Corporate Tax

Corporate tax is a form of direct taxation applied to the net income or profit earned by corporations and various business entities. This tax is calculated based on the financial performance of the business, including revenues, expenses, and profits. Corporate tax is essential for generating public revenue and funding government services and infrastructure.

In different jurisdictions, corporate tax may also be known as “corporate income tax” or “business profits tax.” Despite variations in terminology, the fundamental principle remains the same: businesses are required to pay a percentage of their profits to the government. This tax serves as a key component of the broader tax system, contributing to the equitable distribution of tax burdens among different economic actors and ensuring that businesses contribute their fair share to the public finances.

Corporate tax rules

A business with a financial year commencing on July 1, 2023, and concluding on June 30, 2024, will become subject to UAE Corporate Tax (CT) starting from July 1, 2023. This is the beginning of the first financial year that starts on or after June 1, 2023, when the new corporate tax regulations come into effect. Consequently, the business will need to comply with UAE CT requirements and regulations throughout its financial year, ensuring proper reporting and tax obligations are met from the onset of this period.

A business with a calendar financial year beginning on January 1, 2023, and ending on December 31, 2023, will become subject to UAE Corporate Tax (CT) starting from January 1, 2024. This date marks the beginning of the first financial year that commences on or after June 1, 2023, when the UAEâ€™s corporate tax regulations are implemented. As such, the business will need to adhere to the UAE CT requirements and regulations throughout its financial year starting January 1, 2024, ensuring compliance with all relevant tax obligations from that point forward.

Accounts payable

As part of our comprehensive accounting services, we offer specialized support for clients who do not yet have a UAE bank account to efficiently manage their accounts payable processes. Recognizing that the local entity is a newly established company, we propose a payment frequency of twice per month, which we consider adequate for maintaining smooth financial operations during the initial stages. This arrangement ensures timely payments to suppliers and service providers, fostering strong business relationships and facilitating the company’s growth. Our team is dedicated to providing tailored solutions that meet the unique needs of new businesses, helping them navigate the financial landscape with ease and confidence.

Excise Tax

Excise tax was implemented across the UAE in 2017 as part of the country’s broader efforts to regulate and manage the consumption of certain goods. This form of indirect tax is specifically levied on goods that are considered detrimental to human health or the environment. Such goods are classified as â€œexcise goodsâ€ and are subject to taxation to discourage their use and mitigate their adverse impacts.

The determination of whether a product qualifies as an excise good is based on specific definitions and criteria established by the Federal Tax Authority (FTA). These definitions provide a clear framework for identifying which items fall under the excise tax regime. Generally, excise goods include, but are not limited to, products like tobacco, energy drinks, and carbonated beverages, which are subject to higher tax rates due to their harmful effects.

Understanding whether a product is classified as an excise good is crucial for businesses to ensure compliance with UAE tax regulations. Proper identification and adherence to the excise tax requirements are essential for avoiding penalties and managing financial obligations effectively.

Tobacco and tobacco products encompass all items specified within Schedule 24 of the GCC Common Customs Tariff. This schedule provides a comprehensive list of tobacco-related products subject to excise tax under the GCC framework. It includes a wide range of items such as cigarettes, cigars, and other forms of processed tobacco. By adhering to the classifications outlined in Schedule 24, businesses can ensure accurate compliance with the excise tax regulations and effectively manage their tax liabilities. Understanding and applying these definitions is crucial for maintaining regulatory compliance and avoiding potential issues with tax authorities.

Carbonated drinks include all types of aerated beverages, except for unflavored aerated water. Additionally, this category covers any concentrates, powders, gels, or extracts that are intended to be mixed or prepared into aerated beverages.

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Corporate Tax

Corporate Tax

Corporate tax rules

Accounts payable

Excise Tax

With a professional team we are ready to help your needs

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