UAE clarification of Freezone Qualifying Income
- Thread starter joffreylol
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It’s sooo funny because I’m EXACTLY in the situation︀ you mentioned just before as an example lol.
Apart from that, I see everybody talk︁ about the 9% corporate tax, but let’s remind that it’s only if you make more︂ than 375K AED profit, am I wrong?
Then everybody will just pay big salaries to︃ themself to stay below 375K AED and avoid the 9% tax. Am I wrong?
(but it seems too easy, I doubt it will last)
Apart from that, I see everybody talk︁ about the 9% corporate tax, but let’s remind that it’s only if you make more︂ than 375K AED profit, am I wrong?
Then everybody will just pay big salaries to︃ themself to stay below 375K AED and avoid the 9% tax. Am I wrong?
(but it seems too easy, I doubt it will last)
My problem is not tax rate.... biggest problem is Sharia country with monarchy.......
TV actor Amit︅ Tandon’s estranged wife held up in Dubai jail since a month
Argument with government officials︆ leads her to prison......this is not fiction stroy...it is reality.....things change very fast in dubai...she︇ came out of prison after 10 month...
Consider this lady some sort small time celebrity......news︈ paper headlines...put pressure on dubai police....that's why she released ...as they do not want negative︉ pr.....imagine yourself in this situation.....do news paper make headlines for your arrest....
Nobody is going︊ to save you if you are at wrong side of the law
TV actor Amit︅ Tandon’s estranged wife held up in Dubai jail since a month
Argument with government officials︆ leads her to prison......this is not fiction stroy...it is reality.....things change very fast in dubai...she︇ came out of prison after 10 month...
Consider this lady some sort small time celebrity......news︈ paper headlines...put pressure on dubai police....that's why she released ...as they do not want negative︉ pr.....imagine yourself in this situation.....do news paper make headlines for your arrest....
Nobody is going︊ to save you if you are at wrong side of the law
This tax will clean out some rich / quality︀ people for sure.
Why you need Dubai, if you have money for Monaco?
About lower︁ than average person this all bureaucracy (not the 9%CIT itself) will not be worth hassle.︂ Better just do Cyprus/Malta/Estonia etc.
Btw Estonia has 0% profit tax. You only pay 20%︃ when you payout dividend to yourself!
Well maybe for Russians or some average African businesses︄ men this would not change much, because they have no other options.
But if you︅ have EU passport you have more options..
I think UAE government also count that with︆ existing inflow from Ukraine and Russia they would do pretty well. Because they will pay︇ tax anyway.
Why you need Dubai, if you have money for Monaco?
About lower︁ than average person this all bureaucracy (not the 9%CIT itself) will not be worth hassle.︂ Better just do Cyprus/Malta/Estonia etc.
Btw Estonia has 0% profit tax. You only pay 20%︃ when you payout dividend to yourself!
Well maybe for Russians or some average African businesses︄ men this would not change much, because they have no other options.
But if you︅ have EU passport you have more options..
I think UAE government also count that with︆ existing inflow from Ukraine and Russia they would do pretty well. Because they will pay︇ tax anyway.
Please stick to the topic -
We are talking about taxation.
I don't see the interest at just bringing a piece of article from 2017 - As︀ a reminder, Europe confiscated asset from Russian's and I believe Russians consider this move much︁ more as a "monarchy" than what you are trying to put on the table with︂ your paper.
Let's challenge Dubai and find better place to setup with professional arguments, all︃ together 🙂 !
We are talking about taxation.
I don't see the interest at just bringing a piece of article from 2017 - As︀ a reminder, Europe confiscated asset from Russian's and I believe Russians consider this move much︁ more as a "monarchy" than what you are trying to put on the table with︂ your paper.
Let's challenge Dubai and find better place to setup with professional arguments, all︃ together 🙂 !
Before this tax....you do not need to face any government officials...just pay renewal pay...spend some time in every six months..that's it
..now you have to deal with lazy government officials........do not get me wrong but government freebie and easy money spoiled local emirati......they hardly work...95% offical are good for nothing....tax offices are also run by these guy... As you run a business you know how many issue will come for filling the tax return......any argument with official directly put you in jail...... I am not expert or professional....but this is︀ my opinion..... believe who actually live in dubai...will agree with me without any issue
..now you have to deal with lazy government officials........do not get me wrong but government freebie and easy money spoiled local emirati......they hardly work...95% offical are good for nothing....tax offices are also run by these guy... As you run a business you know how many issue will come for filling the tax return......any argument with official directly put you in jail...... I am not expert or professional....but this is︀ my opinion..... believe who actually live in dubai...will agree with me without any issue
I think his idea is that with this 9%CIT comes bunch of other responsibilities:
1. Complex compliance with 9%CIT. Not clear rules and as always no one can tell in UAE how the law works.
2. Accounting requirement
3. possible audit requirements
4. Possible tax audits by the government? If there is tax, they can check if you correctly paid tax or not..
This can be very problematic in UAE! In Sharia country..
All these risks together makes not worth hassle
1. Complex compliance with 9%CIT. Not clear rules and as always no one can tell in UAE how the law works.
2. Accounting requirement
3. possible audit requirements
4. Possible tax audits by the government? If there is tax, they can check if you correctly paid tax or not..
This can be very problematic in UAE! In Sharia country..
All these risks together makes not worth hassle
I made this comment exactly one week ago:
Wealth Tax 0.3% and inc. tax on tiny salary
The thing is, most people forget how independent and resourceful the Swiss are (I am NOT Swiss, btw and I'm NOT selling anything)
Everything is a deductible expense in Zug's company. Every.little.thing. I'm also capped at the forfait level!
What is my overall burden? Very little. There is a fair-warning doctrine in Switzerland, so I don't have to worry about tomorrow with a surprise︀ announcement.
NGL, that 0% was looking GREAT and I was willing to do it 100%.︁ I'd pocket a few extra million per year. Very appealing considering that NOBODY, NO government,︂ regardless of their promises and laws and jurisprudence will take care of their older population︃ when the time comes. This is from experience!
But now, why would I want to︄ lose the European/Swiss credibility and replace it with a "tainted" place to save a few︅ measly dollars??? Assuming I am able to even save that much...
It's like trading in︆ my hot, young 26-year-old Scandinavian supermodel costing me $4M/year for some 60-year-old below-average Middle Eastern︇ woman with 6 kids that will cost me $3.5M per year). Like WTF??? Who does︈ this? 🙄
Wealth Tax 0.3% and inc. tax on tiny salary
The thing is, most people forget how independent and resourceful the Swiss are (I am NOT Swiss, btw and I'm NOT selling anything)
Everything is a deductible expense in Zug's company. Every.little.thing. I'm also capped at the forfait level!
What is my overall burden? Very little. There is a fair-warning doctrine in Switzerland, so I don't have to worry about tomorrow with a surprise︀ announcement.
NGL, that 0% was looking GREAT and I was willing to do it 100%.︁ I'd pocket a few extra million per year. Very appealing considering that NOBODY, NO government,︂ regardless of their promises and laws and jurisprudence will take care of their older population︃ when the time comes. This is from experience!
But now, why would I want to︄ lose the European/Swiss credibility and replace it with a "tainted" place to save a few︅ measly dollars??? Assuming I am able to even save that much...
It's like trading in︆ my hot, young 26-year-old Scandinavian supermodel costing me $4M/year for some 60-year-old below-average Middle Eastern︇ woman with 6 kids that will cost me $3.5M per year). Like WTF??? Who does︈ this? 🙄
Go ahead and try this...lol. I wrote the below on Feb 2022 in relation to paying out profits as an excessive salary:
Since then on Dec 2022 they adopted GAAR under Decree︄ Law 47. See Article 50.....🙁
https://mof.gov.ae/wp-content/uploads/2022/12/Federal-Decree-Law-No.-47-of-2022-EN.pdf
So basically any excessive salary will run foul of︅ GAAR as an abusive practice designed to reduce your tax base under Article 50. You︆ may want to see what the penalties for doing so look like in UAE before︇ trying your luck. And as KPMG says also below they closed doors on those thinking︈ to use multiple companies to stay below thresholds:
"If a person with total revenue of︉ more than AED 3 million artificially separates his/her business to claim benefits under Small Business︊ Relief, it will be considered an arrangement to obtain a Corporate Tax advantage under the︋ General Anti-Abuse Rules (GAAR) set out in Article 50 of the Corporate Tax Law."
Bottom line is UAE will NO longer be the wild west playground it once was. As︌ I said ages ago on this forum the UAE is going to change once OECD︍ get on them - which they have. What UAE wishes to do tax wise is︎ irrelevant once OECD tell them what to do.
The only thing I underestimated is the️ speed of the changes. But in a dictatorship changes can happen extremely quickly as we have seen. People just need to get their head around these tax changes and stop thinking some Sheikh has your interests at heart.
Since then on Dec 2022 they adopted GAAR under Decree︄ Law 47. See Article 50.....🙁
https://mof.gov.ae/wp-content/uploads/2022/12/Federal-Decree-Law-No.-47-of-2022-EN.pdf
So basically any excessive salary will run foul of︅ GAAR as an abusive practice designed to reduce your tax base under Article 50. You︆ may want to see what the penalties for doing so look like in UAE before︇ trying your luck. And as KPMG says also below they closed doors on those thinking︈ to use multiple companies to stay below thresholds:
"If a person with total revenue of︉ more than AED 3 million artificially separates his/her business to claim benefits under Small Business︊ Relief, it will be considered an arrangement to obtain a Corporate Tax advantage under the︋ General Anti-Abuse Rules (GAAR) set out in Article 50 of the Corporate Tax Law."
Bottom line is UAE will NO longer be the wild west playground it once was. As︌ I said ages ago on this forum the UAE is going to change once OECD︍ get on them - which they have. What UAE wishes to do tax wise is︎ irrelevant once OECD tell them what to do.
The only thing I underestimated is the️ speed of the changes. But in a dictatorship changes can happen extremely quickly as we have seen. People just need to get their head around these tax changes and stop thinking some Sheikh has your interests at heart.
Still missing if︀ I move to Dubai and I use this setup I'd be tax free or not︁ I should still pay the 9% corporate tax even if I don't use the UAE︂ company?
#Bingo!
This is so perverse and devious! It essentially ERODES the personal income tax of zero!
In other words, I have a few clients who will NOT do business with a company for certain products. They want to pay into my personal account. They want me to be︀ personally liable for the products. In the UAE, I'd be up sh1ts creek without a︁ paddle! In Zug, I made this clear BEFORE incorporating and using a tax ruling and︂ because of forfait, they accepted it. It doesn't really matter, because due to forfait, I︃ pay one amount and that's that!
PS. I still book it under the Zug business︄ though, so Zug and CH still gain a huge amount for free. And it's cheaper︅ than the 9% 😉
This is so perverse and devious! It essentially ERODES the personal income tax of zero!
In other words, I have a few clients who will NOT do business with a company for certain products. They want to pay into my personal account. They want me to be︀ personally liable for the products. In the UAE, I'd be up sh1ts creek without a︁ paddle! In Zug, I made this clear BEFORE incorporating and using a tax ruling and︂ because of forfait, they accepted it. It doesn't really matter, because due to forfait, I︃ pay one amount and that's that!
PS. I still book it under the Zug business︄ though, so Zug and CH still gain a huge amount for free. And it's cheaper︅ than the 9% 😉
Monaco?
Do you know what F1 drivers, football players and athletes that move to Monaco have in common?
They all work OUTSIDE Monaco.
If you have a business with staff employed and you aren't some crypto kid or investor that receive passive income Monaco isn't an option because you can't work in Monaco without attracting CIT.
Which are?
Malta? 5% but you'll live a miserable life
Cyprus? 15% total tax
Estonia? 20% total tax (which︀ will be raised to 22% in 2024)
That's what i am talking about.
Your wealth︂ is in the company, not in your pocket and look i not disagree necessarily with︃ that approach but at some point you'll want to take out money from the company︄ and then you'll be taxed.
Also there are some businesses where you want to take︅ out money from the business as fast as possibile so a tax-fre/low tax residency VS︆ medium-high tax residency make a LOT of difference to the bottom line?
I wonder why people want to︈ kill themselves in such a "good country". cit. Martin Everson
Do you know what F1 drivers, football players and athletes that move to Monaco have in common?
They all work OUTSIDE Monaco.
If you have a business with staff employed and you aren't some crypto kid or investor that receive passive income Monaco isn't an option because you can't work in Monaco without attracting CIT.
Which are?
Malta? 5% but you'll live a miserable life
Cyprus? 15% total tax
Estonia? 20% total tax (which︀ will be raised to 22% in 2024)
That's what i am talking about.
Your wealth︂ is in the company, not in your pocket and look i not disagree necessarily with︃ that approach but at some point you'll want to take out money from the company︄ and then you'll be taxed.
Also there are some businesses where you want to take︅ out money from the business as fast as possibile so a tax-fre/low tax residency VS︆ medium-high tax residency make a LOT of difference to the bottom line?
I wonder why people want to︈ kill themselves in such a "good country". cit. Martin Everson
Nope! My TOTAL wealth is in my name (+70%). Not the company!
The company has its own wealth which is the business it generates now in Zug.
BTW, the business has NOTHING to do with Switzerland. I purchase in Asia and ship to Latin America and other Asian countries. Some EU buyers too. I can do this from any CBI island or Monaco.
Yeah! Good luck with that! I think you missed the part of the forfait. rof/%
The company has its own wealth which is the business it generates now in Zug.
BTW, the business has NOTHING to do with Switzerland. I purchase in Asia and ship to Latin America and other Asian countries. Some EU buyers too. I can do this from any CBI island or Monaco.
Yeah! Good luck with that! I think you missed the part of the forfait. rof/%
That's correct.
See here our latest post:
https://www.offshorecorptalk.com/th...fication-of-freezone-qualifying-income.41469/
"3. BECOMING CREATIVE"
General Manager average salary is 60000 AED + another 10000 AED︀ allowance per month - total 840000 AED per Year in addition to the 375000 AED︁ Tax Free Profits.
So in total even assuming someone qualifies for 9% Corporate Tax can︂ make the first 331000 USD Tax Free!
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We are working on some Blog Article︃ but I share you here already a table we did created - calling it "worst︄ case tax".
As much as I like this forum but this thread is just bashing︅ the UAE - and it's even more funny if you know the numbers.
Just as︆ a hint before you are looking at the below table - certain banks do some︇ kind of enhanced KYC when you cross 4M AED turnover - we see this from︈ clients less then 10% per year - it's questionnable why everyone is now acting as︉ if they would make 100M AED turnover, 15M AED profit and having a 7 figure︊ tax bill to pay.
Yes, yes... frame it again that we at DLS Dubai can't︋ be neutral because of our business nature but as I mentioned earlier - "keep the︌ church in the village"
"Worst Case Tax" Table
So if you are making 10M AED turnover you can get out 2.6M AED tax free which is 700K USD (!) tax free with an effective tax rate of 3.9% assuming 9% CT for 99% of FZCO's - which we still see different and elaborate in our blog article soon why! The salary is industry standard and no bulls**t with unrealistic salary - so even if they limit the salary this is still valid - not to mention every 2nd client has his wife employeed as well etc.
But yes let's move all now to Monaco and get hammered with︀ 5000-10000 EUR rent for a 30m2 apartment to "just" have 0% income tax - which︁ we have in Dubai anyway - in combination with 20-30% CT.
See here our latest post:
https://www.offshorecorptalk.com/th...fication-of-freezone-qualifying-income.41469/
"3. BECOMING CREATIVE"
General Manager average salary is 60000 AED + another 10000 AED︀ allowance per month - total 840000 AED per Year in addition to the 375000 AED︁ Tax Free Profits.
So in total even assuming someone qualifies for 9% Corporate Tax can︂ make the first 331000 USD Tax Free!
-------------------------------------------------------------------------------------------------------------------------------
We are working on some Blog Article︃ but I share you here already a table we did created - calling it "worst︄ case tax".
As much as I like this forum but this thread is just bashing︅ the UAE - and it's even more funny if you know the numbers.
Just as︆ a hint before you are looking at the below table - certain banks do some︇ kind of enhanced KYC when you cross 4M AED turnover - we see this from︈ clients less then 10% per year - it's questionnable why everyone is now acting as︉ if they would make 100M AED turnover, 15M AED profit and having a 7 figure︊ tax bill to pay.
Yes, yes... frame it again that we at DLS Dubai can't︋ be neutral because of our business nature but as I mentioned earlier - "keep the︌ church in the village"
"Worst Case Tax" Table
So if you are making 10M AED turnover you can get out 2.6M AED tax free which is 700K USD (!) tax free with an effective tax rate of 3.9% assuming 9% CT for 99% of FZCO's - which we still see different and elaborate in our blog article soon why! The salary is industry standard and no bulls**t with unrealistic salary - so even if they limit the salary this is still valid - not to mention every 2nd client has his wife employeed as well etc.
But yes let's move all now to Monaco and get hammered with︀ 5000-10000 EUR rent for a 30m2 apartment to "just" have 0% income tax - which︁ we have in Dubai anyway - in combination with 20-30% CT.
you pay corporate tax on profits
when you send profits to your personal account it becomes a dividend
don't you pay some tax on a dividend as a Switzerland's resident?
did you sign a lump sum tax agreement with canton maybe, that covers that?
when you send profits to your personal account it becomes a dividend
don't you pay some tax on a dividend as a Switzerland's resident?
did you sign a lump sum tax agreement with canton maybe, that covers that?
Hows different having freezone company than having company in Malta? I don't understand. Explain men in simple words.
If you have real business with real employees hows Dubai freezone better than Malta, Cyprus, Estonia?
Also you cannot touch gambling and similar stuff in Dubai.︀
If you have real business with real employees hows Dubai freezone better than Malta, Cyprus, Estonia?
Also you cannot touch gambling and similar stuff in Dubai.︀
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