Navigating UAE Tax Updates

The UAE’s tax landscape has undergone significant changes in recent years. Our company provides comprehensive tax advisory services to ensure your organization remains compliant. Understanding these changes at a fundamental level will empower your business to adhere to the latest guidelines.

While individual income tax is not levied in the UAE, Excise Tax applies to specific goods deemed harmful. Value Added Tax (VAT) has been in effect since 2018.

UAE businesses exceeding the VAT threshold must charge VAT at a rate of 5% on taxable transactions, necessitating widespread VAT compliance.

Corporate Tax (CT), previously limited to oil companies and foreign banks, has now expanded its scope.

On December 9, 2022, the Ministry of Finance (MoF), through the Federal Tax Authority (FTA), announced Federal Decree-Law No. (47) of 2022 concerning the Taxation of Corporations and Business Profits. This law applies to financial years starting on or after June 1, 2023, with a standard CT rate of 9% on taxable income exceeding AED 375,000 (approximately USD 102,000). The law also addresses transfer pricing compliance, mandating that transactions between ‘related parties’ and ‘connected persons’ adhere to the arm’s length principle as outlined in the OECD Guidelines.

Economic Substance Regulations (ESR), introduced in 2019, continue to ensure transparency in the economic presence of UAE entities, requiring reporting of actual profits reflecting economic activity within the UAE.

Our company offers workshops, training, tax compliance, and risk assessments covering VAT, Corporate Tax, International Tax – Transfer Pricing (subject to further Ministry decisions), and other relevant analyses, providing lasting solutions to enhance your business performance.