UAE to introduce 9% corporate tax on business profits from June 1, 2023

corporate-tax

Ministry of Finance to introduce federal corporate tax on business profits, effective for financial years starting on or after 1 June 2023

ABU DHABI, 31st January, 2022 (WAM) — The Ministry of Finance has announced that the UAE will introduce a federal corporate tax on business profits that will be effective for financial years starting on or after 1st June 2023. Businesses will become subject to UAE corporate tax from the beginning of their first financial year that starts on or after 1st June 2023.

The UAE corporate tax regime has been designed to incorporate best practices globally and minimise the compliance burden on businesses. Corporate tax will be payable on the profits of UAE businesses as reported in their financial statements prepared in accordance with internationally acceptable accounting standards, with minimal exceptions and adjustments. The corporate tax will apply to all businesses and commercial activities alike, except for the extraction of natural resources which will remain subject to Emirate level corporate taxation.

With a standard statutory tax rate of 9 percent and a 0 percent tax rate for taxable profits up to AED375,000 to support small businesses and startups, the UAE corporate tax regime will be amongst the most competitive in the world.

No corporate tax will apply on personal income from employment, real estate and other investments, or on any other income earned by individuals that does not arise from a business or other form of commercial activity licensed or otherwise permitted to be undertaken in the UAE.

“As a leading jurisdiction for innovation and investment, the UAE plays a pivotal role in helping businesses grow, locally and globally. The certainty of a competitive and best in class corporate tax regime, together with the UAE’s extensive double tax treaty network, will cement the UAE’s position as a world-leading hub for business and investment”, said Younis Haji Al Khoori, Undersecretary of the Ministry of Finance.

Younis Haji Al Khoori further adds that “with the introduction of corporate tax, the UAE reaffirms its commitment to meeting international standards for tax transparency and preventing harmful tax practices. The regime will pave the way for the UAE to address the challenges arising from the digitalisation of the global economy and the other remaining BEPS [Base Erosion and Profit Shifting] concerns, and execute its support for the introduction of a global minimum tax rate by applying a different corporate tax rate to large multinationals that meet specific criteria set with reference to the above initiative.”

Recognising the contribution of free zones to the UAE’s economy and competitiveness, the UAE corporate tax regime will continue to honour the corporate tax incentives currently being offered to free zone businesses that comply with all regulatory requirements and that do not conduct business with mainland UAE.

Given the position of the UAE as a global financial centre and an international business hub, the UAE will not impose withholding taxes on domestic and cross border payments, or subject foreign investors who do not carry on business in the UAE to corporate tax.

As an international headquarter location, a UAE business will be exempt from paying tax on capital gains and dividends received from its qualifying shareholdings, and foreign taxes will be allowed to be credited against UAE corporate tax payable.

The UAE corporate tax regime will have generous loss utilisation rules and will allow UAE groups to be taxed as a single entity or to apply group relief in respect of losses and intragroup transactions and restructurings.

The UAE corporate tax regime will ensure the compliance burden is kept to a minimum for businesses that prepare and maintain adequate financial statements. Businesses will only need to file one corporate tax return each financial year and will not be required to make advance tax payments or prepare provisional tax returns. Transfer pricing and documentation requirements will apply to UAE businesses with reference to the OECD Transfer Pricing Guidelines.

“The introduction of a corporate tax regime will help the UAE achieve its strategic ambitions and incentivise businesses to establish and expand their activities in the UAE,” said Younis Haji Al Khoori.

UAE businesses will be given ample time to prepare for the introduction of corporate tax in the UAE. The UAE Ministry of Finance plans to issue further information on the UAE corporate tax regime toward the middle of the year to help businesses get ready and be fully compliant.

*For further information, please visit the Federal Tax Authority website: https://tax.gov.ae/en

Courtesy:-  https://wam.ae/en

Redetermination of penalties equal to 30% of the total unpaid penalties, pursuant to Cabinet Decision 49 of 2021 on the Administrative Penalties for Violation of Tax Laws in the UAE:

Tax Reduction in the Penalties

 

Redetermination of penalties equal to 30% of the total unpaid penalties

31 December 2021 is the due date to avail the benefit of the Tax Penalties Amnesty or Redetermination of penalties pursuant to Cabinet Decision 49 of 2021 (the Redetermination of penalties equal to 30% of the total unpaid penalties).

To benefit from the tax penalties amnesty or redetermination, all of the following conditions have to be met according to Article 3 of Cabinet Decision 49 of 2021 on the Administrative Penalties for Violation of Tax Laws in the UAE:

  1. Any of the administrative penalties set out in Cabinet Decision No. 40 of 2017 have been imposed on the person before the effective date of Cabinet Decision No. 49 of 2021 (i.e. before 28 June 2021);
  2. The person has not settled all the administrative penalties imposed on it as per Cabinet Decision No. 40 of 2017 in full before 28 June 2021
  3. The taxable person has undertaken all of the following:
  • Settled all payable tax, i.e. the registrant shall ensure that by 31 December 2021, no payable tax is still outstanding whether such tax was payable before or after 28 June 2021, and that all such amounts have been received by the FTA by 31 December 2021; and
  • Settled 30% of the total unsettled administrative penalties referenced above which were imposed before 28 June 2021, no later than 31 December 2021.
  • In order to avail the tax amnesty benefit, ensure that all of the above mentioned conditions are fulfilled.
  • All payable taxes is the tax payable (based on tax returns submitted and any adjustments due to voluntary disclosures or tax assessments) that is still outstanding whether such tax was payable before or after 28 June 2021.
  • 30% of the total unsettled administrative penalties refer to the administrative penalties imposed prior to 28 June 2021 pursuant to Cabinet Decision No. 40 of 2017.
  • All the payable taxes and 30% of the administrative penalties must be settled by 31 December 2021.
  • The amount to be settled as per Cabinet Decision No. (49) of 2021 may be viewed by logging into your E-services account and by clicking the option: “Click Here” to view the Amendment of Administrative Penalties imposed as per Cabinet Decision No. 49 of 2021.
  • Please ensure that the payment transfer(s) reflect on the FTA portal by 31 December 2021 and the payment receipts are available to substantiate the transfer.

Saturday, Sunday weekend from January 1 in UAE: Four-and-half-day working week

Organizations

New weekend: UAE announces reduced working week

All Federal government departments will move to the new weekend from January 1, 2022

UAE announced on Tuesday that it will transition to a four-and-a half-day working week, with Friday afternoon, Saturday, and Sunday forming the new weekend. All Federal government departments will move to the new weekend from January 1, 2022.

The #UAE becomes the first nation in the world to officially introduce a national working week shorter than five days as it moves to 4.5 day week, Friday afternoon, Saturday and Sunday to be new weekend.
The Dubai and Abu Dhabi governments said their employees would adopt the same hours. The National understands all schools will move to the same working week on the first day of term, with hours expected to be announced soon.

The decision “will better align the Emirates with global markets, reflecting the country’s strategic status on the global economic map”, the UAE Government Media Office said.

For the right bookkeeping services, always hire Accounting Firms In Dubai

Accounting-Firms
An accountant is an expert who is liable for keeping and deciphering monetary records. Most Accounting Firms In Dubai are answerable for a wide scope of money-related errands, either for singular customers or for bigger organizations and associations utilizing them.
A few different terms are regularly examined related to the expression “bookkeeper,” which can prompt disarray on what this vocation involves. For instance, “bookkeeper” and “clerk” are phrases that are some of the time utilized conversely, yet there are a few key contrasts between these work titles.
Regularly, Accounting Firms In Dubai will have procured something like a partner degree and spotlight on recording monetary exchanges. Accountants, then again, will have normally procured no less than a four-year certification in bookkeeping and are entrusted with deciphering monetary data instead of essentially assembling it.

To put it plainly, accountants can be clerks; however, not all accountants will be accountants.

Also, a confirmed public bookkeeper (CPA) is a bookkeeper who has finished the CPA test and has met state authorizing prerequisites. Thus, all CPAs are accountants, yet not all accountants are CPAs.

Accounting is a wide term that envelops numerous diverse occupation titles and jobs inside associations. There are three principal sorts of accountants—public accountants, executives accountants, and government accountants—all of which center around various calling parts. Interior and outer examiners are additionally firmly related.

Jobs and Responsibilities

Albeit the day by day obligations of Accounting Services In Dubai will shift by position and association, the absolute most normal undertakings and duties of accountants include:
  • Ensuring the precision of monetary reports, just as their consistency with important laws and guidelines
  • Preparing and keeping up with significant monetary reports
  • Preparing assessment forms and guaranteeing that charges are paid appropriately and on schedule
  • Evaluating monetary tasks to suggest best-rehearses, recognize issues and plan arrangements, and help associations run effectively
  • Offering direction on cost decrease, income improvement, and benefit augmentation
  • Conducting determining and hazard investigation appraisals

AML/CFT COMPLIANCE AND CERTIFICATION SERVICES IN UAE

services

AML/CFT COMPLIANCE AND CERTIFICATION SERVICES IN UAE

Anti-money laundering law comprises the laws, regulations, and procedures to curb the disguising of illegally obtained funds through market manipulation, trading of illegal goods, corruption, tax evasion, terrorism, etc. AML is targeting to identify and prevent the methods to launder the illegally obtained funds.

Anti-money laundering and counter-financing of terrorism (CFT) are now global concerns. And all individuals and firms in the UAE shall adhere to the rules and regulations to avoid legal consequences.

In UAE to develop the legislative and legal structure of the nation to ensure compliance with international standards on anti-money laundering and countering the financing of terrorism Federal Decree-law No. (20) of 2018 on ANTI-MONEY LAUNDERING AND COMBATING THE FINANCING OF TERRORISM AND FINANCING OF ILLEGAL ORGANISATIONS has been implemented.

The law aims to:

(a) Combat money-laundering practices.

(b) Establish a legal framework that supports the authorities concerned with anti-money laundering and crimes related to money-laundering.

(c) Counter the financing of terrorist operations and suspicious organisations.

The UAE AML Law (Cabinet Decision No. 10 of 2019) outlined following categories as Designated Nonfinancial Businesses and Professions (DNFBPs) in Article 3.

Anyone who is engaged in the following trade or business activities shall be considered a DNFBP:

  • Brokers and real estate agents when they conclude operations for the benefit of their customers with respect to the purchase and sale of real estate.
  • Dealers in precious metals and precious stones (any single monetary transaction or several transactions that appear to be interrelated or equal to more than AED 55,000).
  • Lawyers, notaries, and other independent legal professionals and independent accountants, when preparing, conducting, or executing specific financial transactions for their customers.
  • Providers of corporate services and trusts upon performing or executing the specific transaction on behalf of their Customers.
  • Other professions and activities shall be determined by a decision of the Minister.

Statutory obligations of DNFBPs are:

  • Appointment of an AML/CFT compliance officer
  • Performing customer due diligence (CDD) measures
  • Suspicious transaction reporting to the Financial Intelligence Unit (FIU)
  • Subscription to the automatic reporting system for sanctions lists

To fulfill these statutory obligations, DNFBPs should ensure that they have adequate internal policies, procedures, and controls in place, commensurate with the size and nature of the business. DNFBPs that fail to follow with these rules shall be subject to various administrative and financial penalties ranging from Dh 50,000 to Dh 5 millions. This law and framework have been established to detect, discourage and prevent financial crimes and reporting suspicious transactions.

WHAT RBS CAN DO FOR YOU?.

Anti-Money Laundering Compliance Advisory

With the continuous changes in the regulatory framework and more stringent AML Rules and regulations, it is becoming difficult for Financial institutions and DNFPBs to implement new regulations and design complete compliance framework.

We help our customers and provide advisory services on –

  • Registering in GoAml portal’
  • Identifying and assessing ML/FT risks
  • AML Governance Framework,
  • Assurance Reviews and Agreed Upon Procedures
  • Compliance Remediation,
  • Financial Crime Prevention Framework.
  • Putting in place an adequate governance framework for AML/CFT
  • Comply with the directives of the Competent Authorities of the State in relation to the United Nations Security Council resolutions under Chapter VII of the Charter of the United Nations, and in relation to Cabinet Decision No. (20) of 2019 Regarding Terrorism Lists Regulation and Implementation of UN Security Council Resolutions.
  • Providing outsourced compliance officer services and AML consulting services.
  • Extending all the necessary guidelines to your team in keeping and maintaining the books and records in relation to the law in a manner that is best suited to your line of business

WHY HIRE AN ACCOUNTANT?

Accounting-Firms

The first level headed of keeping books of records is to get data about the business’s monetary situation. Now you can hire the right services of accounts and hire reputable Accounting Firms In Dubai.

Here are a couple of fundamental benefits of accounting

  1. Maintenance of perpetual Business records

Essentially business will have countless exchanges. So it helps in recording every one of the monetary exchanges relating to that separate monetary year.

  1. A efficient request

Accounting is an orderly method of introducing deals in books of records. It is a finished and orderly portrayal of deals. Professional Accounting Services In UAE keeps a record and investigation of each deal.

  1. Decision making

The principle capacity of the board is dynamic. Accounting assists the administration to settle on better choices regarding selling cost, derivation of cost, expansion in deals, and so on.

  1. Valuation of business

A good and reasonable valuation of the business is determined. Accounting helps achieve the right picture portrayed yet to be a determined sheet, which is utilized to decide the price tag.

  1. Helps in Raising advances

Entrepreneurs take advances when they need to extend their business. Monetary organizations give advances based on the benefit of the business. This can be estimated by examining the records of the organization.

  1. Evidence in court

All deals are recorded in the books, and these can be utilized as proof in the courtroom.

  1. Complying with law

When you set up a business, you should manage different government offices like the annual assessment, GST, etc. Accounting Services In Sharjah helps in the recording of different gets back with these offices.

  1. Preparation of Financial proclamations

If there is a legitimate recording of exchanges kept up with, Financial proclamations like Trading and Profit and misfortune account, Balance Sheet can be arranged without any problem.

  1. Comparison of Results

It helps dissect the economic aftereffects of the element by correlating one year to one more year.

  1. Audits

The examiner gives review testament on the records, demonstrating that there are no inconsistencies in the association.

  1. Effective service

Accounting gives legitimate input to the administration about the monetary status of the association. This aids the service settle on better business choices and helps in controlling various exercises of the business. The exhibition of the business can not be set in stone with appropriate accounting.

WHY HIRE AN ACCOUNTANT?

Accounting Firms In Dubai

The first level headed of keeping books of records is to get data about the business’s monetary situation. Now you can hire the right services of accounts and hire reputable Accounting Firms In Dubai.

Accounting Firms In Dubai

.

Here are a couple of fundamental benefits of accounting

  1. Maintenance of perpetual Business records

Essentially business will have countless exchanges. So it helps in recording every one of the monetary exchanges relating to that separate monetary year.

  1. A efficient request

Accounting is an orderly method of introducing deals in books of records. It is a finished and orderly portrayal of deals. Professional Accounting Services In UAE keeps a record and investigation of each deal.

  1. Decision making

The principle capacity of the board is dynamic. Accounting assists the administration to settle on better choices regarding selling cost, derivation of cost, expansion in deals, and so on.

  1. Valuation of business

A good and reasonable valuation of the business is determined. Accounting helps achieve the right picture portrayed yet to be a determined sheet, which is utilized to decide the price tag.

  1. Helps in Raising advances

Entrepreneurs take advances when they need to extend their business. Monetary organizations give advances based on the benefit of the business. This can be estimated by examining the records of the organization.

  1. Evidence in court

All deals are recorded in the books, and these can be utilized as proof in the courtroom.

  1. Complying with law

When you set up a business, you should manage different government offices like the annual assessment, GST, etc. Accounting Services In Sharjah helps in the recording of different gets back with these offices.

  1. Preparation of Financial proclamations

If there is a legitimate recording of exchanges kept up with, Financial proclamations like Trading and Profit and misfortune account, Balance Sheet can be arranged without any problem.

  1. Comparison of Results

It helps dissect the economic aftereffects of the element by correlating one year to one more year.

  1. Audits

The examiner gives review testament on the records, demonstrating that there are no inconsistencies in the association.

  1. Effective service

Accounting gives legitimate input to the administration about the monetary status of the association. This aids the service settle on better business choices and helps in controlling various exercises of the business. The exhibition of the business can not be set in stone with appropriate accounting.

End

Accounting Firms In Dubai helps in the general development of the business and helps in monitoring the monetary exchanges of the business. Therefore, accounting Services In Dubai are an ideal approach to efficiently dissect the business’s development, objectives, and deficiencies.

FOR THE RIGHT BOOKKEEPING SERVICES, ALWAYS HIRE ACCOUNTING FIRMS IN DUBAI

accounting

An accountant is an expert who is liable for keeping and deciphering monetary records. Most Accounting Firms In Dubai are answerable for a wide scope of money-related errands, either for singular customers or for bigger organizations and associations utilizing them.

A few different terms are regularly examined related to the expression “bookkeeper,” which can prompt disarray on what this vocation involves. For instance, “bookkeeper” and “clerk” are phrases that are some of the time utilized conversely, yet there are a few key contrasts between these work titles.

Regularly, Accounting Firms In Dubai will have procured something like a partner degree and spotlight on recording monetary exchanges. Accountants, then again, will have normally procured no less than a four-year certification in bookkeeping and are entrusted with deciphering monetary data instead of essentially assembling it.

To put it plainly, accountants can be clerks; however, not all accountants will be accountants.

Also, a confirmed public bookkeeper (CPA) is a bookkeeper who has finished the CPA test and has met state authorizing prerequisites. Thus, all CPAs are accountants, yet not all accountants are CPAs.

Accounting is a wide term that envelops numerous diverse occupation titles and jobs inside associations. There are three principal sorts of accountants—public accountants, executives accountants, and government accountants—all of which center around various calling parts. Interior and outer examiners are additionally firmly related.

Jobs and Responsibilities

Albeit the day by day obligations of Accounting Services In Dubai will shift by position and association, the absolute most normal undertakings and duties of accountants include:

• Ensuring the precision of monetary reports, just as their consistency with important laws and guidelines

• Preparing and keeping up with significant monetary reports

• Preparing assessment forms and guaranteeing that charges are paid appropriately and on schedule

• Evaluating monetary tasks to suggest best-rehearses, recognize issues and plan arrangements, and help associations run effectively

• Offering direction on cost decrease, income improvement, and benefit augmentation

• Conducting determining and hazard investigation appraisals

Furthermore, Accounting Services In Dubai have a legitimate commitment to act sincerely and stay away from carelessness in their practices. Therefore, they are additionally answerable for guaranteeing that their customers’ monetary records are consistent with the applicable laws and guidelines.

UAE AMENDED SOME ADMINISTRATIVE PENALTIES FOR VIOLATION OF TAX LAWS IN THE UAE

UAE Tax penalty
Cabinet Decision No. 49 of 2021 on Amending some Provisions of Cabinet Decision No. 40 of 2017 on the Administrative Penalties for Violation of Tax Laws in the UAE
In accordance with Cabinet Decision No 49 of 2021 on Amending some Provisions of Cabinet Decision No. 40 of 2017 on the Administrative Penalties for Violation of Tax Laws in the UAE, which will be effective from 28 June 2021, the FTA would like to inform you that it has released two Public Clarifications, which you can view on the FTA website.
With respect to TAXP002, and if you had any outstanding balances, you would have previously been able to see such outstanding balance on the returns page. From Wednesday 23 June, you will be able to see how much of your balance is related to tax and how much is related to administrative penalties on the My Payments page when you log into E-Services. This link will open a window that will include the following:
  • Tax Payable – this is the outstanding tax balance (based on tax returns you submitted and any adjustments due to voluntary disclosures or tax assessments) and will be updated on a daily basis until 31 December 2021, for you to know how much tax is outstanding and is subject to late payment penalties if not settled by payable date, and needs to be settled in full before 31 December 2021 to benefit from the redetermination of administrative penalties in accordance with Cabinet Decision No 49 of 2021.
  • Late Registration Penalty – this is the outstanding unpaid late registration penalty, if available.
  • Other Penalties Payable – this is the outstanding unpaid administrative penalties balance (other than late registration) and may increase if new administrative penalties are applied or decrease if payments are made or penalty reversed. The balance on 28 June 2021 will be subject to redetermination if conditions stated in Cabinet Decision No 49 of 2021 are met.
  • Net Payable Amount – this is the total amount of Tax Payable and Penalties Payable outstanding at any time.
  • Total Credit – this is the amount of credit that the registrant has with the FTA. FTA will be launching a full dashboard with your Tax Payable and Administrative Penalties