Tag: Corporate Tax

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Understanding Violations and Penalties in Corporate Tax Regulations

Understanding Violations and Penalties in Corporate Tax Regulations.
Table of Violations and Administrative Penalties Annexed.

Table of Violations and Administrative Penalties Annexed.

Recognizing the trust you place in us as your partners, we emphasize the critical importance of keeping abreast of regulatory stipulations that significantly influence your business undertakings. In light of this, we wish to highlight a pivotal dimension of the Cabinet Decision which pertains to Violations and Administrative Penalties related to Taxation of Corporations and Businesses. This Decision holds paramount significance for entities operating under this framework and necessitates meticulous attention.

Under these regulations, businesses are legally obligated to uphold certain standards and practices, ensuring adherence to protocols that sustain transparency, responsibility, and conformity with legal requirements.

Recent developments have witnessed authoritative actions taken against businesses found to be in contravention of the regulations. We advocate in the strongest terms that all our esteemed clients proactively undertake measures to guarantee the meticulous upkeep of the indispensable records, thus preventing any potential consequences that might arise. Enumerated below are some of the Violations and administrative penalties:

Table of Violations and Administrative Penalties Annexed to Cabinet Decision No. (75) of 2023 on Violations Related to the Application of Federal Decree-Law No. (47) of 2022 on the Taxation of Corporations and Businesses

Disclaimer:

Please be advised that the fine amounts specified in the register are subject to revisions based on any modifications made to the schedule of contraventions by the UAE authorities. These revisions may arise due to updates in regulatory requirements, policy amendments, or other factors deemed necessary by the UAE Government.

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Navigating Corporate Tax Registration in the UAE: A Comprehensive Guide

Navigating Corporate Tax Registration in the UAE: A Comprehensive Guide
Tax registration in the UAE

Tax registration in the UAE

In the ever-evolving realm of business activities, the process of corporate tax registration holds immense significance for entities functioning in the United Arab Emirates. Regardless of whether you are an existing registrant for VAT or Excise Tax, or registered in the Mainland or any free zone, or if you are stepping into the realm of taxation for the very first time, gaining a comprehensive grasp of this procedure is of paramount importance. Within this all-encompassing guide, we will accompany you through the essential aspects that shape the path of corporate tax registration.

1. Leveraging Prepopulated Information for a Swift Start

For those already registered under VAT or Excise Tax, the corporate tax registration process is streamlined. The Federal Tax Authority (FTA) prepopulates your Emara Tax profile with essential details derived from your existing VAT or Excise Tax information. This proactive measure not only saves time but also ensures accuracy in your tax profile.

2. Verifying and Updating Your Emara Tax Profile

Take the time to meticulously review the prepopulated information in your Emara Tax portal. This is your chance to align your tax profile with your current business status. Should any discrepancies or changes be necessary, promptly update the information to reflect your business’s accurate standing.

3. Document Preparedness: A Prerequisite for Success

Prepare for the corporate tax registration journey by assembling all necessary documents ahead of time. This proactive approach reduces delays during the application process and ensures a smooth submission. Essential documents may include your trade license copy, the authorized signatory’s passport or Emirates ID copy, the company’s Memorandum and Articles of Association, and the Declaration of Eligibility.

4. Tailoring the Registration Form: A Step Toward Compliance

If your business is not registered for VAT or Excise Tax but is required to register for corporate tax, meticulous completion of the registration form is paramount. Populate the form with accurate and comprehensive details, as this information forms the foundation of your tax compliance.

5. Application Submission and the FTA Review

Once your application is submitted, the FTA embarks on a thorough review process. During this phase, the FTA examines your application’s accuracy and adherence to regulatory standards. Be prepared to provide additional information or documentation if requested, ensuring transparency and thoroughness throughout the review.

6. Estimated Processing Time and the Possibility of Extension

The FTA has set an estimated processing time of 20 business days for the completion of the review process post-application submission. However, should the FTA require further information or clarification, the processing time may be extended. This reflects the FTA’s commitment to conducting comprehensive reviews to maintain the integrity of the process.

7. Achieving Approval: A Sign of Compliance

Upon the successful review of your application, you will receive an email notification indicating the approval of your corporate tax registration. This milestone signifies your company’s adherence to regulatory standards and its official integration into the UAE’s tax framework.

8. The Corporate Tax Registration Number: A Badge of Compliance

With approval comes the issuance of your corporate tax registration number. This code is more than just an identifier; it symbolizes your business’s commitment to fiscal responsibility and compliance within the UAE’s tax landscape.

About Us:

At MS, we understand the intricate landscape of corporate tax registration in the UAE. Our expertise in taxation and regulatory compliance empowers businesses to navigate the complexities of the Emara Tax platform with confidence. We are committed to providing you with the knowledge and tools needed to ensure seamless integration into the UAE’s tax framework.

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For inquiries, consultation, or assistance with corporate tax registration and other taxation matters, feel free to contact us at Click Here

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Disclaimer:

The information provided in this blog is intended for informational purposes only and should not be considered legal or financial advice. Every business’s situation is unique, and it’s recommended to consult with professional advisors or authorities for personalized guidance on corporate tax registration in the UAE.

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Understanding the UAE’s New Tax Service Fees: A Private Clarification

Overview of the New Tax Service Fees:

Overview of the New Tax Service Fees:

Staying updated with the latest regulatory changes is crucial for businesses in the evolving landscape. In the United Arab Emirates (UAE), the government has recently announced new tax service fees, effective from June 1st. These fees aim to streamline tax administration processes and ensure efficient service provision. In this blog post, we will delve into the key details of the announcement and its potential implications for businesses operating in the UAE.
The UAE’s Federal Tax Authority (FTA) has introduced new tax service fees that businesses should be aware of. These fees cover various tax-related services provided by the FTA. It is important to consult the FTA’s official guidelines for the most up-to-date and accurate information on these fees.

Conclusion:

The UAE’s new tax service fees, implemented on June 1st, aim to improve tax administration and provide high-quality services to taxpayers. By staying informed and proactive, companies can navigate these changes smoothly, contributing to their long-term growth and success in the UAE’s dynamic business environment.

How MS Can Help You?

At MS, we understand the complexities of accounting and taxation in the UAE and are well-equipped to assist businesses in navigating these changes smoothly.
As an experienced accounting and taxation consultant, our team at MS can provide guidance and support in understanding and complying with the new tax service fees. We can help businesses assess the specific fees applicable to their operations by keeping up to date with the FTA’s official guidelines. Our experts can also assist in reviewing internal processes to ensure efficiency and accuracy in tax-related matters, minimizing the risk of penalties or additional fees.
We are committed to helping businesses adapt to the changing tax landscape in the UAE, providing expert guidance and support tailored to their specific needs.

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NEW! Corporate Income TAX in the UAE

The UAE Federal Tax Authority (FTA) has announced on 31 January 2022 the new federal Corporate Tax that will effectively start on or after June 1st, 2023. It’s a turning point moment in UAE’s rich history 50 years of successful track record, integrating with global trade and best practices, unfolding an efficient tax framework, while minimizing compliance burden on businesses and making them more transparent.

While the law has not yet been issue, the FTA has publicly announced the key principle and policy choices for the new regime which states:

  • Businesses with financial years starting on 1st of July 2023 and ending on 30th of June 2024, will become subject to CT from 1 July 202.
  • For a business that begins its annual financial year on 1 January 2023 and ends on 31 December 2023, the UAE CT will apply from 1 January 2024 (which is the first financial year the business will begin on or after 1 June 2023).

Further information on UAE CT regime will be issued towards the middle of the year.

The CT will be applied to everyone (individuals and legal persons) carrying out business activities in the UAE, under a commercial license, including entities operating in the banking sector. Except for the following:

  • Entities engaging in the extraction of natural resources.
  • Free zone entities, which will continue to benefit from tax incentives offered to them at the time, as long as all regulatory requirements are complied with. However, the FTA will be releasing more information about the inquiry of registration and filing a CT return.

The corporate tax will be applied to the net profit of a business which is the amount reported in the Financial Statements prepared in accordance with international accounting standards. There will be a progressive tax rate that will be applicable on the following:

  • 0% tax for businesses with income profit UP TO AED 375,000. That is to support small businesses and startups.
  • 9% tax for businesses with income profit ABOVE AED 375,000
  • According to pillar two of the OECD’s base erosion and profit shifting project, this rate might be different for large multinational companies that meet specific criteria.

The objective for this resolution is to cement UAE’s Position as a world-leading hub for businesses & investment. Meeting international standards for tax transparency and preventing harmful tax practices. And accelerating the UAE’s development & transformation to achieve strategic objectives.

Key features that the FTA indicated:

  • CT is not applicable to an individual’s income from employment, real estate, investment in shares, or other personal income not related to UAE trade or business.
  • No CT will be applied for foreign investors that do not carry out any form of business in the UAE.
  • No withholding tax will be applied on domestic and cross-border payments.
  • No CT will apply on capital gains and dividends received by a UAE business from its qualifying shareholdings.
  • No CT will apply on qualifying intragroup transactions & restructurings.
  • Foreign tax will be allowed to be credited against UAE corporate tax payable.
  • Generous loss transfer and utilization rules will be available to business.

Tax rates is one of the most competitive and lowest rates in the world, with great flexibility built in. And as obscure as it may sound, this Is actually a good move that will benefit big companies, tax data will help them demonstrate their financial performance, and will get them to start financing. Full fine print details yet to be announced by the FTA. For any clarifications contact us here.

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UAE Welcomes International Tax Regimes to Combat Base Erosion and Profit Shifting

OECD announced a new two-pillar plan towards international tax reforms during the recent virtual G20 Tourism Ministers Meeting on 1st July 2021. This comes after 130 countries and jurisdictions agreed to sign up for a global corporate minimum tax rate proposal that the G-7 presented in June. The two-pillar plan – the outcome of negotiations coordinated by the OECD for much of the last decade – aims to ensure that large Multinational Enterprises (MNEs) pay tax where they operate and earn profits while adding much-needed certainty and stability to the international tax system. The world has taken a big step toward sweeping changes to global taxation as 130 countries endorsed setting a minimum rate for corporations along with rules. This deal would probably come into effect in 2023.

UAE has welcomed the statement issued by the Organization for Economic Cooperation and Development and the G20 (G20/OECD) on the Inclusive Framework on Base Erosion and Profit Shifting. This will enhance the Nation’s efforts to strengthen ties with various world countries regarding financial and economic cooperation. The UAE is one of the 130 member countries that have joined the consensus.

UAE is actively participating in various initiatives and discussions to improve the transparency of the international tax environment and the coherence of the global tax system. The successful implementation of economic substance and transparency rules proves the Nation’s ability to adapt its practices to meet international standards. This remarks a new beginning for the Nation to expand global parallel connections and secure global tax stability.

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Global Agreement on Tax Reform

    Through the ages, governments everywhere have grappled with different ways to design and implement taxes. But the recent announcement by the G7 Finance Ministers is significant in that governments are coming together to coordinate and synchronise their systems of corporate taxation.

    The proposals involve fundamental changes to international tax rules – they will mean allocating more taxing rights of the largest and most profitable multinational enterprises to where their customers are; and implementing an internationally-agreed minimum effective corporate tax rate for large multinational enterprises (MNEs) wherever they operate. While the agreement is the first step in a long process before it can become a reality.

    The G20, as expected, endorsed the OECD Inclusive Framework political agreement on the key components of international tax reform under Pillar One (reallocation of profits to markets) and Pillar Two (global minimum tax). The G20 has urged the OECD Inclusive Framework to address remaining issues and policy design elements, and prepare a detailed implementation plan, by the next G20 Finance Ministers meeting on 15-16 October 2021.

    What will these changes mean for UAE?

    For now, it is too early to say. What we know for sure is that the international rules for corporate taxation will change, and all jurisdictions will need to adjust their tax systems and rules. As for the revenue impact, it will depend on the parameters being set, the rules to be made, and crucially, how different governments and businesses respond to them.

    UAE’s overall competitiveness has never been based on taxation alone. It’s about ensuring a conducive environment for businesses and entrepreneurs to thrive as an international hub. Trust, lifestyle and geography are ultimately what makes UAE an attractive place for substantial economic activities. UAE will be keen to be seen as part of the global system rather than a tax haven.

    Thoughts:

    Countries needs to support a multilateral consensus-based solution that is anchored on sound economic principles, promotes tax certainty, and ensures a level playing field across all jurisdictions.

    However, the new rules should not inadvertently weaken the incentives for businesses to invest and innovate. Otherwise, countries will all be worse off, fighting over share of a shrinking revenue pie.