UAE Tax Compliance Map

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The Engaging Manager from Headquarter
Ms. Anna Wang, Speak German, English and Chinese.
skype: burlinna

GLA – UAE Corporate Income Tax

GLA-AE-01

GLA Tax Entity

Is UAE corporate income tax a federal income tax? A state income tax? Or is there a federal and state income tax?
What if the federal income tax and the state income tax are levied separately or levied together?
What is the standard tax rate? What is the special tax rate?

Evershine RD:

Currently, there is no federal corporate income tax, but there are ongoing discussions between the 7 Emirates (Abu Dhabi, Dubai, Sharjah, Ras Al Khaimah, Umm Al Quwain, Fujairah, and Ajman) of the UAE for the introduction of a harmonized (federal) corporate tax.
The Emirates announced the introduction of a federal corporate tax on business profits effective for financial years starting on or after June 1, 2023.
Effective from 1 June 2023, the statutory tax rate is set to be 9% tax rate on profits above 375,000 dirhams and a 0% tax rate for taxable profits up to 375,000 dirhams.
There are no special rates or regimes at the federal level.
Each Emirates retains autonomy over anything not delegated to the national government.

The decrees in Abu Dhabi, Dubai, Sharjah, Fujairah, and Ras al Khaimah apply progressive rates on the following schedule:

• Under 1 million dirhams – 0%
• 1 million dirhams to 2 million dirhams – 10%
• 2 million dirhams to 3 million dirhams – 20%
• 3 million dirhams to 4 million dirhams – 30%
• 4 million dirhams to 5 million dirhams – 40%
• Over 5 million dirhams – 55%

In practice, however, corporate tax is currently imposed only on oil and gas producing companies, including certain petrochemical companies, and in certain Emirates, foreign banks.

GLA-AE-02

Registration

Which government unit is responsible for the collection of UAE corporate income tax?
The registration of the country’s corporate income tax status, that is, the tax certificate number application procedure, paper certificate number application? Or online account application? URL?
What is the advance certificate number for applying for this certificate number?
Do I need to use the industrial and commercial certificate electronic card to apply?

Evershine RD:

UAE businesses subject to corporate tax will need to obtain a Tax Registration Number.
Registration needs to be submitted to FTA before the Law becomes effective.
Waiting for further guidance in this respect.

GLA-AE-03

GLA Order (OD)

What is the order of UAE corporate income tax return (information flow determines tax base) and payment (fund flow)?
Pay first and then declare? Report first and then pays?
At the same time as the declaration and payment?

Evershine RD:

Same Period (SP) – Declare and pay at the same time.
Effective for financial years starting on or after June 1, 2023.
For the purposes of this tax, businesses will not be required to make advance corporate tax payments.

GLA-AE-04

Mechanism of Filing (MOF)

What is the return method for UAE corporate income tax return (information flow determines the tax base)?
Filing cycle: monthly? Every bimonthly? Every season? every half year? Per year?
Electronic filing? Manual filing? Electronic filing and manual filing coexist? If electronic filing is possible: website URL?

Evershine RD:

As only oil or gas companies and foreign banks are required to pay tax or file a return, there is no generally applicable deadline for filing.
Also, it is not clear when the returns for those entities required to file are due and whether electronic filing is available at the taxpayer’s option.
Emirates announced the introduction of a federal corporate tax on business profits effective for financial years starting on or after June 1, 2023.
For the purposes of this tax, it was announced that only one corporate tax return will need to be filed per financial period, due no later than 9 months after the financial year end and will need to be filed electronically.
No provisional tax or advance corporate tax filings will be required.

GLA-AE-05

Mechanism of Payment (MOP)

What is the funding method for UAE corporate income tax payment (funds flow)?
Payment cycle: M per month? B every bimonthly? Q every season? H every six months? A every year?
Automatically authorize deduction of ACH (that is, take the initiative of the recipient)?
Electronic remittance to EFT (that is, the payer takes the initiative)?
Bank counter payment OCT?
Or the above methods coexist?

Evershine RD:

There is no clear deadline by which tax must be paid.
Due to the limited enforcement of the tax decrees, payment deadlines will only be relevant to companies in the oil and gas production and banking industries.
Electronic payments are not required.
Emirates announced the introduction of a federal corporate tax on business profits effective for financial years starting on or after June 1, 2023.
For the purposes of this tax, businesses will not be required to make advance corporate tax payments.

VAT – UAE VAT

VAT-AE-01

VAT Tax Entity

Is UAE VAT Federal VAT? State VAT? Or is there a federal plus State VAT?
What if the Federal VAT and State VAT are levied separately or levied together?
What is the standard VAT rate? What is the special VAT rate?

Evershine RD:

VAT in the UAE is primarily governed by Federal Decree-Law No. (8) of 2017 (the “VAT Law”), issued by the President on August 23, 2017.
In the UAE, the following VAT rates apply:
Standard rate: 5%
Reduced rates: None
Other: Exemptions and zero-rate

VAT-AE-02

Registration

Which government unit is responsible for the levying of VAT in UAE?
The registration of UAE’s VAT levy status, that is, the application procedure for VAT certificate number, paper certificate number application? Or online account application? URL?
What is the advance certificate number for applying for a VAT certificate number?
Do I need to use an industrial and commercial certificate electronic card to apply?

Evershine RD:

Administrative oversight of VAT in the UAE is carried out by the Federal Tax Authority established under Federal Decree-Law No. 13 of September 26, 2016.
Article 50-54 of the Unified VAT Agreement of the Gulf Cooperation Council (GCC) provide the general framework for VAT registration.
Taxpayer persons register online through the Federal Tax Authority’s electronic services portal.
Article 6 of the Procedures Regulations provides that the Federal Tax Authority finalizes a tax registration by issuing a 15-digit Tax Registration Number (TRN).

VAT-AE-03

WWT Order (OD)

What is the order of UAE’s VAT declaration (information flow determines the tax base) and payment (fund flow)?
Pay first and then declare? First declare and then pay? At the same time as the declaration and payment?

Evershine RD:

Same Period (SP) – Declare and pay at the same time.

VAT-AE-04

Mechanism of Filing (MOF)

What is the return method for UAE VAT declaration (information flow determines the tax base)?
Reporting cycle: every month? Every bimonthly? Every season? every half year? Per year?
Electronic filing? Manual filing? Electronic filing and manual filing coexist? If electronic filing is possible: Website URL?

Evershine RD:

Under Article 64 of the Executive Regulations, the tax return of a taxable person must be filed for each tax period with the Tax Authority by the 28^th day of the month following the end of the tax period to which the tax return relates.
Article 62 of the Executive Regulations provides that the standard tax period is 3 calendar months ending on a date determined by the Tax Authority, set to align with calendar quarters based on the Gregorian calendar.
The tax return of a taxable person must be filed electronically through the electronic services portal of the Federal Tax Authority of the UAE.

VAT-AE-05

Mechanism of Payment (MOP)

What is the funding method for UAE VAT payment (funds flow)?
Payment cycle: M per month? B every bimonthly? Q every season? H every six months? A every year?
Automatically authorize deduction of ACH (that is, take the initiative of the recipient)?
Electronic remittance to EFT (that is, the payer takes the initiative)?
OCT payment at the bank counter?
Or the above methods coexist?

Evershine RD:

Under Article 64 of the UAE Executive Regulations, payment of tax due by a taxable person for any period is due by the filing deadline for the corresponding tax return.
A registered person’s VAT liability must be paid to the designated bank account of the UAE Tax Authority.
In order to make payment, the taxpayer must obtain their unique GIBAN number from their Tax Authority e-Services portal.
The GIBAN is then used as the beneficiary’s IBAN number when making the payment.
A taxpayer may have different GIBAN numbers for different taxes.

Contact Us

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Email: dxb4ww@evershinecpa.com
The Engaging Manager from Headquarter
Ms. Anna Wang, Speak German, English and Chinese.
skype: burlinna

or
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(version: 2024/07)

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