Are you a business person in the UAE?
It is a great idea to be familiar with the UAE corporate tax laws whether you are the owner of a small startup with several employees, the manager of a mid-size company, or the CEO of a multinational company. The UAE has always been noted to uphold commitments to low taxation, but it began implementing corporate taxes from June 1, 2023, hence the need for companies to acquaint themselves with the existing taxes in order to avoid penalties and disruption of their operations.
Apeiron is a professional service company that offers accounting and tax consulting services to companies in the UAE. The overall objective is to help businesses to get the required legal know-how and support to stay in line with the tax requirements and to achieve the best possible tax regime. In this article, we will take you through the basic understanding of the UAE corporate tax laws and how Apeiron supports your business during this new tax regime.
What is UAE corporate tax?
The corporate tax law was adopted by the UAE government when it planned to expand the spectrum of its economy and adopt the international norms of taxation. The new tax regime was introduced to supersede the previous regime, which provided several exemptions to companies.
The key features of the UAE corporate tax are as follows:
- Tax Rate: For companies with income above AED 375,000, they enjoy a flat rate of 9% for their corporate taxes. Companies with a turnover of up to this amount are exempted from corporate tax.
- Corporate Tax Exemptions: Some industries and companies get special treatment to exclude them or to be taxed at lower rates. For example, companies that carry on their business in the UAE free zones may still be allowed to avoid paying taxes, but only if they do not transact with the UAE mainland or engage in activities that are not allowed in the free zone.
- International Compliance: UAE seeks to align with global tax systems and particularly align with the OECD BEPS action plan on base erosion and profit shifting. This new corporate tax law is one of the measures the UAE embraced alongside a global tax overhaul against tax evasion, money laundering, and other unlawful activities.
- Taxable Entities: There is the corporate tax that is applicable on most organizational structures used in the UAE, such as LLCs, JSCs, branches of international companies, and partnership organizations. There are exceptions for persons and other categories also.
The Importance of Corporate Tax Compliance in the UAE
It was established that managing business tax affairs is crucial in corporations’ operations. Given the new tax law, there are basically some pros and cons that can be looked at in relation to businesses.
- Avoiding Penalties and Fines: Non-compliance with corporate tax laws has a lot of repercussions, such as being penalized heavily and fined as well as suspension of operations. It can lead to audits, which, if performed, can produce more foul play in the financial reporting system and more penalties. Delinquent tax filing or filing of wrong returns results in costs and loss of reputation for businesses that ought to file the taxes.
- Tax Planning and Tax Exemption Alternatives: Although the focal point is tax compliance, it is possible to speak about choice options among tax rates as well. Tax advice, learning about tax reliefs, and using the correct allowable expenses can minimize the taxes your business needs to pay. This helps your business to use available resources in the most optimal way and focus on the matters of growth and expansion. Apeiron assists the companies in managing their taxes and finding out the current exemptions and deductions that can be taken with legal compliance.
- Access to Global Markets: This has made the UAE have a good stand in the international market as it has complied with the international tax policies. Adherence to corporate taxation standards helps your company adhere to legal stipulations of various countries, therefore increasing its reputation among the global markets, hence enabling it to engage in cross-border transactions, contracts, and global expansion.
- Strategic Business Planning: Corporate tax compliance is one of the important strategic management processes at the management planning stage. Knowing your tax liabilities helps you to predict your business costs, redesign your prices, and make necessary planning for expansion. In the long term, as a business entity, a good tax compliance system is therefore a way of developing a sound business model.
How Apeiron Helps Your Business Stay Compliant
As a professional services firm, Apeiron provides its clients with an array of services meant to help the business navigate the UAE corporate tax system. Hiring our team of qualified accountants and tax consultants helps you meet all legal requirements and exhaust all chances of tax evasion. Here’s how Apeiron can help your business navigate UAE corporate tax laws:
- Tax Registration and Filing: By law, every business incorporated in the UAE is required to register for corporate tax with the Federal Tax Authority (FTA). Apeiron makes sure that your business is correctly registered for all the necessary registration processes and your tax returns. We work on all the documentation regarding taxes to prepare the correct reports and file them within the correct timeline.
- Comprehensive Tax Advisory Services: Our specialists also give elaborate advice on taxes to assist companies on how to operate under the new laws. It does not matter if you are an experienced or a new firm; we provide services that correspond to your business type. We also discuss how best to structure your business to leverage tax advantages, including free zone exemptions, allowable business expenses, and available tax credits.
- Free Zone Advisory: There are some known exemptions for the companies operating in the free zones of the UAE. But before you can benefit from these exemptions, your business must meet a set of rules. Apeiron assists companies to be aware of the rules governing these zones so that you can continue reaping from tax incentives without going against the set laws.
- Transfer Pricing Compliance: One of the key components of corporate taxation for companies that engage in cross-border transactions, transfer pricing is an essential critical for firms all over the world. The company takes its transfer pricing advisory services to help businesses have their intercompany operations addressed appropriately in relation to the UAE and the international taxation laws.
- Tax Planning and Optimization: Corporate tax compliance is not something to be done in order to play the game but how the game is played. Apeiron is able to determine potential deductions and manage a company’s tax exposure. We offer practical advice on tax deductions, credits, and exemptions in order to ensure that your business only pays what it must yet claims all the possible savings it legally can.
- Audit and Tax Reviews: Our auditing enhances the validity and credibility of your records by providing you with up-to-date accounting information. The two primary benefits of performing regular tax reviews and audits are early detection of problems and, therefore, minimal chances of incurring severe penalties or fines. Apeiron’s team does analysis and assessment in order to come up with the corporate tax compliance.
- Tax Dispute Resolution: For any tax issues or differences with the FTA, Apeiron assists in the best manner and sorts out all related issues quickly. Our team helps to make sure your business does not fall out of grace with the authorities by dealing with the intricacies of business disputes while protecting your business.
Conclusion
Knowledge of the UAE corporate tax laws helps the business avoid all the legal pitfalls and conform to the laws to the letter. Apeiron extends professional accounting and tax consulting services that can steer organizations through the new tax regime. We offer registration services, filing of tax returns, tax planning, advice on tax minimization, and general representation in tax court.
With such collaboration with Apeiron, you can be very sure that your business is in compliance with the existing laws on corporate tax in the UAE as well as enjoying the best tax strategy for growth. Join us and make taxes easier for you to deal with, and let you do what you do best—run your business. Contact Apeiron today to find out how we can assist you in positioning yourself right regarding UAE corporate tax.