In a historic development, the UAE government has introduced corporate taxation starting from June 1, 2023, marking a significant milestone in its fiscal policies. At Dhanguard, we are committed to assisting businesses with this transition by offering expert corporate tax service solutions. This new tax regime is designed to align with international standards, ensuring economic stability and growth.
By choosing Dhanguard, you ensure a smooth and compliant tax filing process. Our expertise helps businesses understand corporate tax return requirements, manage the corporation tax filing process efficiently, and stay ahead of evolving regulations.
Corporate tax is a direct tax levied on the income or profits of businesses. It is also commonly referred to as business tax or corporation tax filing in some jurisdictions. Globally, corporate taxation varies, but the UAE’s introduction of a 9% corporate tax service rate represents a significant shift from its historic 0% rate.
This change reflects the UAE’s commitment to diversifying its revenue sources and ensuring compliance with global economic standards. Businesses must now understand the corporate tax process to ensure proper filing and compliance. With the assistance of a reliable corporate tax accountant, businesses can streamline their tax filings and avoid potential penalties.
Historically, the UAE has been known as a low-tax jurisdiction. There was no corporate tax service imposed on most businesses, except international banks and companies engaged in oil and gas extraction.
Over the years, the UAE government recognized the need to introduce a corporate tax system to sustain its growing economy and invest in infrastructure, healthcare, and education.
Introduction of VAT (2018): A 5% Value Added Tax (VAT) was imposed on consumer goods and services.
Announcement of Corporate Tax (2022): On January 31, 2022, the UAE government announced the corporation tax filing system, effective June 1, 2023.
Implementation (2023): Businesses earning more than AED 375,000 annually are now subject to a corporate tax return filing with a standard 9% tax rate.
This step ensures fair taxation, discourages tax evasion, and aligns the UAE with global taxation norms. Dhanguard’s corporate tax consultants are well-versed in these regulations and provide invaluable support to businesses during this transition.
Who Needs to Pay Corporate Tax? The new tax applies to all businesses generating taxable income, including LLCs, PSCs, PJSCs, and LLPs. Free zone companies remain exempt from taxes as long as they comply with regulations and do not conduct business with the mainland.
Our corporate tax accountants assist businesses in determining their tax obligations and ensuring timely corporate tax return submissions.
0% Rate: Taxable profits up to AED 375,000 per year.
9% Rate: Taxable profits exceeding AED 375,000 per year.
15% Rate: Applies to large multinational corporations earning over EUR 750 million annually.
With Dhanguard’s corporate tax service, businesses can calculate their tax liabilities accurately and comply with UAE tax laws seamlessly.
Certain entities remain exempt from the corporate tax process, including:
Government entities and wholly government-owned companies.
Charitable organizations and public benefit entities.
Companies engaged in the extraction of oil and natural resources.
Additionally, businesses earning income from dividends or selling shares are also eligible for participation exemptions under UAE tax laws. Our corporate tax consultants provide detailed guidance on these exemptions, ensuring businesses take full advantage of available tax benefits.
Companies operating in free zones continue to benefit from tax exemptions. However, businesses conducting transactions with the mainland must register for corporation tax filing. This ensures compliance with UAE’s laws while maintaining the incentives of free zone operations. Dhanguard’s corporate tax service ensures that free zone businesses adhere to tax regulations while maximizing their benefits.
The introduction of a corporate tax regime is expected to significantly impact the UAE’s business environment, offering several advantages:
Global Investment Appeal: The transparent taxation system will attract foreign investors seeking a stable, business-friendly environment.
Increased Competition: The corporate tax process aligns the UAE with international markets, fostering fair competition.
Economic Diversification: Businesses will be encouraged to explore new markets, driving innovation and economic growth.
The corporation tax filing process involves several steps, including:
Business Registration: All businesses must register for corporate tax with the UAE Federal Tax Authority.
Financial Record-Keeping: Accurate financial records are essential for determining taxable income.
Tax Calculation: Businesses must calculate their tax liabilities based on their profits.
Tax Submission: Filing of the corporate tax return through the official portal.
Payment: Timely payment of the calculated tax amount.
Dhanguard’s corporate tax accountants assist businesses in every step of this process, ensuring accuracy and compliance.
Taxable income is calculated based on the net profit or loss reflected in the company’s financial statements. If a business incurs losses, it can carry forward up to 75% of the loss to offset future taxable income. This allows businesses to optimize their corporate tax return and ensure efficient corporation tax filing.
The introduction of corporate tax in UAE requires businesses to reassess their tax strategies and financial planning. Companies should seek the assistance of a corporate tax accountant or corporate tax consultant to ensure compliance with tax regulations and maximize tax efficiency. Proper small business tax filing and corporate tax service support will help businesses navigate the new tax landscape smoothly.
At Dhanguard, we simplify corporate tax processes and ensure compliance with UAE regulations. Our expert team provides end-to-end support, from corporate tax return filing to strategic tax advisory. Here’s how we assist your business:
Our corporate tax accountants handle accurate and timely filing of your corporate tax returns, ensuring compliance with UAE laws.
We offer cost-effective corporate tax services designed specifically for small businesses to meet their filing requirements.
Our experienced corporate tax consultants provide expert advice on tax-saving strategies and regulatory compliance.
We help maintain accurate financial records, a crucial step in the corporate tax process.
Our corporate tax accountants calculate your tax liabilities based on UAE corporate tax rates and applicable exemptions.
We advise on available tax exemptions, including those for free zone companies and qualifying income sources.
Our experts ensure free zone businesses adhere to UAE tax regulations while benefiting from exemptions.
From business registration to obtaining a corporate tax certificate, we manage the entire registration process.
Our services include regular compliance checks to help you stay ahead of corporate tax filing deadlines.
We assist with tax audits by ensuring proper documentation and responding to regulatory queries effectively.
At Dhanguard, we ensure full compliance with the UAE corporate tax system. Whether you're a large enterprise or a small business, our expert corporate tax services provide smooth tax registration, accurate tax return filing, and strategic advisory tailored to your unique needs.
Contact us today to ensure your business remains compliant, competitive, and tax-efficient in this evolving regulatory environment.
