Tax and Compliance in Abu Dhabi
In Abu Dhabi, tax compliance and reporting are essential for businesses to remain compliant with local laws. As a registered tax agent in Abu Dhabi, we provide comprehensive corporate tax compliance services to ensure that your business is up-to-date with the latest regulations. We offer a range of services including tax auditing, VAT filing and registration, and more.
Our team of experienced professionals is committed to helping you navigate the complexities of taxation in Abu Dhabi. We understand that managing taxes can be challenging, so we provide personalized advice and tailored solutions to meet your specific needs. With our expertise and commitment to excellence, we guarantee that you will get the best results when it comes to complying with local taxation laws.
What Is the Difference Between Tax and Taxation?
- The term “tax” refers to a fee collected/levied by a country’s or state’s government.
- Taxation, on the other hand, refers to the act of levying taxes. It covers everything from the creation of rules by the government to the passage of legislation by the parliament, as well as the act of tax assessment, the role of tax commissioners, appellate authorities, and more.
Do Businesses Pay Taxes in the UAE?
The laws governing corporate taxes vary slightly from emirate to emirate, but in general, taxes are only levied at federal level on foreign bank branches and foreign oil or gas producing companies.
An Excise Tax is also levied on certain goods that are deemed harmful to human health or the environment. And, most recently, there has been an imposition of Value Added Tax (VAT) on the majority of goods and services.
Furthermore, companies that remit income in the form of interest, royalties, or dividends are exempt from withholding tax by the Federal Tax Authority UAE (FTA UAE).
What is Corporate Tax?
Corporate Tax is a form of direct tax, also referred to as “Business Profits Tax” or “Corporate Income Tax” in other jurisdictions. The tax is directly imposed on the profit or net income of businesses or corporations operating in the UAE.
Why is the UAE introducing Corporate Tax?
Introducing corporate tax across the UAE indicates the UAE’s commitment to meeting international taxation standards to ensure tax transparency throughout each state and to prevent insufficient tax practices. It will help enhance the UAE’s position as an ideal global hub for investment and businesses worldwide helping in accelerating its strategic development and ensuring achieving goals on a wider scale.
Will the corporate tax be imposed on every business throughout the UAE?
The Corporate Tax, UAE is a federal tax which is why each business or corporation operating in any Emirate of the UAE is subject to the CT.
How much is the new corporate tax in the UAE?
The corporate tax (‘CT’) will be levied at the following rates:
- 0% if the taxable income does not exceed the threshold limits.
- 9% if taxable income exceeds the threshold (AED 375,000).
Who can apply to form a Tax Group?
UAE companies can apply to form a Tax Group and be treated as a single taxable person if the following conditions are met:
- The parent entity holds 95% ownership, voting rights, and the right to the assets and profit of the group entities.
- Neither the parent nor the subsidiary is an exempt entity. This condition is relaxed when the subsidiaries are held by a Government Entity.
- Neither the parent nor the subsidiary is a qualifying free zone.
- Both the parent and the subsidiary follow the same financial year and prepare their financial statements using the same accounting standards.
Why Choose Us?
We understand the importance of accurate compliance for businesses in Abu Dhabi. That’s why we provide our clients with the best possible advice on Tax and Compliance related matters. We strive to make sure that your business is compliant with all relevant laws and regulations without any hassle or delay. With us, you can rest assured that your business will remain compliant at all times.
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