Taxation

Value Added Tax

Value Added Tax (VAT) was introduced in the UAE on 1 January 2018. Rate of the Tax is 5% for most of goods and services. Certain essential goods and services are taxed at 0% or exempted from Tax to avoid tax burden on the business and residents. A person (Natural/Legal) must register for VAT if its taxable supplies and imports exceed AED 375,000 per annum. It is optional for businesses whose supplies and imports exceed AED 187,500 per annum.

VAT returns to be filed and the taxes due shall be paid to FTA (Federal Tax Authority) monthly or quarterly based on turnover of the company. Further, businesses are required to maintain the records for the period of 5 to 15 years depending on the industry in which they are in.

Any noncompliance may attract administrative penalties and other legal proceedings.

We provide the below range of services to assist you and make your business a compliant one:

  • VAT Registration
  • VAT De-registration
  • Impact Assessment
  • Health check/ Compliance review
  • Assistance in return filing
  • FTA Audit assistance
  • Refund assistance
  • Voluntary Disclosure Submission
  • Appeal to the TDRC
  • Transaction Advisory & Opinion
  • VAT Training

Taxation

Excise Tax

Excise tax was introduced across the UAE in 2017. Excise tax is a form of indirect tax levied on specific goods which are typically harmful to human health or the environment. These goods are referred to as “excise goods”. Excise Tax is levied (50% or 100%) on the below category of goods:
  • VAT Registration
  • Carbonated drinks
  • Energy drinks
  • Tobacco and tobacco product
  • Electronic smoking devices and tools
  • Liquids used in such devices and tools
  • Sweetened drinks.

Businesses required to register for excise tax


Under the UAE Federal Decree Law No. 7 of 2017 on Excise Tax, registering for excise tax is the responsibility of any business engaged in:

  • The import of excise goods into the UAE
  • The production of excise goods where they are released for consumption in the UAE
  • The stockpiling of excise goods in the UAE in certain cases
  • Anyone who is responsible for overseeing an excise warehouse or designated zone i.e. a warehouse keeper.

Excise returns are to be filed and the taxes due are to be paid to FTA (Federal Tax Authority) by 15 the next month. Further business is required to maintain the records for the period up to 15 years.

FTA has the power to conduct audits of taxable corporates and subsequently impose penal measures on those that do not comply with the law.

Any noncompliance may attract administrative penalties and other legal proceedings.

We provide the below range of services to assist you and make your business a compliant one:

  • Registration
  • De-registration
  • Product registration
  • Assistance in return filing
  • FTA Audit assistance
  • Refund assistance
  • Voluntary Disclosure Submission
  • Appeal to the TDRC
  • Transaction Advisory & Opinion

Taxation

Corporate Tax

UAE Ministry of Finance (MOF) had decided to Introduce Federal Corporate Tax On business profit that will be effective for financial starting on or after 1st June 2023.

MOF has released FAQs on 31st Jan 2022 and we await more updates from MOF in the coming days.

Key highlights of FAQs

  • The UAE CT regime will become effective for financial years starting on or after 1 June 2023
  • 0% Tax for Taxable Income upto AED 375,000 to support small business.
  • 9% Tax for Taxable income exceeding AED 375,000
  • Individuals will not be subject to corporate tax on income from employment, real estate, investment in shares or other personal income not related to a UAE trade or businesses
  • No corporate tax will apply on foreign investors who do not carry on business in the UAE
  • Corporate tax will apply on the adjusted accounting net profit of the business
  • Free zone businesses that meet all necessary requirements can continue to benefit from corporate tax incentives
  • The extraction of natural resources will remain subject to Emirate level corporate taxation
  • No withholding tax will apply on domestic and cross border payments
  • No corporate tax will apply on capital gains and dividends received by a UAE business from its qualifying shareholdings
  • No corporate tax will apply on qualifying intragroup transactions and restructurings
  • Foreign tax will be allowed to be credited against UAE corporate tax payable
  • Loss transfer and utilization rules will be available to businesses

We provide the below range of services to assist you and make your business a compliant one:

  • Registration
  • Impact Assessment
  • Transaction mapping and advisory
  • Corporate structuring
  • Tax Planning
  • Transfer Pricing
  • Transaction Advisory & Opinion