As corporate tax is effective now in UAE, more business owners are now approaching tax consultants. As it is effective now, we can carry out an assessment of the impact of the UAE corporate tax on legal persons. Businesses are cautioned to follow the UAE Corporate tax law as many of the provisions in the consultation document are subject to amendments. The corporate tax will impact natural persons doing business in UAE. However, in this blog, we will let you know how corporate tax impacts the legal person or firms. Keep reading to know more about the insights.
Applicability Of UAE Corporate Tax On Legal Persons
The UAE corporate tax applies to legal persons and UAE companies incorporated in the UAE. Foreign legal entities that have permanent establishments or that get UAE-sourced income come in the scope of corporate tax.
Legal persons are Private shareholding companies, limited liability companies, public joint stock companies, and other legal structures established under the UAE laws that have distinct legal personalities.
These kinds of companies will come within the scope of the UAE corporate tax regime:
- Companies incorporated in the UAE free zones (Free Zone Persons)
- Domestic companies in the UAE mainland
- Foreign companies earn income from a source in the UAE or have a permanent establishment in the UAE.
- Classification of Residential Status of Legal Persons
Legal persons or companies will be classified as non-residents and residents. Consider the following:
- UAE resident persons will be taxable in the UAE on their worldwide income.
- Non-residents will be subject to UAE corporate tax on the taxable income from their permanent establishment and income that is sourced in the UAE.
- Foreign companies will be treated as residents if they are managed properly and handled in the UAE.
Progressive UAE Corporate Tax Rate For Companies
As per the proposed UAE corporate tax regime, 0% corporate tax is applied on annual taxable income up to AED 375, 000. 9% corporate tax is applied on annual taxable income exceeding AED 375, 000. You can get the best advice regarding the corporate tax regime in UAE and its relevant tax rates.
Applicability Of Corporate Tax On UAE Free
Firms that are within the scope of the UAE corporate tax have to comply with this obligation:
Obtain a Tax registration number from the Federal Tax Authority.
- Carry out corporate tax registration in the UAE.
- File the tax return within 9 months from the end of the tax period.
- Calculate and pay the tax liability.
- Key areas of impact for the legal persons.
- Companies will be impacted by the UAE corporate tax.
Companies and firms will be impacted by the UAE corporate tax in the following ways:
- Audit of Financial statements.
- Assess the impact of permanent establishment.
- Review of processes and systems.
- Assess the impact of Permanent establishment.
How Can Corporate Tax Consultants In Dubai Help You.
The best corporate tax consultants in Dubai such as ebs can help companies with robust reviews of their current business operations to assess their readiness for corporate tax. If you are looking for the best corporate tax consultation, then look no further than ebs. We provide corporate tax assessment and advisory services, corporate tax compliance services and registration services in UAE.
ebs likewise offer services, such as accounting and bookkeeping services, VAT services, Auditing, Due Diligence audit services, and many more.
Feel free to contact us with any additional inquiries or requests for accounting services. A free discussion will be given to you by our specialists, who will answer your request immediately.