Consulting on VAT and corporate tax
Value Added Tax (VAT) was introduced in the UAE on January 1st, 2018 with the standard rate of 5% being applicable to most goods and services. Some goods and services are exempt from VAT, while others are subject to a 0% VAT rate. Zero-rated supplies include certain exports, international transportation, and healthcare services.
UAE corporate tax was introduced on June 1st, 2023.
The corporate tax bylaws are still in the process of being formulated and/or adjusted to provide additional information and guidance on the UAE Corporate Tax regime.
Understanding the features of tax regimes is crucial for businesses operating in the UAE to ensure compliance with the regulations and enhace their tax strategies.
White Square team stays updated on all recent developments to provide our clients with high-quality support.
Registration as a VAT taxpayer and corporate tax taxpayer
There are 2 main criteria for VAT registration:
- voluntary registration – when the taxable turnover reaches the threshold of AED 187,500 (approximately USD 51,050)
- compulsory registration – when the taxable turnover reaches the threshold of 375,000 AED (approximately USD 102,000)
As for the corporate tax, as a general rule, yearly profits exceeding 375,000 AED (approximately 102,000 USD) are subject to corporate tax at a rate of 9%, with a deduction of 375,000 AED from the tax base. However, certain free zone companies engaged in specific activities and meeting particular requirements may qualify for a 0% corporate tax rate.
Our team provides expert assistance with VAT and corporate tax registration
Filing of VAT and corporate tax returns
According to the regulations of the UAE Federal Tax Authority, all registered companies must adhere to VAT accounting rules to mitigate the risk of penalties.
Taxable income is calculated based on the company’s financial statements,in accordance with the UAE accounting standards and regulations.
Updating the accounts of the UAE Federal Tax Authority
Annual renewal of the taxpayer’s account with the UAE Federal Tax Authority is mandatory for all companies. Renewal is required in case of any changes in the company’s license information or incorporation documents.
