Corporate Tax Law
The UAE Corporate Tax Law is complex and requires professional interpretation and compliance with UAE corporate tax regulations and guidelines.
As the UAE corporate tax system develops and matures, businesses must comply with UAE corporate tax laws and regulations in fulfilling their tax obligations correctly and on time.
We provide full-fledged corporate tax services that comply with the Corporate Tax Law in UAE to ensure corporations limit risks and ensure regulatory approval.
This service page describes how widely the law applies, what it requires of businesses, key aspects of compliance, tax planning opportunities, and how HH and Hale supports you throughout this process.
What Is UAE Corporate Tax Legislation?
A UAE Corporate Tax Law is the regulatory system that applies in the United Arab Emirates in relation to the taxation of businesses in the country. The UAE Corporate Tax Law was established through Federal Decree-Law No. 47 of 2022, concerning the Taxation of Corporations and Businesses, which applies to financial years beginning on or after 1st June 2023.
The law establishes:
- Who is subject to corporate tax
- How taxable income is Calculated
- Applicable rates and exemptions
- Filing and compliance obligation
- Penalty for non-compliance
The aim of the legislation is to bring the UAE in line with global tax norms and facilitate economic development and foreign investments, as well as tax fairness.
We are helping the business to understand how the above-mentioned act will apply to them and comply with it.
Who Must Comply with the UAE Corporate Tax Law?
Corporate tax obligations is applicable to all different types of taxable entities, which include:
- Mainland companies registered with the economic
- Free zones with taxable activities not qualifying for exemption
- Branch offices of foreign companies
- Partnerships and other legal entities engaged in business activities
- Taxable persons according to the law
Even entities with zero taxable income may still have reporting obligations. Failure to register and file correctly may result in penalties, increased audit risk, and adverse regulatory outcomes.
Our team also review your business legal structure, activities and financial profile to identify your specific tax compliance under UAE Corporate Tax Law.
Important Elements of the UAE Corporate Tax System
Taxable Income and Tax Rates
Under the law:
There is a standard rate of 9% which is applicable on income above AED 375,000
For income under AED 375,000, the tax rate is 0%
Certain free zone entities may be qualified for the 0% corporate tax rate based on certain criteria.
The law applies a two-tier structure that supports small and medium businesses while maintaining a competitive environment for larger enterprises.
Our tax experts assist you in understanding tax rate thresholds, exemptions, and requirements to qualify for tax benefits.
Qualifying Free Zone Persons (QFZPs)
Free zone companies are also eligible for tax relief as long as they are considered Qualified Free Zone Persons. To maintain as such, companies must:
- Meet substance requirements
- Generate qualifying income
- Adhere to operational and economic substance rules
Incorrect classification or lack of adequate substantial content may impact tax benefit. We assist in evaluating and sustaining free zone business tax status to preserve their tax treatment under tax law.
Taxable Presence and Nexus Rules
The UAE tax law has described the principles of a taxable presence, taking physical presence and business activities into consideration. The following conditions are to be satisfied by a taxable person:
- Register with the Federal Tax Authority (FTA)
- File returns through the prescribe process
- Report income generated within and, in some cases, outside the UAE.
Understanding the nuances with taxable presence and nexus rules is essential to avoid unintentional non-compliance.
Our team assesses your corporate footprint and advises on filing obligations under the law.”
Company Tax Compliance Requirements
Compliance with the UAE Corporate Tax Law requires several continuing obligations:
Registration with the FTA
Taxable persons must obtain a Tax Registration Number (TRN) by registering with the Federal Tax Authority.
Accurate Tax Return Filing
Annual corporate tax returns must be prepared, computed and submitted through the online website provided by the FTA.
Maintenance of Records
It is required that the financial and tax records business entities be maintained for a prescribed period (usually seven years). These accounts include the following:
- Audited financial statements
- Support schedules for taxable income and adjustments
- Transfer Pricing Documentation (as applicable)
Timely Payment of Taxes
Tax due has to be paid within the statutory deadline. Otherwise, a penalty and interest will be incurred as a consequence under the tax laws.
We manage registration, return preparation, filing, and record keeping to ensure secure compliance and minimize tax risk.”
Tax Planning and the UAE Corporate Tax Law
Although ensuring tax compliance is obligatory, strategic planning can assist the business in enhancing tax treatment. The major tax planning considerations relate to:
Optimisation of Entity Structure
Determining the appropriate corporate structure can influence your tax treatment, particularly when dealing with international business operations or free zone companies.
Expense and Deduction Strategy
Carefully planning of deductible expenses and timing of recognition can ensure minimization of tax liabilities without compromising tax compliance.
Transfer Pricing Planning
The regulation requires that such transactions between related party be done on an arm’s length principle. HH and Hale provides assistance on issues pertaining to transfer pricing strategies, documentation, and implementation.
Loss Utilisation and Carry forward
The corporate tax provision allows eligible loss carry forward subject to conditions. Loss utilization planning enhances tax efficiency.
Our tax experts will combine planning and compliance to enable you to meet your business requirements and tax requirements.
Common Corporate Tax Challenges and How We Solve Them
Tax liabilities often bring complex at times. The common challenges include:
Complex Accounting Adjustments
Matching accounting books with tax provisions can be complex and requires expertise. We integrate accounting and tax provisions to ensure that they are in sync.
Substance and Free Zone Qualification
Compliance with substance requirements and satisfaction with qualifying income criteria, as incentives for Free Zone companies, may not be easy to achieve. Our team is here to ensure compliance in documentation and operations.
Transfer Pricing Documentation
Compliance with transfer pricing is important in cross-border structures. We provide documentation and strategies that reflect local and international tax expectations.
Audit Readiness & Response
Corporate tax audits require preparedness and clear records. We assist in audit readiness work and in representation in case of FTA audits.
Our experts provide practical solutions for your business realities.
Penalties for Non-Compliance
The UAE Corporate Tax Law provides for penalties for:
- Late registration
- Late return filing
- Late payment
- Incorrect or incomplete filings
- Lack of maintenance of adequate records
Penalties can include financial penalties or administrative measures. Proactive compliance management is critical to avoid these risks.
The HH and Hale system also provides mechanisms such as checking lists, deadline management, and reviewing processes that ensure that your business avoids penalty risk.
How HH and HALE Helps the Business?
Our corporate tax expertise encompasses all manner of business tax preparation and consultation, including the following:
Corporation Tax Registration
We help your business registration through the FTA’s online tax portal and ensure that your business classification and timely TRN issuance.
Tax Return Preparation and Filing
We prepare and submit corporate tax returns that reflect compliant income computation and legal adjustments.
Tax Planning and Optimisation
Our advisors can help you implement plans aligned with your commercial strategies and regulatory compliance.
Audit Support and Representation
Should the FTA issue query or initiate audits, we represent your interests professionally and constructively.
Record Maintenance and Documentation
We help establish compliant systems for financial and tax documentation.
Our services are both strategic and operational, enabling businesses to focus on growth while we manage tax obligations with competence and integrity.
Industry Sectors We Serve
HH and HALE‘s clients come from a variety of sectors, including:
- Professional Services
- Trading and Manufacturing
- Real estate and construction
- Technology & Startups
- Healthcare and education
- Logistics and Supply Chain
There are sector-specific taxation considerations, and our services are tailored to suit this dynamic.
Why Choose HH & HALE?
Businesses prefer to conduct their operations with HH and HALE due to the following reasons that:
- In-depth knowledge of UAE Corporate Tax Law
- Practical, business-oriented tax guidance
- Local compliance insight with international standards
- Transparent process and clear communication
- Trusted support through FTA interactions
We are dedicated to ensuring that your business prospers in the tax environment in the UAE.
The UAE Corporate Tax Law requires all business entities operating in the UAE to comply with the regulations. If you are setting up tax readiness, tax filing, or enhancing your corporate tax strategic plan, you can consult HH and HALE for assistance.
Reach out to HH and HALE today to take care of your business tax obligations with confidence and compliance
Expert Corporate Tax Dispute Advisory in UAE
For expert corporate tax dispute services in UAE, call HH & HALE to make sure your business is ready for its corporate tax obligations and set up for tax-efficient growth.
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