UAE Corporate Tax and Its Effect on International Businesses
Main Impact of Corporate Tax on International Companies
The UAE started its corporate tax law on June 1st, 2023. The tax rate is 9%, which is still lower than most GCC countries. The government made this move to depend less on oil and gas, and to find new ways to earn money. Mubarak Al Ketbi (MAK) Auditing always helps clients with these big changes. The start of corporate tax in the UAE made companies follow more rules and changed how business works.
International businesses have to look at both new chances and strict rules. This article shows how corporate tax changes the world for foreign businesses in the UAE.
What Does Corporate Tax Mean for International Businesses?
Before UAE made corporate tax, it was known for being tax-free. Now, there’s a new system and some things are different. Business owners and managers have a lot of questions. Here’s what’s new:
- Review and Change Tax Strategies:
International companies used to keep more profits, but now they have to check their tax plans. They must look at the new tax law and make changes. - Re-think Where You Do Business:
Some companies might look at other tax-free countries, but UAE still has many benefits. The UAE is still a smart place for global companies. - Economy Becomes More Diverse:
The government wants less focus on oil, so international firms that bring new projects and services have more opportunities. - Building Business Trust:
Companies that came to the UAE thinking there was no tax may feel worried. The UAE government works to protect these businesses from unfair rules. - Tax Treaties and Double Tax Relief:
UAE signed many double tax treaties, so businesses don’t pay tax twice on the same income. International companies should check these treaties to stay compliant.
How Can International Companies Handle These Changes?
Foreign companies can use smart plans to adjust to the new tax system. Here are some useful steps:
- Restructuring International Companies:
Change the business setup to keep tax benefits or get exemptions. - Make a Good Tax Plan:
Always have a plan. Get advice from Mubarak Al Ketbi (MAK) Auditing to understand new tax rules better. - Invest in Special Sectors:
You can get more exemptions if you invest in health, education, or other development projects in the UAE. - Take Advantage of Business-Friendly Rules:
Even with the new tax, the UAE makes it easy for global companies to grow. There’s legal help and a safe environment.
Important UAE Corporate Tax Areas for International Firms
If you run an international business in the UAE, keep an eye on these points:
- Transfer pricing rules
- Tax exemptions and reductions
- Finding your Place of Effective Management (PoEM), Permanent Establishment (PE), and Nexus
- How to register for UAE corporate tax
- Use of double tax treaties
- Setting up the right compliance framework
- Meeting tax deadlines
- Regular updates in UAE tax law
What International Businesses Need To Do
Here are some key things you should remember:
- Check your current tax plans and update them as needed.
- Study all UAE double tax treaties to avoid paying tax twice.
- Make sure your company structure fits the new tax rules.
- Keep good records to prove you’re following the law.
Work with Mubarak Al Ketbi (MAK) Auditing to get the best advice.
How Mubarak Al Ketbi (MAK) Auditing Can Help
Mubarak Al Ketbi (MAK) Auditing always goes the extra mile for clients! We help you understand all new rules and make sure you don’t miss any step. Our experts help you:
- Review and plan your taxes for UAE business
- Keep good records and stay compliant
- Use every double tax treaty and exemption
- Choose the best structure for your international company
- Get ready for every tax deadline or audit
For more information:
- Visit our office: Saraya Avenue Building – Office M-06, Block/A, Al Garhoud – Dubai – United Arab Emirates
- Or contact/WhatsApp: +971 50 276 2132
