FTA rules.
UAE Corporate Tax Fundamentals
Corporate tax in the UAE is a federal tax on the money your business makes from its work, according to Federal Decree-Law No. 47 of 2022. It has an effect on most businesses on the mainland, free zones, and some foreign companies that either have a permanent presence or income in UAE.
Here are the corporate tax rate UAE.
- No taxes on income up to AED 375 000
- 9% on income over AED 375,000.
There are special rules that apply to individuals who qualify for free zones and to big multinational companies (as long as they pay the minimum amount of taxes).
Who has to follow the Corporate Tax law in the UAE?
Companies based in the UAE, some natural persons who run a business, and non-residents who have a permanent establishment in the UAE or certain income that comes from the UAE are all "taxable persons" under the UAE's corporate tax law. Some things, like qualifying extractive and non-extractive natural resource businesses, can be exempt if they are following certain rules.
Register for Corporate tax UAE
Most businesses subject to this law must complete corporate tax registration UAE with the Federal Tax Authority (FTA) through the EmaraTax portal in order to get a Tax Registration Number (TRN). The due date is based on the date of the trade license.
Corporate tax filing UAE
For a financial year starting on or after June 1, 2023, a business must file an online corporate tax return once a year after it has been registered.
The return shows how much tax you need to pay by the due date, your taxable income, your accounting profit, and any tax adjustments. Good bookkeeping, financial statements that follow the rules, and proof of income and expenses are needed to back up corporate tax returns and answer any FTA questions.
VAT & Tax Compliance
For most goods and services, you have to charge, record, and report Value Added Tax at the standard rate of 5%. It applies to business that go over the required or voluntary registration thresholds and helps them avoid fines, lawsuits, and cash flow surprises.
VAT registration UAE
VAT becomes mandatory if your sales go over the FTA threshold within the12 months. You can apply for VAT oniine and get a Tax Registration Number (TRN) with the Federal Tax Authority (FTA). It is required for many businesses in the mainland and in free zones need it, even small ones that are growing.
VAT accounting UAE
- Keep track of VAT on all sales, purchases, imports, and costs in a consistent way.
- Tax bills, contracts, and other important papers should be kept for as long as the law requires.
- Input VAT (on costs) and output VAT (on sales) must be tracked using the right accounting software.
Filing a VAT return UAE
Every three months (or once a month for some businesses), sending in VAT returns electronically. Show how much VAT was collected from customers and how much VAT was paid on business costs that qualify. Make sure you pay any VAT that's due by the due date to avoid fines, interest, and issues with following the rules.
VAT services UAE
- Get help with signing up, getting your VAT health checked, and making up for missed deadlines.
- Help coming up with ways to make sure that contracts, prices, and billing all follow VAT rules.
- Regular help with filling out and reviewing VAT returns and handling FTA questions or audits
Excise Tax In UAE
Excise tax in the UAE is a special tax on things that are bad for the environment or people's health. Because it's federal tax money, the Federal Tax Authority (FTA) is in charge of it. Goods are only subject to excise tax once, usually when they are brought into the UAE, produced or made available for people to use.
What does excise duty in the UAE cover?
Within the UAE, excise tax is currently put on:
- All Tobacco and tobacco products
- All electronic cigarette and liquid
- All energy drink
- Carbonated drinks and drinks with added sugar are 50% off
It's a way for the government to get money for public services and get people to use less unhealthy things.
Sign up for UAE Excise Tax
- Companies that bring in, make, store, or watch over goods that are subject to excise tax in the UAE must first complete excise tax registration UAE.
- The FTA's EmaraTax portal lets you sign up online. You will have to give details about your business license, excise goods, warehouses, and customs data.
- The business gets an excise tax registration number once it is approved, and it has to keep up with all ongoing the rules.
Excise Tax Filing UAE & Compliance
When you pay the excise tax in the UAE, it means:
- File regular excise tax returns through the FTA e-services portal, usually once a month.
- Telling the government how much and what kind of excise goods are brought in, made, or released, and figuring out the tax based on the rates that apply.
- With the return, you must also pay the excise tax, and for each filing, you must keep full records of all inventory, invoices, and customs documents.
Expert Excise Tax Services in the UAE
Excise tax services can help businesses in the UAE do the following:
- Check to see the goods are subject to excise rules and if so, how much is the rate
- Put in place internal controls, sign up for excise tax, and make sure that your warehouse and stocking systems follow excise rules.
- File and review excise tax returns, fix past mistakes, and respond to FTA audits or reviews. This makes it less likely that you will get fined or have your business interrupted.
Business Tax Registration & Filing
Making sure your UAE tax registration is correct is the first thing you need to do to stay in line and avoid getting fined. Every business that is subject to the Federal Tax Authority (FTA) must sign up for the right taxes and then file their returns on time through the FTA site.
What you might need to sign up for
- If a company or person running a business in the UAE follows the rules and makes a profit over 375,000, they can sign up for corporate tax.
- If your businesses that go over the VAT registration limit, you need to register for VAT either voluntarily or using VAT registration services.
- Excise tax registration is needed if you deal in excise goods. People who import, make, or store excise goods usually need to do this.
Sign up for the FTA portal
- The FTA's online system, EmaraTax, is used by everyone to sign up and file their taxes.
- Each business needs its own account and tax identification number(s) in order to pay the taxes that are due.
- After you sign up, you need to keep good records and paperwork for a few years.
Business tax filling UAE
- Corporation tax: a single return is usually due once a year, which shows the taxable profit and the tax amount that needs to be paid.
- VAT: Usually every three or four months, you have to fill out a VAT return that shows the VAT you paid on goods and services.
- Excise: When neeed Regular reports that show how many excise goods were sold and how much tax was paid on them when asked.
You may not have to pay late fees or make changes later if you get help from a professional when you file and register.
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Seeking professional tax guidance in the UAE? Our team of experienced tax consultants offers comprehensive corporate tax advisory service and business tax consultancy services, designed to ensure compliance, reduce liabilities, and optimize your company’s tax strategy. With over 30 years of experience, we’ll ensure you always get the best service.
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