UAE Corporate Tax Guide: Dos & Don'ts

[JustAnotherNomad]

Long before this was announced I spoke to a friend in Dubai who spends the winters there, but as a tourist. He didn't want to become a resident, especially because he didn't like the mandatory medical exam, which he found very invasive.
He told me: "I read in the news that they have a vision to make Dubai green with lots of trees and parks. That will cost a lot of money. Where is that money going to come from? They will have to introduce taxes."
Guess he was right.
I'm sure they will introduce income tax next. Probably not capital gains tax, but income tax on local salaries.

 

[troubled soul]

Biggest problem is Corruption in Arab state...It is like open secret. Nobody want to speak about it , In monarchy It will never come into public ...In old interview, Even Sheikh Mohammed accept this by saying we lose billion every year due to corruption....

 

[EliasIT]

I enjoyed the read of this article as a supplement to the many threads around the topic. Makes good sense to collect it all in an article for noobs and not that tax wise people.

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[Checkmelater]

I don't understand why continue to open Free Zone Company. It's a non sense for me to think Free zone are equal to mainland at the moment.

 

[bountymounty]

Checkmelater said:
I don't understand why continue to open Free Zone Company. It's a non sense for me to think Free zone are equal to mainland at the moment.
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True, still I enjoy my Dubai company which I have created a few years ago. It's easier to maintain than my UK LTD and it is easier to find workarounds on various tax and asset matters. Won't release anything here, but some articles and mentor group threads have helped me alot.

 

[tellerdel]

JustAnotherNomad said:
Long before this was announced I spoke to a friend in Dubai who spends the winters there, but as a tourist. He didn't want to become a resident, especially because he didn't like the mandatory medical exam, which he found very invasive.
Click to expand...

What is so invasive about the medical test? If you fail you fail wont get a visa and cant stay. You shouldnt have any disease. In most cases you already know that you are infected and if not its good to know about it. In Germany your whole health history is saved on the profile and everyone can look it up if needed. Where is the difference?

I dont think they will sell their foundings to the chinese or russians.

 

[JustAnotherNomad]

He just didn't like the concept of essentially being forced by the government to have an x-ray scan done etc.
I can kind of understand that.

 

[karishi]

@JohnLocke thanks for the article. As with everything UAE related, things will get clearer in 2-3 years...

 

[myhand]

That's a very good write up on the new corporate tax rules in the UAE / Dubai. It's informative and well written and good for everyone not in the tax business to read.

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[thomasparra]

9% income tax with a 375k profit before tax threshold sounds ok to me. You can also deduct countless expenses (overseas travel, client meetings costs, equipment) that you can really decrease the actual tax payable amount.

Does it make as much sense to create free zone company today? How about the visas without having investing in property?

 

[uranium]

I feel that we all are wasting time here by trying to interpret a new law that is not clear.
The problem is your business activity is not on the list of qualified neither of excluded activity!
The right thing for UAE before they introduce this law, is to create a platform where I can input my license number to check if qualified or not.
But since we don't have that, I advise you all to go to professional accounting firm in Dubai, let them study your business and they will tell you exact answer.
Just make sure they are reputable.

Last edited: Aug 19, 2023

 

[FreedomSearcher]

Is it correct that income from outside UAE will not be taxed?

Can anyone confirm?

 

[uranium]

FreedomSearcher said:
Is it correct that income from outside UAE will not be taxed?

Can anyone confirm?
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This is partly true. But this is not the right question to ask.
Does my business activity qualify or not for 0% tax. = this is what you should ask.

 

[Cryptohodler]

uranium said:
This is partly true. But this is not the right question to ask.
Does my business activity qualify or not for 0% tax. = this is what you should ask.
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What about the 3 million AED turnover limit for small businesses which will still be taxed at zero ? Is it applicable to new companies set up today or to only existing companies ?

 

[sinos]

FreedomSearcher said:
Is it correct that income from outside UAE will not be taxed?

Can anyone confirm?
Click to expand...

Only goods distribution will not be taxed. Intangibles will be taxed at 9%.

 

[Bharat Bajaj]

Cryptohodler said:
Hello, if someone incorporates a new company in Dubai today, will it be eligible for the 0% tax small business exemption of 3 million AED ? or is it only applicable to existing companies ?
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Yes Its applicable to new companies as well.

 

[Cryptohodler]

Bharat Bajaj said:
Yes Its applicable to new companies as well.
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Are you a Dubai business formation consultant ? How can we contact you ? Do you have an office in UAE ?

 

[Ancova]

FreedomSearcher said:
Is it correct that income from outside UAE will not be taxed?

Can anyone confirm?
Click to expand...

As per the current information released by the government of UAE, 0% Tax is applicable if the qualified income derives from qualified activities in a qualified jurisdiction.

It is not mentioned that overseas profits are exempted.

It does not matter if the company already exists or is being opened in the future, it is the same for everyone.

But as I mentioned, it is the information which we know till today.

 

[Berti]

I think it is wrong that freezone persons are not eligible for the revenue threshold of 3 mil AED.
It is clearly regulated that only ”žqualifying“ freezone persons are not eligible.

 

[Cryptohodler]

Berti said:
I think it is wrong that freezone persons are not eligible for the revenue threshold of 3 mil AED.
It is clearly regulated that only ”žqualifying“ freezone persons are not eligible.
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True, it's unfortunate but the freezone company can opt to get taxed as a mainland company and avail of the threshold of three million AED tax free.
What I don't understand is why anyone would incorporate a freezone company anyways since they have all but lost their advantages over mainland companies.