Corporate Tax Advisory Services in UAE

Corporate tax advisory services in UAE are vital for businesses navigating the evolving landscape of tax regulations. Organizations are required to comply with tax frameworks to ensure full adherence and enhance their overall tax compliance. This article provides an overview of the UAE’s corporate tax legislation, highlights the importance of tax advisors, and explains how FAR Consulting Middle East delivers premier corporate tax services to meet the unique needs of businesses

What is the Role of a Tax advisor?

Corporate tax advisors in UAE assist with the following services:

1. Tax Compliance and Reporting

Category	Details
Registration	Assisting companies with their registration process with the Federal Tax Authority to ensure timely completion and minimize the risk of delays or errors.
Documentation	Systematic gathering of financial statements and all relevant supporting documents is essential to ensure compliance and preparedness for potential audits.
Filing	It is key to ensure timely submission of income tax returns, alongside the precise computations of taxable earnings, forms the filings section. Adherence to the detailed documentation ensures compliance with the FTA guidelines and avoids penalties for late or incorrect filings.

2. Strategic Planning for Taxes

Proactive planning is essential for businesses to improve their financial position. Tax advisors assist with the following:

• Optimum Deductions: Locating expenditures that should be capitalized in order to lower the taxable income and the resultant taxes as stated below: –

• Capitalize Fixed Assets Acquisition Expenses: –Under IFRS businesses can capitalize fixed assets acquisition expenses for depreciation and amortization purposes to reduce taxable income throughout time.
• Interest expenses: Businesses can deduct thirty percent of tax-adjusted EBITDA but only after exceeding an AED 12 million threshold.
• Entertainment Expenses: –Businesses can deduct 50% of expenses that arise from client and business partner entertainment such as meals and accommodation.

• Leverage Incentives: Applying available tax credits and other legal provisions that reduce the tax liability, ensuring businesses maximize the benefits legally available to them.

Corporate Tax Incentives	Details
Research and Development (R&D) Tax Incentive	The UAE has launched an expenditure-based R&D tax incentive allowing businesses to get possible returns of 30-50% through refundable tax credits. A company may receive a refund based on its internal revenue and personnel operating within the United Arab Emirates. Businesses need to perform their eligible R&D activities within UAE domestic territory according to OECD’s Frascati Manual standards. MINISTRY OF FINANCE
Free Zone Tax Benefits	All qualifying corporate income earned by free zone businesses operating in the UAE remains tax-free if they maintain the specified compliance standards. The free zone tax benefits become available under specific requirements that combine proper free zone operations with qualifying income generation along with proper transfer pricing management.
Small Business Relief	Small businesses earning less than AED 3 million annually can benefit from tax exemptions that the UAE provides to promote new ventures. The tax exemption benefits motivate small and medium-sized enterprises to develop their operations.
Domestic Minimum Top-up Tax (DMTT)	Starting January 2025, the UAE established a domestic minimum top-up tax of 15% for large multinational companies according to OECD global minimum corporate tax agreement terms. The tax will affect any company that meets the requirement of having €750 million in minimum consolidated global revenues in two of their last four fiscal years prior to implementation.

 

• Structure Transactions: Designing any business operations such as mergers, acquisitions, or expansions in a tax favorable manner, within the confines of legal regulations while achieving business objectives.

3. Tax Audit Assistance

Complex tax compliance requires special expertise. Engaging professional Tax advisors help to make the seamless:

• Document Collection: Aggregating and sorting documents and files to ensure they are presented in a complete and understandable manner which meets the audit criteria clearly fulfills the requirements.
• Communication: Interacting on behalf of the business with tax officials, which serves to alleviate the burden placed on the business while they are actively engaging with officials.

4. International Taxation

On international taxation, Tax advisors help with:

• Cross-Border Transactions: Helping businesses to seamlessly determine foreign business operations and local taxation.
• Transfer Pricing: Making certain that intra-entity transactions in other jurisdictions are compliant with international taxation laws so as to avoid sanctions from different jurisdictions.
• Double Taxation Treaties: Using bilateral treaties to avoid paying taxes two or more for the same income and minimizing the withholding tax paid from investments.

Seek the Expert Services of FAR Consulting Middle East, a Premier Tax Consultant in UAE

To seamlessly determine taxability and ensure compliance with UAE corporate tax, businesses are advised to seek the expert services of premier Tax Consultants in UAE. Contact us today and we shall be glad to assist you. 

Frequently Asked Questions

1. Why Should You Hire a Corporate Tax Consultant?

It’s essential to engage a tax consultant in order to find your way through the numerous rules and regulations. Corporate tax consultants provide specialized services to:

• Ensure Compliance Avoid getting penalized by UAE tax authorities
• Optimize Tax Liability Identify ways to save on taxes through deductions and credits
• Strategize Financial Planning Make provisions for future expansion in a tax-efficient manner
• Manage Risks Handle potential legal issues and tax risk exposure

2. What does a Corporate Tax Audit comprise in the UAE?

A company’s tax returns review by FTA is called a corporate tax audit that includes

• Notification: A formal notification for audit is sent to Businesses by the FTA
• Document Review: Examination of financial records and tax returns
• Compliance Check: Ensure adherence to the UAE’s corporate tax laws
• Resolution: Address discrepancies and provide clarifications if needed

Maintaining accurate records for at least seven years is vital for audit readiness.

3. How Is Corporate Tax Return Filing Conducted?

The corporate tax returns filing process involves:

Financial Preparation: Compile accurate financial statements
Tax Calculation: Determine taxable income and apply the correct rate
Form Submission: File returns through the FTA online system
Payment: Pay any due tax in accordance with the submitted return

4. Are natural persons/ Individuals required to Pay Corporate Tax in UAE?

While corporate tax primarily applies to legal entities, individuals engaged in business activities with annual turnover exceeding AED 1,000,000 are also liable. This includes:

• Freelancers providing professional services
• Sole Proprietors operating unincorporated businesses

Personal income not related to business activities remains exempt from corporate tax.

 5. What Are the Key Features of the Corporate Tax Law,UAE?

UAE Corporate Tax Law key features include:

• Tax Rates: 0 percent on income up to AED 375,000, 9 percent on income above this threshold
• Taxable Persons: Applies to both resident and non-resident businesses
• Exemptions: Includes government entities and qualifying public benefit organizations
• Compliance: Mandatory registration, filing, and record-keeping requirements

6. How Does Transfer Pricing Affect Businesses in the UAE?

Transactions between related parties is known as Transfer pricing. Businesses should ensure:

• Pricing: Arm’s length principle must be applied on all transactions.
• Documentation: Maintain detailed records justifying intercompany pricing
• Compliance: Follow OECD Transfer Pricing Guidelines to prevent profit shifting

7. What Are the International Tax Considerations for UAE Businesses?

Businesses engaged in international trade must navigate:

• Double Taxation Agreements DTAs: The UAE’s extensive DTA network prevents double taxation and reduces withholding taxes
• Permanent Establishment (PE): When a business presence in another jurisdiction triggers local tax liability.
• Withholding Taxes: Ensure compliance with UAE and foreign withholding tax requirements on cross-border payments

Tax advisory services help businesses optimize their global tax position while remaining compliant with UAE and international laws.