The United Arab Emirates introduced a federal Corporate Tax (CT) regime in 2023, marking a significant development in the country’s taxation system. Designed to align the UAE with international tax standards, this corporate tax applies to business profits while preserving the UAE’s business-friendly environment.
At Veracious Group, we assist businesses in understanding the rules, ensuring compliance, and optimizing their operations under the UAE corporate tax framework.
Key Highlights of UAE Corporate Tax
- Standard Corporate Tax Rate: Profits exceeding AED 375,000 are taxed at 9%, while profits below this threshold enjoy a 0% rate.
- Freezone Companies: Entities in freezones may remain tax-exempt if they comply with local regulations and do not conduct business outside the freezone.
- Taxable Businesses: All UAE incorporated businesses, including mainland companies and foreign branches, are subject to corporate tax on profits.
Who Is Subject to Corporate Tax?
Corporate tax applies to all UAE businesses generating profits within the country:
- Mainland companies
- Freezone entities (subject to conditions)
- Branches of foreign companies
Certain exemptions exist for government entities and qualifying small businesses, but all other businesses must comply to avoid penalties.
Determining Taxable Income
Taxable income is calculated as the total profits from business activities minus allowable expenses and deductions. Businesses are required to maintain proper financial records and audited statements to ensure accurate reporting. Additional incentives or exemptions may apply, depending on the sector or reinvestment activities.
Compliance and Filing Requirements
Compliance is key under the UAE corporate tax regime. Businesses must register with the Federal Tax Authority (FTA) and submit annual corporate tax returns.
Key compliance aspects include:
- Annual Filing: Companies must submit corporate tax returns electronically via the FTA portal.
- Accounting Records: Proper bookkeeping and audited financial statements are mandatory for calculating taxable profits.
- Penalties for Non-Compliance: Failure to register, late filing, or underreporting profits may result in fines or legal action.
Benefits of the UAE Corporate Tax System
- Aligns the UAE with international tax standards, enhancing credibility
- Maintains competitive rates for businesses
- Promotes transparency for investors and stakeholders
- Encourages proper financial management and record-keeping
- Provides opportunities for tax planning and strategic growth
Corporate Tax Planning and Strategy
Effective corporate tax planning allows businesses to optimize profits, utilize exemptions, and avoid penalties. At Veracious Group, we help companies develop tailored strategies, including:
- Leveraging freezone benefits
- Cross-border tax management
- Sector-specific tax incentives
- Accurate reporting and compliance
Why Choose a Veracious Group for Corporate Tax Services?
Navigating the UAE’s corporate tax landscape can be complex. Veracious Group offers professional guidance to help businesses:
- Ensure full compliance with UAE corporate tax laws
- Reduce risks of penalties and fines
- Optimize tax obligations and profits
- Maintain accurate and audit-ready financial records
Our expert team provides personalized advisory for businesses of all sizes, ensuring a smooth transition under the new corporate tax regime.
Contact Veracious Group Today
Ensure your business remains compliant and efficient under the UAE corporate tax framework.
Email: info@vcsgroup.ae
Phone: +971527601343
Website: www.vcsgroup.ae
Get in touch with Veracious Group to schedule a consultation and safeguard your business with professional corporate tax services.