The Federal Tax Authority will institute a 9 percent business tax in 14 days. Something completely unprecedented in the UAE. The Federal Tax Authority has announced that an individual can be considered a business if their income or assets above specified thresholds. Changing company property to personal property is, therefore, not recommended.
In the United Arab Emirates, only residents who earn more than AED 5,000 in a year are liable to income tax. In addition, the UAE has established certain hefty sanctions for business owners who either fail to file for corporation tax or fail to produce accounting. Therefore, do not put this task on the back burner.
Free zones in the United Arab Emirates are required to pay the same 9% corporate tax as on-shore businesses.
Here’s some accounting advice to be in UAE that won’t cost you a penny:
There is a 9% corporate tax rate for on-shore businesses, a 9% corporate tax rate for free-zone businesses that engage in transactions with on-shore businesses, and a 0% corporate tax rate for free-zone businesses that conduct 100% of their business overseas. You must still file your tax returns with the FTA and explain “why and how” you are exempt from paying any taxes.
In a nutshell, starting of 1 June 2023, everyone is required to reveal their financials to the authority. If accountants find a significant discrepancy in the books in 2022 and 2023 or 2024, business owners could face fines or even more severe penalties.
In two weeks, we will have begin the process of making the United Arab Emirates the world’s most reliable financial centre.
To read our article about “How to get Dubai’s exclusive deal for Pakistani drivers” click here.
