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VAT filing
VAT

What Happens If You Don’t File VAT on Time?

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Value Added Tax (VAT) is a crucial part of the financial system in Dubai and across the UAE. Businesses registered for VAT are required to file their returns on time as per the guidelines set by the Federal Tax Authority (FTA). Failure to comply can lead to severe consequences, including fines, penalties, and even legal action. VAT Filing in Dubai VAT was introduced in the UAE on January 1, 2018, with a standard rate of 5%. All taxable businesses must file VAT returns periodically, typically every quarter, unless they are required to file monthly. The VAT return submission and payment deadline is usually 28 days after the end of the tax period. If a business fails to file or pay VAT on time, it faces penalties and other legal consequences imposed by the FTA. Consequences of Late VAT Filing 1. Financial Penalties One of the most immediate consequences of missing the VAT filing deadline is financial penalties. The UAE’s tax laws are strict, and businesses are expected to comply to avoid significant fines. The penalties for late VAT filing are as follows: AED 1,000 for the first offense AED 2,000 for a repeated offense within 24 months Late payment penalty: If the VAT due is not paid by the deadline, an additional penalty of 2% of the unpaid tax is applied immediately. Additional penalties: 4% per month on any unpaid tax amount after one month from the due date. Up to 300% cumulative penalty if non-compliance continues over time. 2. Business Disruptions Late VAT filing can disrupt business operations. The FTA may flag non-compliant businesses, leading to increased scrutiny and audits. This can affect the company’s reputation and may result in additional financial burdens due to increased administrative and legal costs. 3. Legal Consequences Consistent non-compliance with VAT regulations can lead to further legal actions, including business license suspension or restrictions on conducting trade within the UAE. In severe cases, authorities may take legal action against the company’s directors or owners. 4. VAT Refund Delays If a company is eligible for a VAT refund, failing to file returns on time can delay the refund process. Businesses rely on these refunds for cash flow management, and any delay can create financial strain. 5. Increased Risk of Audits Companies with a history of late VAT filings or non-compliance are more likely to be audited by the FTA. Tax audits can be time-consuming, costly, and may lead to further fines if discrepancies are found. How to Avoid Late VAT Filing To prevent unnecessary fines and disruptions, businesses should implement best practices for VAT compliance: 1. Mark Important Deadlines Ensure that you are aware of your VAT filing deadlines and set reminders well in advance. Missing deadlines due to oversight is a common mistake that can be avoided with proper planning. 2. Maintain Accurate Records VAT filing requires accurate financial records, including invoices, purchase receipts, and tax calculations. Keeping these documents organized will make the filing process smoother and reduce errors. 3. Automate VAT Calculations Using VAT-compliant accounting software can help businesses automate VAT calculations, reducing the risk of errors and ensuring timely submission. 4. Work with a VAT Consultant Hiring a professional tax consultant can help businesses stay compliant with VAT regulations. Consultants provide expert advice, handle VAT filing, and ensure that all returns are submitted on time. 5. Plan for VAT Payments Ensure that you have sufficient funds set aside to pay your VAT liability on time. Delayed payments not only attract penalties but also affect cash flow and business operations. Final Thoughts Timely VAT filing is not only a regulatory requirement but also a critical factor in maintaining a strong financial position in the UAE. Late submissions can result in significant penalties, business disruptions, and legal complications. By staying organized, leveraging technology, and seeking expert advice, businesses can ensure compliance and prevent unnecessary financial strain. Maats Accountants and Consultants will help you with hassle-free VAT filing in Dubai, ensuring that you stay on track and avoid penalties. With our professional guidance, you can focus on running your business while we take care of your VAT compliance. Compliance is the cornerstone of a successful business in the UAE!

tax

Grace period—to update information in tax records

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Grace period – To update information in tax records GRACE PERIOD Starting on 1 January 2024 & Ending on 31 March 2025 Registrants are required to inform the Federal Tax Authority within 20 business days of the occurrence of any event that might require the amendment of information related to their tax records kept by the FTA. Failing to comply it, attracts the administrative penalties. A grace period is implemented to encourage the registrants to update their records with the FTA, in which registrants will not be imposed administrative penalties that update the information during the grace period starting on 1 January 2024 and ending on 31 March 2025.Administrative penalties already imposed for failing to update information by the registrants during the period from 1 January 2024 until the implementation of the grace period will be reversed. Registrants are not required to contact the FTA to obtain a reversal of the administrative penalty, as this will be done automatically. Where the registrants have settled the administrative penalty, the result of the reversal is that the reversed administrative penalty amount (refund) shall be added back to the persons’ tax account within 90 days from the decision to approve the refund of the administrative penalties. Registrants are required to inform the FTA of any event that might require the amendment of information related to their tax record kept by the FTA, including the following changes:Name, address and email address. Trade license activities. Legal entity type, partnership agreement for unincorporated partnerships and articles of association or its equivalent. Nature of the business of the registrant. The address from which any business is conducted by the registrant. New trade license of the newly opened branch. Change in business address. VAT/Excise Tax registered person to update records within the prescribed timelines before attempting to register for Corporate Tax. Registering for Corporate Tax with the incorrect details and failing to correct the information within the prescribed timelines Administrative Penalties: Failure of the registrant to inform the Authority of any circumstance that requires the amendment of the information pertaining to its tax record kept by Authority is: AED 5,000 for the first time AED 10,000 in case of repetition Failure of the person to inform the Authority of any case that may require the amendment of the information pertaining to his tax record kept by Authority is: AED 1,000 for each violation AED 5,000 in each case of repeated violation within 24 months from the date of the last violation

small business relief in uae
tax

Small Business Relief in the UAE

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Small Business Relief In The UAE The provisions of the Corporate Tax Law shall apply to Tax Periods commencing on or after 1 June 2023. The Corporate Tax Law includes a specific relief for small Businesses Who can elect for small business relief Any eligible Taxable Person with Revenue below or equal to AED 3,000,000 in a relevant Tax Period and all previous Tax Periods that end on or before 31 December 2026 can elect to be treated as having no Taxable Income in that period, and will not be obliged to calculate its Taxable Income or complete a full Tax Return Revenue threshold To elect for Small Business Relief, an eligible Taxable Person’s Revenue must be below or equal to AED 3,000,000 for the relevant Tax Period and all previous Tax Periods. They will need to keep records of their Revenue to demonstrate their eligibility for the relief   How to elect for Small Business Relief First register with the FTA for Corporate Tax and obtain a TRN Elect for the relief through the filing of a simplified Tax Return Election must be made in each Taxable Period Once the Tax Return for the relevant Tax Period has been submitted with no election, there would be no possibility to claim this benefit at a later stage Who is not eligible for Small Business Relief If business is a member of a Multinational Enterprise that operate in more than one country having a total consolidated group revenue of more than AED 3.15 billion and are required to prepare a Country-by-Country Report under the UAE’s Country-by-Country Reporting legislation Qualifying Free Zone Persons who already benefit from a 0% Corporate Tax rate on their Qualifying Income What if elected for Small Business Relief Required to register for Corporate Tax Can file a simplified Tax Return No Corporate Tax to pay Can carry forward unutilized Tax Losses and Excess Interest Expenditure from previous Tax Periods and not from the relevant Tax Period Must comply with the Arm’s Length Principle Not required to maintain transfer pricing documentation Rules on Exempt Income do not apply Restriction to Tax Periods Small Business Relief will be available for : Tax Periods that begin on or after 1 June 2023, and End before or on 31 December 2026 Records required to be kept to demonstrate Revenue Under the Corporate Tax Law, all Businesses are required to maintain records and documentation that support the information provided in a Tax Return or in any other document to be submitted to the FTA and Enable the Taxable Person’s Taxable Income to be readily ascertained by the FTA Examples of documents which need to be kept includes (but is not limited to) Bank statements Sales ledgers Invoices or other records of daily earnings, such as till rolls Order records and delivery notes Other relevant Business correspondence Implications for Resident Persons that are VAT registered Small Business Relief is a Corporate Tax relief. It does not change the Resident Person’s compliance requirements for VAT or any other purpose in any way. This means that while some Taxable Persons can benefit from Small Business Relief for Corporate Tax purposes and therefore have simplified Corporate Tax compliance requirements, their VAT compliance requirements will continue as before   Implications on General Interest Deduction Limitation Rule If a Business has Net Interest Expenditure carried forward from a previous Tax Period, this will be carried forward to future Tax Periods, and can be utilised in future Tax Periods in which the Business does not elect for Small Business Relief. However, the Tax Periods in which Businesses elect for Small Business Relief will continue to be counted for the purposes of limiting the carry forward to ten subsequent Tax Periods from the Tax Period in which the Net Interest Expenditure was disallowed. The limitation on the deductible Net Interest Expenditure shall not apply where the Net Interest Expenditure for the relevant Tax Period does not exceed AED 12,000,000 Other points Permanent Establishments of Non-Resident Persons in the UAE would be eligible for the Small Business Relief, if the Double Taxation Agreement in force includes provisions dealing with non- discrimination of a Permanent Establishment based on the OECD Model Tax Convention or the UN Model Double Tax Convention

corporate tax penalties
Corporate Tax Penalties

Penalties For Violations Related To Corporate Tax Law

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Penalties For Violations Related To Corporate Tax Law (Applicable from 1 March 2024) No. Description of Violation Administrative Penalty (AED) 1. Failure to keep the required records and other information One of the following penalties shall apply: 1. 10,000 for each violation. 2. 20,000 in each case of repeated violation within 24 months from the date of the last violation. 2. Failure to submit the data, records and documents related to Tax in Arabic to the Authority when requested 5,000 3. Failure to submit a deregistration application within the timeframe 1,000 in case of late submission of the application and on the same date monthly, up to a maximum of 10,000 4. Failure to inform the Authority of the amendment of the information pertaining to Tax record One of the following penalties shall apply: 1. 1,000 for the first violation. 2. 5,000 in each case of repeated violation within 24 months from the date of the last violation. 5. Failure of the Legal Representative to provide notification of their appointment within the specified timeframes, in which case the penalties will be due from the Legal Representative’s own funds 1,000 6. Failure of the Legal Representative to file a Tax Return within the specified timeframes, in which case the penalties will be due from the Legal Representative’s own funds 1. 500 for each month, or part thereof, for the first twelve months. 2. 1,000 for each month, or part thereof, from the thirteenth month onwards. 7. Failure to submit a Tax Return within the timeframe 1. 500 for each month, or part thereof, for the first twelve months. 2. 1,000 for each month, or part thereof, from the thirteenth month onwards. 8. Failure of the Taxable Person to settle the Payable Tax 1. A monthly penalty of 14% per annum, for each month or part thereof, on the unsettled Payable Tax amount from the day following the due date of payment and on the same date monthly thereafter. 9. The Registrant submits an incorrect Tax Return 500, unless the Person corrects his Tax Return before the expiry of the deadline for the submission of the Tax Return according to the Corporate Tax Law. 10. The submission of a Voluntary Disclosure by the Taxable Person in relation to errors in the Tax Return, Tax Assessment or tax refund application A monthly penalty of 1% on the Tax Difference, for each month or part thereof, to be applied as of the date following the due date of the relevant Tax Return, the submission of the Tax refund application, or the Notification of the Tax Assessment and until the date the Voluntary Disclosure is submitted. 11. Failure of the Taxable Person to submit a Voluntary Disclosure in relation to errors in the Tax Return, Tax Assessment or tax refund application 1. A fixed penalty of 15% on the Tax Difference. 2. A monthly penalty of 1% on the Tax Difference, for each month or part thereof 12. Failure of a Person subject to Tax Audit, his Tax Agent or Legal Representative to offer facilitation to the Tax Auditor in violation of the provisions of Article (20) of the Tax Procedures Law, in which case the penalties will be due from the Person’s, Legal Representative’s or Tax Agent’s own funds, as applicable 20,000 13. Failure of a Person to submit, or late submission of a Declaration to the Authority, as required in accordance with the provisions of the Corporate Tax Law 1. 500 for each month, or part thereof, for the first twelve months. 2. 1,000 for each month, or part thereof, from the thirteenth month onwards. 14. Failure of the Taxable Person to submit a Tax Registration application within the timeframe 10,000

first tax period of juridical persons
Corporate Tax

First Tax Period Of a Juridical Person

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The Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Business applies to Tax Periods commencing on or after 1 June 2023. 1 .First tax period of Juridical persons established under the Commercial Companies Law For tax periods beginning on or after June 1, 2023, the Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses is applicable. 1. First tax period of Juridical persons established under the Commercial Companies Law • If the first Financial Year of a newly incorporated company formed under the Commercial Companies Law or other legislation like Free Zone regulations begins from its date of incorporation, if it is not less than 6 months nor more than 18 months, there is no need to apply to the Federal Tax Authority to change the Tax Period. • Subject to certain restrictions, a Taxable Person must apply to the Federal Tax Authority in order to modify the start and end dates of their Tax Period or to utilize a different Tax Period, as long as it is not shortened to less than six months or prolonged to more than eighteen months. • According to the Commercial Companies Law, this can generally result in one of three outcomes for a recently incorporated business: 1. Its initial fiscal year lasts for twelve months, or 2. Its first fiscal year spans six to twelve months, or 3. Its initial fiscal year lasts for 12 to 18 months. In all of the aforementioned cases, the first Tax Period under the Corporate Tax Law will begin on or after June 1, 2023, when the first Financial Year begins. • The different thresholds outlined in the Corporate Tax Law, such as the Revenue level for Small Business Relief, are not prorated whether the first Tax Period is greater or shorter than a 12-month period. The General Interest Deduction Limitation Rule’s de minimis barrier, which is currently set at AED 12 million, is the only exemption. 2.The initial tax term for a non-resident individual who has a permanent establishment in the United Arab Emirates Where a Non-Resident Person has a Permanent Establishment existed at 1 June 2023, the first Tax Period will be its first 12-month Financial Year commencing on or after 1 June 2023. However, the first Tax Period of such Person cannot be less than 6 months or more than 18 months. The first Tax Period of the Permanent Establishment of the Non-Resident would be as above, despite the following principles which apply in relation to when a Permanent Establishment is recognized as such for Corporate Tax purposes: Where the Permanent Establishment exists by virtue of a fixed place of Business in the UAE, then for Corporate Tax purposes, such Permanent Establishment would only be treated as having come into existence once it has been operational for six months from the start of Corporate Tax, subject to the provisions of any applicable Double Taxation Agreement. Thus, such Permanent Establishment would only be considered as existing on 1 December 2023 (because six months have passed to indicate permanence), but with effect from 1 June 2023 subject to the provisions of any applicable Double Taxation Agreement. Alternatively, where the Permanent Establishment exists by virtue of a Person habitually exercising an authority to conduct Business or Business Activity on behalf of the Non-Resident Person (dependent agent situation), then the Permanent Establishment is considered to exist on 1 June 2023 (i.e. because it was operational when Corporate Tax was implemented). 3. A resident’s first tax period under efficient management and supervision in the United Arab Emirates The first tax period will be the financial year or a portion of it, starting on or after June 1, 2023, in cases where a juridical person is incorporated, otherwise established, or recognized under the applicable laws of a foreign jurisdiction but is a resident person due to their effective management and control in the United Arab Emirates. Prior to or during the First Tax Period, cessation • The expiration of a license or the absence of a valid license does not, by itself, constitute cessation of business; dissolution, liquidation, or other termination of a Taxable Person’s business or business activities during its first Tax Period does not affect the Taxable Person’s obligation to register for Corporate Tax; that is, a Taxable Person is still required to register for Corporate Tax even if the cessation occurs after the start of the first Tax Period. • In these situations, a Taxable Person must nevertheless file an application for tax deregistration within three months after the deregistration triggering event. Application deadlines for tax deregistration in cases when an individual stops operating their business prior to or during the first tax period • The first Tax Period will end on the cessation date if a Taxable Person stops conducting business during the first Tax Period. Such an individual must deregister within the allotted time frame, which is three months from the date of discontinuation. • A taxable person must register before applying for tax deregistration, and they must be sure to register in advance to give themselves enough time to meet the tax deregistration deadline. If this is not done, there may be administrative sanctions. At MAATS Auditors and Consultant Group, we are a trusted team of Auditors and Consultants in Dubai, providing comprehensive Auditing Services in Dubai tailored to meet the needs of businesses across various industries. As a leading audit company in Dubai, we combine expertise and integrity to deliver accurate financial insights and compliance solutions. Being a reputed audit and accounting firm in Dubai, we ensure that our clients receive end-to-end support in maintaining transparency and meeting regulatory requirements. Whether you need an experienced auditing consultant in Dubai or a reliable audit firm in Dubai, MAATS Auditors and Accountants is your go-to partner for professional excellence.

corporate tax in UAE for natural persons
Corporate Tax

Corporate Tax In UAE For Natural Persons

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The provisions of the Corporate Tax Law shall apply to Tax Periods commencing on or after 1 June 2023.  Where a juridical person has more than one License, the License with the earliest issuance date shall be used. Resident Person • Non-Resident Person with a Permanent Establishment in the UAE • Business Activity deriving a total Turnover in excess of AED 1 million ( Excludes turnover derived from Wage, Personal Investment, Real Estate Investment ) Scope of Tax A natural person can be either a Resident Person or a Non-Resident Person. natural person residing in the UAE and conducts Business  in the UAE, is considered to be a Resident Person and, therefore, a Taxable Person for Corporate Tax purposes. When a natural person resides outside the UAE, that is having a home in another country, becomes a Resident Person for Corporate Tax purposes if conducts Business or Business Activities in the UAE On the other hand, in general terms, where a natural person is considered a Non- Resident Person, such natural person would only be subject to tax from their Business or Business Activities conducted within the UAE Residence for Corporate Tax purposes is not determined by physical residence in the UAE, whether by virtue of citizenship or a residency visa. Implication of Double Taxation Agreement If the natural person has not invoked the application of a Double Taxation Agreement, any natural person conducting Business in the UAE will be a Resident Person for purposes of the Corporate Tax Law. By implication, in the absence of a Double Taxation Agreement, a natural person who has a Permanent Establishment in the UAE by virtue of a fixed place through which carries on Business in the UAE, will be treated as a Resident Person for UAE Corporate Tax purposes. Where a natural person resides in a country that has an applicable Double Taxation Agreement with the UAE, and as a result of the application of that Double Taxation Agreement the natural person is not resident in the UAE but has a Permanent Establishment in the UAE, he/she will be a Non-Resident Person and taxable in the UAE in relation to his/her Permanent Establishment. Where no Double Taxation Agreement is applicable to the position of the natural person, a natural person cannot be a Non- Resident with a Permanent Establishment in the UAE. Instead, he/she would be considered as a Resident Person Turnover Business or Business Activities conducted by a natural person in the UAE are subject to Corporate Tax if the total Turnover from such Business exceeds AED 1 million within a calendar year. Total Turnover is the sum of all the income before any costs are deducted. Exclusions from Corporate Tax For a natural person, income from the following categories is not considered as arising from Business and is disregarded when determining the total Turnover and not subject to Corporate Tax, regardless of the amount: 1.Wage  Wage, received from the employer is not subject to Corporate Tax. Thus, salary or other form of remuneration received by a natural person as an employee from employer would not fall within the scope of Corporate Tax. 2.Personal Investment income Personal Investment income is not subject to Corporate Tax when derived by a natural person from investment activity conducted in personal capacity that is neither conducted through a Licence or requiring a Licence from a Licensing Authority, nor considered as a commercial business 3.Real Estate Investment income Real Estate Investment income is not subject to Corporate Tax when derived by a natural person if it is related to the selling, leasing, sub-leasing, and renting of land or real estate property in the UAE that is not conducted through a Licence nor requiring a Licence from a Licensing Authority.  Calculation of Turnover  A natural person’s registration obligations for Corporate Tax start as soon as the total Turnover exceeds the AED 1 million threshold. The natural person can subsequently elect to apply Small Business Relief in the relevant Tax Period, where the relevant conditions are met.  Tax Period  The Tax Period of a natural person who conducts a Business or Business Activity that is subject to Corporate Tax, shall be from 1 January until 31 December. The first potential Tax Period for a natural person is the 2024 Gregorian calendar year.  The Tax Registration process for Corporate Tax An application to register for Corporate Tax can be made on the EmaraTax portal. A natural person who is already registered for Value Added Tax or Excise Tax can use their existing login details. A natural person that has not previously registered with the FTA will be required to create new login credentials the first time he/she accesses the EmaraTax portal. Key information and documentation requirements for Tax Registration purposes A natural person who is required to register for Corporate Tax must submit a registration application along with the relevant supporting documentation to the FTA. Contact details – telephone number, physical address and email address Passport (a copy of the photo page to be uploaded with the application) Emirates ID (a copy of the front and back of the Emirates ID to be uploaded with the application) Sole establishment details and Licence details in relation to the Business and Business Activities conducted, if any (a copy of each to be uploaded with the application) Value Added Tax, or Excise Tax registration details ( Not Mandatory) Bank account details (Not Mandatory) Once registered, he/she will be issued with a separate Tax Registration Number for Corporate Tax purposes. This Tax Registration Number will be similar to their existing Tax Registration Number for Value Added Tax and/or Excise Tax, but the last digit will be different from their Tax Registration Number(s) for Value Added Tax and/or Excise Tax. Persons not registered for Value Added Tax and Excise Tax Natural persons who are not subject to Value Added Tax or Excise Tax but are within the scope of the Corporate Tax will be required to register for Corporate Tax purposes. Obligations after

ifza free zone business setup, ifza dubai, maats consultants
free zone business setup

A Comprehensive Guide to Registering a Company in IFZA Dubai

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The International Free Zone Authority (IFZA) offers a dynamic and business-friendly environment for entrepreneurs looking to establish their presence in the United Arab Emirates (UAE). IFZA distinguishes itself as a highly desirable choice for establishing businesses due to its streamlined processes, flexible business packages, and strategic location. Whether you’re an SME, freelancer, or a large corporation, IFZA caters to diverse business needs.  IFZA offers entry into a diverse array of industries and permits complete foreign ownership, rendering it an appealing prospect for global investors. Its unwavering dedication to promoting expansion has transformed IFZA into a hub for innovation, trade, and economic progress within the UAE. Type of Licenses in IFZA Within the jurisdiction of the International Free Zone Authority (IFZA) in the United Arab Emirates (UAE), a diverse array of licenses caters to various business activities. These licenses encompass. Trading License: This license allows businesses to engage in the buying and selling of goods within IFZA and internationally. Industrial License: Businesses involved in manufacturing, processing, and assembling can obtain this license to operate within the free zone. Service License: Service-oriented businesses like consultancy, marketing, and other professional services can apply for this license. General Trading License: This license permits businesses to trade in a broader range of goods, including those that require special approvals. Freelancer Permit: Ideal for individuals providing professional services as freelancers, such as writers, designers, and consultants. E-commerce License: This license is for businesses engaged in online trading activities, including selling products and services through digital platforms. Media License: For businesses involved in media-related activities like publishing, broadcasting, and content creation. Branch License: Companies wishing to open a branch of an existing entity within IFZA can apply for this license. Consultancy License: Suitable for businesses offering specialized consulting services. Holding License: Designed for holding companies that wish to hold and manage assets, shares, or other investments. Education License: Applicable to institutions providing educational services, including training and development programs. Healthcare License: For healthcare service providers, including clinics and medical facilities. Benefits of Company Setup in IFZA Dubai Relocating your business to the United Arab Emirates (UAE) and setting up in the International Free Zone Authority (IFZA) brings a host of compelling benefits: Prime Dubai Location IFZA’s strategic central location in Dubai ensures swift access to key business hubs and global transportation networks, making it an ideal choice for businesses seeking international connectivity. UAE Government Tax Benefits IFZA offers significant tax advantages. Businesses operating in this free zone enjoy a 0% corporate and personal tax rate, along with exemption from the 5% VAT. Additionally, currency regulations and import/export tariffs do not apply, providing a tax-efficient environment. Diverse Business Activities IFZA grants businesses the flexibility to operate across various sectors, encompassing trading, consultancy, media, technology, and more, allowing them to leverage their expertise and interests. Networking Opportunities IFZA’s company formation facilitates extensive networking opportunities, enabling entrepreneurs to connect, share experiences, and gain insights from fellow business owners. Government Support New entrepreneurs receive robust support from UAE government entities. Access to round-the-clock helplines and email assistance ensures guidance for navigating the business landscape in Dubai. Full Foreign Ownership and Streamlined Banking IFZA’s free zone status allows for 100% foreign ownership, eliminating the need for local sponsors. Moreover, IFZA simplifies the often cumbersome process of opening a bank account, reducing paperwork and administrative hurdles. Option for LLC Structure IFZA distinguishes itself by offering the option to establish a Limited Liability Company (LLC). This structure shields personal finances from business liabilities, enhancing financial security for companies. This added layer of protection is a compelling reason to choose IFZA for your business setup. Procedures for Acquiring a UAE Residence Visa Through An IFZA Company Securing a UAE residence visa through an IFZA (International Free Zone Authority) company encompasses a series of steps and prerequisites. It’s vital to recognize that UAE visa regulations are subject to alterations, underscoring the importance of seeking the latest guidance from IFZA or a qualified UAE immigration specialist. Below is a broad overview of the procedural framework: Company Formation in IFZA: Begin by establishing a company in IFZA, selecting the appropriate business activity, and obtaining the necessary business license. Office Space and Tenancy Agreement: If your business activity necessitates a physical office space, secure one within the IFZA free zone and sign a tenancy agreement. Initial Approvals: After registering your company, you will need to obtain initial approvals from relevant authorities, including IFZA. Visa Application Submission: Prepare and submit a visa application for yourself and any eligible family members through IFZA’s visa processing department. Medical Examination: Undergo a medical examination at a UAE government-approved medical center, which typically includes a health check and a blood test. Security Clearance: Obtain a security clearance from the UAE government Emirates ID Application: Apply for an Emirates ID card, a mandatory identification card for residents in the UAE. Status Adjustment: During this process, your visa status will be changed from a tourist or visit visa to a residence visa. Visa Stamping: Once your residence visa is approved, it will be stamped in your passport, confirming your legal residency status in the UAE. Insurance and Fees: Buy health insurance as required by UAE law for all residents. Pay the necessary visa fees and deposits. Visa for Dependents: If you are sponsoring family members, you will need to obtain entry permits for them and get their residence visas stamped. Visa Renewal: Keep track of your residence visa’s expiration date and renew it before it expires to maintain your legal residency status in the UAE. Exit and Re-entry Visas (if needed): If you plan to travel outside UAE during your residence visa validity, apply for exit and re-entry permits as necessary. Required Documents for IFZA Company Registration To initiate your company setup in IFZA Dubai, the following documents are necessary: Passport Copy. Digital passport photo. Application form. Emirates ID and Visa Copy for UAE residents. Relevant third-party approvals, if applicable. Start Your IFZA Free Zone Company Formation With Maats Consultants Now that you have a

corporate tax registration in UAE, corporate tax registration dubai, corporate tax 2023
Business & Strategy

Requirements For Registration, Deregistration & Filing Returns of UAE Corporate Tax

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If you’re an expat with those grand business ambitions and a penchant for the Middle East, then consider establishing a free zone company in Dubai! A free zone opens a gateway to a world of unprecedented advantages and incentives, making it an appealing option for businesses looking to expand or set up operations in the region. Excited to know about the array of benefits these zones have to offer? Let’s explore! 100% Foreign Ownership: One of the most attractive facets of establishing a Free Zone Company in the UAE is the provision for 100% foreign ownership. This exceptional policy liberates international investors from the constraints often associated with shared ownership. By eliminating the need for local partners or sponsors, these zones offer an environment where global entrepreneurs can confidently shape their enterprises. Get Tax Exemptions Free Zone entities enjoy substantial tax benefits, including zero corporate and personal income taxes for a specific period, usually ranging from 15 to 50 years, depending on the Free Zone. Customs Duty Benefits: Companies within Free Zones benefit from customs duty exemptions on imports and exports. This paves the way for businesses to engage in more cost-effective and efficient cross-border transactions. Simplified Import and Export Procedures: By simplifying customs procedures, bureaucratic complexities get eliminated, resulting in a seamless flow of goods across borders. This advantage significantly reduces the time and resources otherwise spent navigating intricate customs regulations. Great Infrastructure and Facilities: These zones boast state-of-the-art amenities, including modern office spaces, well-equipped warehouses, and top-tier communication networks. Such exceptional infrastructure accelerates the setup and expansion of businesses, Business Setup in UAE made easy:  Setting up a Free Zone Company in the UAE is straightforward and relatively quick, with minimal paperwork and fewer regulatory obstacles. Geographic Advantage Positioned at the crossroads of major global trade routes, UAE’s Free Zones benefit from a highly strategic location that serves as a gateway to both regional and international markets. Repatriation of Profits Businesses can repatriate 100% of their profits and capital, ensuring a seamless flow of funds back to their home country. No Currency Restrictions There are no currency restrictions within Free Zones, enabling businesses to transact in various currencies without limitations. Supports a wide range of Business Activities UAE Free Zones cover a diverse array of industries and sectors, allowing companies to choose the one that aligns with their expertise and business model. Intellectual Property Protection Robust intellectual property laws and regulations safeguard businesses’ patents, trademarks, copyrights, and trade secrets. Hire a Talented Workforce It offers a diverse and skilled labour pool, making it easier for companies to find qualified employees to support their operations High-Quality Lifestyle The UAE’s modern lifestyle, world-class amenities, and multicultural environment make it an attractive destination for expatriate employees. Overall, establishing a Free Zone Company in the UAE provides a favourable business environment with a range of incentives that can significantly contribute to a company’s growth, expansion, and success.

corporate tax services in Dubai
Corporate Tax

Introduction to Corporate Tax – 2023

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Corporate Tax in Dubai from 1st June 2023 The UAE government issued a new decree regarding the implementation of Corporate Tax services in Dubai on 09 December 2022. The Corporate Tax in Dubai Law is effective for financial years starting on or after 1 June 2023. The new tax regime is introduced to further strengthen UAE’s position as a global business hub and achieve its strategic objectives to aid development and transformation. Also, the corporate tax law intends to meet international standards of the tax system and avoid tax evasion and harmful tax practices. It is essential for businesses in UAE to understand the concepts of the updated tax policies. What Is Corporate Tax? Corporate tax in Dubai is a form of direct tax imposed on the profit or net income of corporations and other business entities in the UAE which is commonly called Corporate Income Tax or Business Profits Tax. Corporate Tax in Dubai requires businesses to pay a certain percentage of their profit as taxes. Who Should Pay Corporate Tax? UAE companies and other juridical persons that are incorporated or effectively managed and controlled in the UAE Natural persons who conduct a Business or Business Activity in the UAE as specified in a Cabinet Decision to be issued in due course Non-resident juridical persons that have a Permanent Establishment in the UAE All businesses with a taxable profit of more than 375,000 AED are subjected to corporate tax. The rate of corporate tax is 9% of the net profit made by the businesses. UAE has intended to support small businesses and start-ups with a ‘0’ % tax if the net profit is up to 3,75,000 AED. Corporate Tax Exemptions In UAE Businesses that exceed the profit threshold of 3,75,000 AED are expected to pay corporate tax in UAE. However, certain types of business or income are exempt from corporate tax requirements. Individuals are not subject to UAE corporate tax. Personal income is exempted from corporate tax Corporate does not apply to foreign investors who do not conduct business activities in UAE Free zone businesses that comply with the regulatory requirements will continue to enjoy corporate tax incentives Capital gains and dividend income received by UAE companies from their qualifying shareholdings Profits from qualifying intragroup transactions and restructurings Corporate Tax in Dubai Rates As per the Ministry of Finance, the percentage of corporate tax is as follows: 0% for taxable income up to AED 375,000 9% for taxable income above AED 375,000 0% for qualifying income that meets the qualifying free zone income 9% for taxable income that does not meet the qualifying income definition MAATS Services in Corporate Tax Since the announcement, corporate tax services in Dubai has created a little hassle among businesses and professionals. MAATS, the best accounting firm in Dubai helps businesses comply with the new corporate tax system by providing support and guidance to smoothly adapt to the updated tax policies. We have professional services in corporate tax registration, corporate tax planning, corporate tax advisory services, and corporate tax accounting. Our team of expert and experienced tax consultants offers regular updates, clears all queries, and takes care of any complications while you focus on your business.

Emaratax in UAE, Maats consultants
VAT

Launching EmaraTax In UAE

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The Federal Tax Authority of UAE is to launch EmaraTax, a new integrated platform on 5 December 2022 to further digitalise tax administration and provide a better experience for taxpayers in managing their tax obligations. EmaraTax in UAE will be a major milestone in the tax system which is being launched after a series of assessments and consultations. The move to EmaraTax in UAE will start from Wednesday 30 November, end of the day and will be available for use on 5 December.   A New and Better Tax Platform EmaraTax in UAE will enhance the ability to administer taxes better and enable taxpayers to manage taxes in a simple, faster and transparent way. As a new tax platform, EmaraTax in UAE will integrate with important government entities; the UAE Central Bank and national technology-based programs including UAE PASS to update user experience. This coincides with the national digital agenda to utilize emerging technologies to build a solid digital infrastructure that helps individuals and the business community of the UAE. EmaraTax is easy to navigate and offers self-help options and assistance. EmaraTax in UAE will soon be available on mobile as well. The key features of EmaraTax are: Enhanced user experience Integrated user services Aligned to the UAE digital strategy Smart app   Easy To Use, Easy to Administer EmaraTax in UAE is to improve the users’ accessibility to FTA’s services, tax payments and obtain refunds. The new online platform also improves FTA’s ability to administer taxes with better, faster decision-making and earlier engagement with taxpayers. This integrated platform will not only help taxpayers but tax agents, legal representatives, foreign missions and diplomats, customs bodies and verification agencies. Once live, taxpayers will benefit from the upgraded and feature-rich online platform designed to revolutionise the way taxes are being managed. Also, the FTA will continue to launch additional services and features in phases, including an EmaraTax application for mobile phones. The FTA is dedicated to ensuring every taxpayer has an opportunity to understand the key features of EmaraTax in UAE. Taxpayers can join one of the daily EmaraTax in UAE webinars organized by the FTA in November to share details of EmaraTax. FTA has also launched a microsite with information about using EmaraTax, educational videos and FAQs. Important information about EmaraTax will be sent directly to taxpayers via email as well. FTA will be releasing more information about the features of EmaraTax and how the UAE is planning a transition to the new system. Some Key Facts About UAE Emaratax 300+ users involved in designing the services 60% re-engineering processes, i.e., 180 processes rebuilt from the ground up 199 services online – 84 more than the current platform offering an innovative user experience 12 new integrations with external systems enabling a range of new and easy functionalities   FTA has consistently improved its services to simplify taxation processes. In April, FTA launched a ‘whistle-blower’ programme to prevent tax violations and evasion. The whistle-blower programme allows FTA to receive reports from individuals on cases of tax evasion, tax-related fraud and violations of tax rules. The reports are verified by FTA authorities and monetary rewards are granted to the informants when certain conditions are met. In September, a paperless tax refund system was introduced by the UAE government for tourists visiting the country, eliminating the need to retain receipts. Through this initiative, electronic invoices were generated that allow visitors to claim VAT refunds.

company setup in UAE
Business & Strategy

Types of Business Licenses in UAE

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Business Licenses in Dubai Dubai has been a global business hub for years allowing every category of business to establish and flourish. Business setup in UAE is a convenient and straightforward process and does not take a long time to complete. A crucial step to Business setup in UAE is choosing a business activity and obtaining a business license to start operations. Any company of any category requires a business license to operate in UAE. The requirements to obtain a license are different for various businesses depending on their category. Some major types of business licenses available in Dubai are: Commercial license Professional license Industrial license Commercial License The UAE government issues a commercial license to individuals/companies involved in buying and selling goods. A commercial license allows you to conduct trading activities inside and outside UAE. Depending on the specific business activity, there are different types of commercial licenses. To conduct such trading activities in UAE Mainland, Offshore or Free zones, one has to obtain a commercial trading license. Major activities that come under to get Commercial Licenses for Business setup in UAE are: Import and export activities Sale of electronic products Supply of brokerage services Real estate-related services Sale of construction materials Steps To Obtain a Commercial License Investors have to meet certain conditions to acquire a commercial business license for business setup in UAE. The investor must determine the type of business activities, primary form of operations and also the location to start the company. You can get it by following the steps: Select a business form and activities that correspond to the commercial license’s requirements Prepare the company’s Memorandum and Articles of Association, enlisting the tasks to be done Obtain a VAT number and register the company Make payments associated with business registration and issuance of commercial license Professional License A professional license is issued to individuals/corporations to conduct services of any kind. It is provided for business activities such as consulting, auditing and accounting, design, tourism advice, study, and other professional services based on ability or talent. Activities that come under professional license are: Artisanship Carpentry Consultancy services Medical services Printing and publishing Beauty salons Computer graphic design service Repair services Security services Document clearing, etc Inventive engineering Steps To Obtain a Professional License Make a clear description of the activities undertaken with a professional business license Appoint a local service agent to carry out all the legal formalities to obtain a professional license Get initial approval from the DED for the appointment Reserve a name for your business, make the payments and then submit all the required documents to the DED for approval Industrial License An industrial license is granted for commercial activities of industrial nature such as manufacturing or refining petrochemicals. The industrial trade license in the UAE. To have an industrial license, the business requires to have a physical warehouse inside the nation. An industrial license is granted by the Department of Economic Development (DED) Dubai. Industries that fall under the category are: Bread manufacturing and food industries Textile manufacturing The casting of metals industries Equipment and engine manufacturing Manufacture of petroleum products Paper manufacturing How To Obtain an Industrial License Get initial approvals before opening a factory or making any changes to an existing factory Apply for an industrial license to the Department of Economic Development Get consent from Municipality to construct the factory Get license approvals from authorities including the Chamber of Commerce and Industry, industrial register, Ministry of Health etc. Submit the necessary documents as required by the authorities You will get an approval or disapproval within a week or two

free zone company setup, company setup in free zone, maats accountants and consultants
free zone business

How to Set Up a Free Zone Business in Dubai?

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Right now, Dubai is open to new investors from all over the world, and it is a wonderful moment to start your business in one of the UAE’s free zones. Both new and established companies have a great chance to expand thanks to the strongest marketplaces available, fair access for all investors, and investor-friendly legislation. Free zone companies can start up shop in the UAE without a local partner, unlike mainland companies, which is a major factor in drawing in a lot of investors. Due to its simple access to resources, tax advantages, and provision for 100% ownership of the business, free zone company registration has grown in popularity in the United Arab Emirates. Choosing a trade name, applying for a business license, selecting an office space, and deciding on the type of legal entity are the first steps in starting a free zone business. Obtain licenses, register your business, and obtain preapprovals. Free Zone Company Types A UAE free zone allows you to establish two different kinds of businesses. Free Zone Company (FZ Co.) or Free Zone Limited Liability Company (FZ LLC) Establishment of a Free Zone (FZE) The number of stockholders and whether they are legal or natural persons distinguish them from one another. It is possible that not all of Dubai’s free zones have the necessary regulations to establish both kinds of businesses. To find out the registration, one must verify with the authorities of each free zone. The UAE Free Zone Company Establishment Process Identify the kind of business: Choose the free zone you want to use and the kind of business you want to launch. The regulations for setting up a business in the United Arab Emirates vary depending on the free zone. Select a trade name: Once the sort of business in the UAE free zone has been determined, you must select a trade name that complies with the government’s established conventions, guidelines, and regulations. Create an office space: After completing these steps, you must find an office space to launch your business. In the free zone, one has the option of leasing office space or purchasing a handy location. Obtain approvals: In order for the license to be granted, the investor must complete the necessary paperwork and obtain authorization from various authorities. One can launch their firm after obtaining the required approvals. It will not take more than two to four weeks to finish the entire process. Obtain a business license: The investor must apply for a business license following the selection of the firm type, trade name, and business registration. Different free zones offer different licenses for different types of company operations. The UAE Free Zone Company Establishment Process Identify the kind of business: Choose the free zone you want to use and the kind of business you want to launch. The regulations for setting up a business in the United Arab Emirates vary depending on the free zone. Select a trade name: Once the sort of business in the UAE free zone has been determined, you must select a trade name that complies with the government’s established conventions, guidelines, and regulations. Create an office space: After completing these steps, you must find an office space to launch your business. In the free zone, one has the option of leasing office space or purchasing a handy location. Obtain approvals: In order for the license to be granted, the investor must complete the necessary paperwork and obtain authorization from various authorities. One can launch their firm after obtaining the required approvals. It will not take more than two to four weeks to finish the entire process. Obtain a business license: The investor must apply for a business license following the selection of the firm type, trade name, and business registration. Different free zones offer different licenses for different types of company operations. MAATS Auditors and Accountants is a trusted name among leading auditors and consultants in Dubai, providing tailored financial and compliance solutions to businesses of all sizes. As a professional audit company in Dubai, we deliver accurate and transparent auditing services in Dubai that meet the highest industry standards. Our reputation as a reliable audit and accounting firm in Dubai is built on integrity, expertise, and commitment to client success. With a dedicated team of experts, we serve as your trusted auditing consultant in Dubai, offering guidance to help you stay compliant and financially sound. Whether you are looking for a dependable audit firm in Dubai or a long-term financial partner, MAATS ensures that your business is always audit-ready and compliant with UAE regulations.

VAT Registration in Dubai
Tax & Home Loan

Value Added Tax—A complete Guide For VAT Registration in UAE

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What is Value Added Tax, or VAT? Value-added tax is an indirect kind of consumption tax applied to most suppliers of goods and services that are bought and sold. VAT is assessed at every stage of the supply chain. On January 1, 2018, Dubai’s Federal Tax Authority implemented Value Added Tax (VAT), with a 5 percent VAT rate. High-quality public services are provided by using VAT as a revenue source. Why the UAE has adopted VAT Eliminating double taxation and the sales tax structure’s cascading effects was the driving force for the UAE’s implementation of VAT. The government of the United Arab Emirates provides its citizens with a number of public services that are funded by public funds. In order for the government to continue providing high-end services to its citizens and residents in the future, VAT will be imposed as a new revenue stream. Additionally, it can assist the government in relying on sources other than oil and other hydrocarbon revenue. Requirements for VAT registration Businesses that are tax-registered and run in the free zones and on the UAE mainland are subject to VAT. If a company’s annual taxable supply and imports total more than AED 375,000, they must register for VAT in the United Arab Emirates. Companies that import and supply more than AED 187,500 annually are exempt from required registration requirements but are free to choose to register for VAT in Dubai. If a business’s expenses are above this threshold, it may choose to voluntarily register. It is advised that you register your firm under VAT since these companies are eligible for input tax deductions. VAT input and output • The VAT that is included in the cost of qualifying products or services is known as input VAT. • The VAT incorporated in the price of selling qualified products or services is known as the output VAT. VAT-free supplies Certain goods and services are exempt from VAT and are subject to zero-rate VAT charges. In general, zero-rated supplies are included in all UAE exports of products and services. In addition, zero-rated VAT applies to the construction of homes for human habitation, healthcare, and education services. 0% VAT will be applied to:  • Local supplies of certain educational and associated goods and services; • Exports of goods and services beyond the United Arab Emirates • Local providers of certain medical services • Natural gas and crude oil supplies; • Some investment-grade precious metals VAT-exempt supplies Notified financial services, residential buildings, bare land, and local passenger transport services are among the goods and services that are excluded from VAT. Certain requirements must be met in order for the aforementioned goods and services to be deemed VAT-exempt. VAT reimbursement Following their VAT registration in Dubai, Al-registered firms are required to submit tax reports that include a summary of all the transactions and sales they made within a specific taxable period. Included must be the import, export, and exempt supply documentation as well as the VAT paid or collected during transactions. This document needs to be filed and supplied based on your invoicing. Every taxpayer in the United Arab Emirates is required to submit a VAT return at least once during each tax period. VAT reimbursement Following Dubai’s VAT registration, as previously mentioned, in order to receive a VAT refund in Dubai, every company must file a VAT return. You can file a VAT return after providing the VAT return with information about sales, purchases, output VAT, and input VAT paid during the tax period. The sum of the input VAT paid to the supplier on purchases and the output VAT received from sales is known as the output VAT. The remaining amount will be VAT payable, which the taxpayer must pay to the FTA if the output VAT exceeds the input VAT. The remaining amount will be regarded as VAT refundable if the output VAT is less than the input VAT. The taxpayer may request a VAT refund in this situation. Regular VAT returns must be filed by taxable enterprises, often within 28 days of the tax period’s conclusion. UAE VAT audit FTA performs VAT audits to look at the company’s financial records and determine whether or not it is in compliance with the tax laws. The FTA selects the companies that must participate in the VAT audit in Dubai; all registered firms are exempt from this requirement. These are a few situations that could lead to a VAT audit for the company. Late VAT registration, inaccurate tax returns, a propensity to file VAT returns late, non-issuing of invoices and tax documentation, and tax evasion The FTA will typically give the taxable company five working days’ notice of the VAT audit, but if doing so would interfere with the process, the FTA will not give notice. During an audit, the taxable person is needed to provide supporting documentation and VAT return documents. In order to streamline the process, the pertinent staff members must also be present and accountable. MAATS for Dubai VAT Registration Professional tax consultants are necessary to help you navigate the VAT registration and other VAT services processes in Dubai. At MAATS, a knowledgeable staff is available to assist companies with VAT registration and all subsequent procedures. We offer excellent VAT consulting services in the United Arab Emirates at affordable prices. To assist your business in succeeding, we also provide services in corporate tax, company setup, audit and assurance, accounting, and bookkeeping.

Company setup in Dubai
Business & Strategy

Things to know about Company formation in UAE

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The UAE is such a welcoming world for any business, playing a prominent role in global trade and commerce. Many foreign investors look forward to starting company setup in Dubai as the government is supportive, total freedom for company formation, 100% trade ownership, full revenue repatriation and business-friendly taxation. Thus, the country has become a popular choice of investment globally. Registering a foreign company in the UAE Foreign businesses in the UAE normally set up a branch or a Representative office. The branch is allowed to carry out commercial activities within the UAE but Representative offices can only market their products but cannot get a profit within the UAE. Both forms of companies have to obtain a commercial registration and license, linked to the parent companies. Freezone business in UAE The seven Emirates in Dubai have free zones with special taxes, customs, and import regimes. Company setup in Dubai Free zones is the best choice to start up a business as the company can enjoy 100% foreign ownership, complete profit repatriation, 100% exemption from any income tax, visa quotas, 24/7 access and more.  There are almost 40 free zones in UAE. Also, the company registration in the free zone Is relatively simple once the documents got ready. Characteristics for free zone company formation Choose the right free zone that allows the business to expand on a wider scale. Chose the one that supports your business requirements and activities Different free zones have different rules and regulations and also the number and types of documents required, vary according to free zone and type of business activity Differences in share capital requirement in various free zones Free trading between free zones and any import/export activity without any tax or duty Mainland business in UAE Limited Liability Company setup in Dubai is the most prevalent form and the standard type of business in the UAE mainland. These Onshore companies are a popular choice for traders, professional services, and retail businesses. Onshore companies are licensed by the Department of Economic Development (DED) and governed by the UAE Commercial Companies Law (CCL). Onshore companies can take part in business activities without the restrictions of the location. Choose the business activity and an ideal location Determine the business legal structure Get a local sponsor or local service agent Get a mainland trade license Apply for relevant visas Secure an office space Sole Proprietorship When you want to operate as the sole owner of the company, then go for the sole proprietorship in which the owner will have to assume all financial responsibilities of the company. In a sole proprietorship, the business entity is owned by one individual with the trade license issued in his/her name. Unlike a UAE Mainland company which requires at least 51% of shares registered to a UAE/GCC national sponsor, a sole proprietorship is granted 100% ownership of the business entity. To successfully register for a sole proprietorship, necessary documents are to be furnished. Offshore business in UAE Offshore businesses are quick and easy to set up which makes them yet another prevalent choice of company formation in UAE. Offshore companies are international businesses offering no tax or low tax benefits.  These companies are set up with the purpose to work outside its jurisdiction. The benefits of setting up an offshore company include an opportunity to expand to the international market, a business-friendly environment, tax neutrality on your earnings, etc. One may face no or fewer complications for offshore company registration. The procedures take a few weeks to complete with the submission of required documents. No corporate tax to pay with 100% foreign ownership Hassle-free incorporation processes Lawsuit protection Protected assets Privacy Choice to issue many classes of shares Just one shareholder and one director required Start your company with MAATS Any type of business you opt for, MAATS, the best accounting services in Dubai to setup company setup in Dubai, let our experience and knowledge guide you through the procedures involved in company formation. We reduce any workload from your side so that you can sit back and relax, just furnishing the required documents and getting involved only where you have to. Get in contact with us to start your business in UAE the easiest way.

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