CORPORATE TAX IN UAE
Corporate Tax in UAE
CORPORATE TAX IN UAE
Corporate Tax in UAE
Corporate Tax in UAE
Corporate Tax is a form of direct tax levied on the net income or profit of corporations and other businesses.
On 31 January 2022, the UAE Ministry of Finance announced the introduction of a federal corporate tax in the UAE that will be effective for financial years starting on or after 1 June 2023.
Generally, such taxes are computed on the accounting net profit/income of a business, after making adjustments for certain items which will be specified under the UAE Corporate Tax law.
Corporate Tax Rate in UAE will be applicable at the following rates:
UAE Ministry has announced that Corporate Tax shall be levied on taxable income/ profit at the following rate:
| Income/profit as per Financials | Tax Rate |
|---|---|
| AED 0 - AED 375,000 | 0% |
| Above AED 375,000 | 9% |
For example, if the Company earns a taxable profit of AED 400,000 in an FY, The Corporate Tax liability will be calculated as follows:
- Taxable income of AED 0 - AED 375,000 at 0% = AED 0
- A portion of taxable income exceeding AED 375,000 (i.e. AED 400,000 - AED 375,000 = AED 25,000) at 9% = AED 2,250
Will any kind of business be subject to Corporate Tax in UAE?
The tax will be applicable in all businesses including the free zones except the activity for the extraction of natural resources. No corporate tax will apply on personal income from employment, real estate, and other investments, or on any other income earned which need not have a commercial license or permit to be undertaken in UAE.
Corporate Tax in UAE
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Corporate Tax ImplementationIn the increasingly complex areas of Corporate Tax reporting, tax authority compliance, and tax planning |
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Corporate Tax AdvisoryEvery stage in business development has its financial and fiscal side, often more complex than first thought. |
Corporate Tax TrainingSPS Management Consultancies Co LLC has extensive training experience in every new Regulation |
Due Diligence Audit Services in Dubai, UAE
Due Diligence Audit Services
SPS-UAE – Professional auditors from Dubai, UAE, providing reliable due diligence audit services.
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Operational due diligence
Operational due diligence deals with the review of non-financial matters of a business, which may include insurance and risk assessment, HR practices, review of systems and processes, evaluation of the management team, etc.
Financial due diligence
Financial due diligence (FDD) is a process where due diligence is required to validate financial statements. The goal of the process is to ensure that the data shown in the financial statements matches with key information the investor needs. A successful FDD engagement reveals the red flags and exposes the deal breakers and highlights areas that appear weaker to the stakeholders.
Financial due diligence services help the buyer to assess financial risks of a potential acquisition to determine what the benefits, liabilities, risks, and opportunities are. Some of the areas specifically looked at in the analysis of FDD:
- Company history and background
- Operating effectiveness and earnings quality
- Employs efficiency and management quality
- Trends and forecasts of future financial performance
- Current staff structure and benefit assessment
Legal due diligence
Legal due diligence includes investigating any legal risks associated with the target company's rights and obligations. This issue may involve regulatory approvals, licenses, and other government-related matters.
Macro-environment due diligence
Economic-related risks and unpredictable factors that influence an organization's decision making and affect its performance and strategies. It considers:
- Economic situation
- Industry dynamics
- IT condition
IT due diligence
It is a fundamental part of the strategic planning process. IT is considered a value-adding part during the implementation of the plan. The marketing audit examines an organization's internal and external marketing environment and assesses its marketing objectives, strategies, and activities.
Production due diligence
Production due diligence records the production & distribution to ensure that they are appropriately maintained. Also, verify the logbook of machinery to confirm the effective and efficient performance.
Management due diligence
This due diligence examines the actions and tactics of the management to analyze their performance. Management audit involves the review of the organization's internal controls, policies, procedures, structures, controls, etc. to check the management efficiency or inefficiency.
Information system due diligence
It helps in analyzing the adequacy and controls in the Information Technology (IT) infrastructure. It looks for vulnerabilities and data safeguard mechanisms. These reviews may be performed in conjunction with a financial statement audit or stand-alone for enhancement and detection purposes.
CORPORATE TAX IN UAE
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