Corporate Tax
Corporate Tax
With the introduction of Corporate Tax in the UAE, it's crucial to stay informed and compliant. We offer strategic corporate tax planning and compliance services to help you understand the implications for your business and develop effective tax strategies to minimize your tax liabilities and ensure compliance with local regulations.
Scope Of Corporate Tax In The UAE
Corporate Tax will apply to:
Businesses and individuals conducting business activities under a commercial License
Free zone businesses (Freezone companies shall receive the benefit of the CT incentives if they comply with all regulatory requirements and are not conducting business in the UAE’s mainland).
Foreign companies and individuals only if their business is effectively managed and controlled in the UAE.
Banking operations.
Businesses that encompass construction, development, real estate management, agency, and brokerage activities.
Exempted Income Under CT LAW In UAE
The following income shall be in general exempt from income Tax:
Dividend income earned by UAE company from its qualifying shareholdings.
Capital gains
Profits from group reorganization
Profits from Intra-group transactions
CORPORATE TAX ON UAE FREE ZONES
According to the rules of each Free Zone, the UAE intends to uphold its commitment to businesses registered in Free Zones that do not conduct business with the mainland and that will benefit from corporate tax benefits. All free zones are obliged to submit an annual CIT return.
The following requirements must be met by a free zone person in order to qualify as one:
>> Keep the UAE’s substance up to par
>> Derive ‘Qualifying Income’
>> Not chosen to be liable to Corporate Tax at the Standard Rates; and
>> Follow the Corporation Tax Law’s transfer pricing obligations.
A Qualified Free Zone Person may be required to comply with extra requirements set forth by the Minister. The usual rates of corporate tax will apply starting with the start of the Tax Period in which the Qualified Free Zone Person fails to satisfy any of the qualifications or elects to be subject to the regular corporate tax regime.
Corporate TAX Impact Assessment
Tax compliance: Evaluating the company's compliance with the tax laws and regulations in the UAE, including the submission of tax returns and payment of taxes owed.
Tax planning: Identifying opportunities to minimize tax liabilities and optimize tax benefits, such as claiming tax credits and deductions.
Transfer pricing: Evaluating the transfer pricing policies of the company to ensure compliance with tax laws and regulations, including the transfer of goods, services, and intellectual property between related entities. All companies have to comply with the Transfer Pricing rules and documentation requirements. These transfer pricing rules will now become mandatory and may also be applicable to domestic transactions.
Losses: Accumulated taxable losses shall be allowed to offset future taxable profits.
Tax Grouping: Tax grouping and group relief provisions are allowed. UAE Groups should be able to file consolidated tax returns. Offsetting tax losses among groups might be allowed.
Foreign Tax Credits: Taxable entities will be allowed to take as a credit against its annual tax liability the foreign corporate tax paid on UAE taxable income.
Scope Of Corporate TAX In BAHRAIN
As of now, Bahrain does not impose a general corporate tax on most businesses. The corporate tax rate is 0% for most sectors. However, there is an exception for companies involved in the extraction and refining of hydrocarbons (like oil and gas), which are subject to a 46% tax on their net profits.
Recently, there have been discussions about introducing a standard corporate income tax regime in Bahrain, similar to other jurisdictions. This would mark a significant change, but as of the latest updates, the general corporate tax rate remains at 0%.
Corporate TAX Consulting By Quantum Auditing
QUANTUM AUDITING provides the following services related to Corporate Tax:
>> Corporate Tax Registration
>> Impact Analysis
>> Implementation Plan and Assistance
>> Post Implementation Assistance and Monitoring
>> Corporate Tax Filing
>> Corporate Tax Refund
>> Corporate Tax De-registration
Tax Experts at Quantum Auditing possess strong expertise and help the companies to ensure tax compliance. We have successfully assisted companies in complying with Value Added Tax (VAT) and Excise Tax and our impeccable track record will come in handy for businesses to meet the requirements related to Corporate Tax in the UAE and Bahrain.
Connect with us if you would like us to address more specific VAT and CT queries related to your business.
Email: info@quantumauditing.com
