maatsca

Request a Quote

Author name: maatsca

VAT filing
VAT

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

/

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

/

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

/

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

/

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

/

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 Application to the Federal Tax Authority to change the Tax Period is not required if the first Financial Year of a newly incorporated company formed under Commercial Companies Law or other legislation like Free Zone regulations starts from its date of incorporation, if it is not less than 6 months and not more than 18 months. Application to the Federal Tax Authority is required if a Taxable Person wants to change the start and end date of its Tax Period, or use a different Tax Period, subject to certain conditions, provided that the Tax Period is not extended to more than 18 months, nor reduced to less than 6 months. This can broadly lead to one of three scenarios for a newly incorporated company under the Commercial Companies Law: its first Financial Year is a 12-month period, or its first Financial Year is a period between 6 and 12 months, or its first Financial Year is a period between 12 and 18 months In all the above scenarios, where the first Financial Year commences on or after 1 June 2023, this will be the first Tax Period under the Corporate Tax Law. Where the first Tax Period is longer or shorter than a 12-month period, there is no pro-rating of the various thresholds prescribed under the Corporate Tax Law, for example the Revenue threshold for Small Business Relief. The only exception is the de minimis threshold for the purposes of the General Interest Deduction Limitation Rule (currently set at AED 12 million). 2. First tax period of Non-Resident Person with a Permanent Establishment in the UAE 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. First Tax Period of a Resident Person with effective management and control in the UAE Where a juridical person is incorporated or otherwise established or recognized under the applicable legislation of a foreign jurisdiction but is a Resident Person by virtue of being effectively managed and controlled in the UAE, the first Tax Period will be the Financial Year or part thereof, commencing on or after 1 June 2023. Cessation before or during First Tax Period The cessation of a Taxable Person’s Business or Business Activities, whether by dissolution, liquidation, or otherwise, during its first Tax Period does not impact its obligation to register for Corporate Tax, i.e. a Taxable Person is still required to register for Corporate Tax even where the cessation takes place after the start of the first Tax Period. The expiry of a License or the lack of a valid License does not, by itself, constitute cessation of Business In such cases, a Taxable Person is still required to submit a Tax Deregistration application within the deadline of 3 months from the Deregistration triggering event. Timelines to apply for Tax Deregistration where the Person ceases Business before or during the first Tax Period Where a Taxable Person ceases their Business Activities during the first Tax Period, their first Tax Period will come to an end on the cessation date. Such a Person should deregister within the timeline prescribed, that is within 3 months from the date of cessation. A taxable Person must be registered before filing Tax Deregistration application and must ensure that they have registered in time, to allow for sufficient time to comply with the deadline for Tax deregistration. Failure to do so can result in administrative penalties.  

corporate tax in UAE for natural persons
Corporate Tax

Corporate Tax In UAE For Natural Persons

/

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

/

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

/

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

/

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

/

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.

Scroll to Top