https://www.khaleejtimes.com/business/corporate-tax-in-uae-free-zones-all-you-need-to-knowCorporate tax in UAE free zones: All you need to know
UAE clarification of Freezone Qualifying Income
- Thread starter joffreylol
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Hey just an update. My lawyer in New York said "again, a 1099 or a LLC owned by an individual or a foreign corporation would not be liable for tax if no operations physically in the US considering your situation. Your bank interest income is also taxed in your corporations residency country and no withholdings. Branch tax also does not apply to︀ your situation. Wyoming ownership articles of incorporation do not mention any reference to an owner︁ and your operating agreement can say your Dubai LLC if needed. "
He is the︂ tax lead partner at a decent law firm.
Have to put my anxiety aside and︃ take the plunge.
He is the︂ tax lead partner at a decent law firm.
Have to put my anxiety aside and︃ take the plunge.
That's not new information though? That's what everyone, including the lawyer I spoke to, have been saying all along?
No ECI = no US tax = no branch tax.
The risk my lawyer mentioned was that the IRS would claim that something like a meeting in the US would constitute "physical operations in the US" (ECI), and that they could get the idea "hey, maybe we can get some tax out of this guy" after seeing a 1099. If you can prove you've never even set foot on US soil, then I think one should be good. The question is how the risk would change depending on how many days one spends in the US.
Still it seems like your︀ lawyer considers that risk negligible, which is very good to know.
No ECI = no US tax = no branch tax.
The risk my lawyer mentioned was that the IRS would claim that something like a meeting in the US would constitute "physical operations in the US" (ECI), and that they could get the idea "hey, maybe we can get some tax out of this guy" after seeing a 1099. If you can prove you've never even set foot on US soil, then I think one should be good. The question is how the risk would change depending on how many days one spends in the US.
Still it seems like your︀ lawyer considers that risk negligible, which is very good to know.
I am also going to dive into this and incorporate a business in Dubai. In my case though, I will wear my financial bulletproof vest and I will set aside 9% of the profit in case there is an attempt at clawing taxes from me. I suggest we all create a piggybank with 9% labeled "9% Dubai taxes".
Let's face it, this 9% tax was NOT put into effect︀ as a BENEFIT to us or to attract more business, so it's safe to accept︁ that nothing is being done and nothing will be done for our benefit. It's better︂ to be safe than sorry. ca#"!
Let's face it, this 9% tax was NOT put into effect︀ as a BENEFIT to us or to attract more business, so it's safe to accept︁ that nothing is being done and nothing will be done for our benefit. It's better︂ to be safe than sorry. ca#"!
I'm not aware of any list on this forum which contains a list of jurisdictions with zero corporate tax. But it's not hard to find such lists elsewhere.
https://en.wikipedia.org/wiki/List_of_countries_by_tax_rates
Sort by Corporate Tax ascending. Verify findings by checking reputable sources.
Then there are places with territorial taxation or subnational divisions which have a different tax system from the country they're in.
If you have any specific questions or want to go into this in more detail, let's take it up in a separate thread. Don't want to derail this one too much.
https://en.wikipedia.org/wiki/List_of_countries_by_tax_rates
Sort by Corporate Tax ascending. Verify findings by checking reputable sources.
Then there are places with territorial taxation or subnational divisions which have a different tax system from the country they're in.
If you have any specific questions or want to go into this in more detail, let's take it up in a separate thread. Don't want to derail this one too much.
So now, after these informations even if we have only customer in Europe not any client in GCC country and we have Free Zone company we are eligible to pay the 9% corporate taxe if benefits > 100k ?
What a time to live in a desert .. thinking about some new destination lol
What a time to live in a desert .. thinking about some new destination lol
There is no sense anymore to own a free zone company, it’s same like Mainland company, you just have difficulty to open bank account now
I hope we will have more clarifications like « first 3 years you don’t have to pay anything »
EDIT : Now process to pay low tax is: Pay high salary and not exceed 375K AED benefits
For exemple I make 2.000.000 AED by a year, I’m giving a salary of 1.900.000 to myself I don’t have more than 375k benefits in my company so︀ I don’t have to pay tax right ?
I hope we will have more clarifications like « first 3 years you don’t have to pay anything »
EDIT : Now process to pay low tax is: Pay high salary and not exceed 375K AED benefits
For exemple I make 2.000.000 AED by a year, I’m giving a salary of 1.900.000 to myself I don’t have more than 375k benefits in my company so︀ I don’t have to pay tax right ?
What a mess, the only real good thing this desert had were free zones with a straightforward 0% tax environment - no question asked.
When you opened a free zone company they advertised it as a 50-year 0% tax entity guaranteed by the free zone authority and now we see this huge chaos.
UAE seems not that reliable anymore and they aren't doing anything to stop all these rumors and no sense.
You cannot pay the salary you want.︀ It has to be within certain limits and reasonable according to the standards otherwise it︁ will be seen as a way to artificially erode and decrease the tax base (it︂ is also written in the law).
When you opened a free zone company they advertised it as a 50-year 0% tax entity guaranteed by the free zone authority and now we see this huge chaos.
UAE seems not that reliable anymore and they aren't doing anything to stop all these rumors and no sense.
You cannot pay the salary you want.︀ It has to be within certain limits and reasonable according to the standards otherwise it︁ will be seen as a way to artificially erode and decrease the tax base (it︂ is also written in the law).
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