Implementation of Corporate Tax in the UAE

From June 1, 2023, Businesses acquiring a taxable income of 37500 AED have to implement Corporate Tax in the UAE and comply with the UAE CT tax regime. Be prepared with the appropriate documents required to register for corporate tax. A 9% corporate tax is to be subjected for every taxable person, and it is recommended to get the best Tax guidance from the tax agents in UAE. 

BMS Auditing, being the best tax consultancy service provider, can guide you through the pre and post-implementation of Corporate Tax on the business ensuring complete tax compliance with the top Corporate tax Services in UAE. 

Corporate Tax was introduced by the Ministry of Finance in January 2022. Presently this new policy has not implemented the federal corporate tax scheme. At the Emirate level, the UAE would charge corporate tax only on oil and gas companies and branches of foreign banks. Moreover, the UAE gets various benefits from over 40 free zones, that have their own rules and regulations. It is important to note that no corporate tax is charged on employment-based income. 

Corporate Tax Implementation in UAE

The implementation of corporate tax would require businesses to comply with new tax laws, maintain accurate financial records, and file tax returns with the relevant authorities. It is important for businesses to seek professional advice from tax consultants in Dubai and take the necessary steps implementation of corporate tax in the UAE, including calculating their tax liability, updating their accounting systems, and training their staff on the new tax laws.

Are you ready for UAE Corporate Tax 2023? BMS guides you through the pre and post-implementation of Corporate Tax, with its impact on the business for both the long and short-term, ensuring complete compliance with the Corporate tax. 

The Corporate Tax rate in the UAE is distributed as follows:

• 0% for a profit up to AED 375,000

• 9% for a profit above AED 375,000

How to Prepare for Implementing Corporate Tax in UAE for your Business?

If your business is one of the entities subject to the UAE Corporate tax, there are several steps you can take to prepare for its implementation:

1. Consult with a tax expert: Seek professional advice from a tax consultant or an accounting firm that has experience in UAE taxation laws to understand the implications of the corporate tax on your business and to determine how best to structure your business for tax efficiency.

2. Assess your tax liability: Calculate your business's tax liability for tax based on the corporate tax rate, and ensure that your financial records are accurate and up-to-date.

3. Understand the tax laws: Familiarize yourself with the corporate tax law, including the Corporate tax return filing, deadlines, and any exemptions or deductions that your business may be eligible for.

4. Update your accounting systems: Ensure that your accounting systems and software are capable of handling corporate tax document requirements, including tracking and recording taxable income, preparing tax returns, and generating tax invoices.

5. Train your staff: Train them on the new tax laws and ensure they are familiar with the filing and reporting requirements. There are several firms that offer corporate tax training in UAE to the accountants, auditors, or any professionals who are interested in it.  

6. Plan for cash flow: Consider and assess the impact of the corporate tax on your cash flow and plan accordingly to ensure that your business has sufficient cash reserves to meet its tax obligations.

Steps to implement Corporate Tax UAE

You need to understand the procedure before implementing Corporate Tax. Here are the steps:

• Considering the review of the accounting books and verifying the accuracy of the accounting policies to follow the Corporate Tax liabilities

• Determining the expenses and revenue items of the financial statements for Corporate Tax

• Examining the filing methods or reporting models means choosing a Tax group or a separate Corporate Tax return for every entry, with the  tax benefits from any reporting method

• Identifying the need to restructure the legal and capital structures such as System and technology infrastructure 

• Relevant systems and technology to address the requirements of the Corporate Tax policy

• Wide focus on Transfer pricing with various requirements in transfer pricing documentation, to be taken care of by the flourishing businesses 

How BMS Auditing UAE can help?

The corporate tax in the UAE will change the tax landscape of the UAE Significantly and international groups with businesses in the UAE are advised to evaluate the impact of such development. Our team of specialists at BMS Auditing can assist you in determining the opportunities and difficulties that the implementation of a corporate tax will bring with some of the excellent Corporate Tax services in UAE.

   A. Corporate Tax Advisory services:

• • • Assessing the impact of Corporate Tax on business and applicability thereto

• • • Analysis of the impact of Corporate Tax for Free Zones (including Financial Free Zone) entities

• • • Advise on whether any exemption can be availed

• • • Consultancy on Corporate Tax and how to minimize potential risks

• • • Advise on potential Corporate Tax risk areas and challenges faced by taxpayers

• • • Assistance in restructuring the business model from the Corporate Tax perspective

• • • Guidance on availing Foreign Tax Credits paid by taxpayers in other countries

• • • Advise on withholding taxes.
      
      

   B. Corporate Tax Compliance Services:

• • • Assist in registration for Corporate Tax before the relevant authorities

• • • Analysis of taxable income and payable Corporate Tax in UAE.

• • • Preparation and filing of Corporate tax returns.
      
      

   C. Corporate Tax consultancy services:

• • • Preparing the written submissions to be furnished before tax authorities

• • • assisting in the submission of the response to the notices from the tax authorities 

• • • Filing of written appeal against the adverse tax adjustments made or penalty imposed by the tax authorities

• • • Representing taxpayers in front of tax authorities and appealing on their behalf.

Corporate Tax Implementation Services in UAE

Corporate Tax Services in UAE by BMS help businesses comply with the new tax laws by assessing their tax liability, optimizing their tax structure, updating their accounting systems, and training their staff on the new tax laws. These services may also include ongoing support to ensure continued compliance and address any issues that arise during the tax filing and reporting process.

The expert team at BMS Auditing UAE helps you understand Corporate Tax in detail; its short and long-term impacts on the business as per the nature of the industry. The professional team of BMS is certified in public accountancy with high exposure to VAT, auditing, accounting, and excise tax. Corporate Tax experts help your business comply with the laws and regulations of UAE Corporate Tax through impact analysis consultation services. 

Feel free to approach us for any assistance related to UAE Corporate Tax.