What is due diligence in cross-border M&A under UAE corporate tax?

Due diligence means checking a company’s tax records and rule compliance before the deal. It helps the buyer avoid tax trouble.

Can companies use old losses after a merger in the UAE?

Yes, but only if they follow CT rules. The buyer must check if they can use old losses for future tax savings.

Why should I hire a tax expert for M&A in Dubai?

Tax experts help companies follow every rule, find savings, avoid mistakes, and keep the M&A process smooth.

UAE Corporate Tax Impact on Cross-Border M&A Deals 🥇

How UAE Corporate Tax Impacts Cross-Border M&A in Dubai

Dubai stands as a top business place in the world. Many companies in Dubai join mergers or buy businesses in other countries. These actions are called cross-border mergers and acquisitions (M&A). Business owners must check a company’s value before any deal. This value tells owners the worth of a company.

UAE made a big change by starting the Federal Corporate Tax (CT). This law affects every company that works with foreign partners. Companies in Dubai must understand how CT changes business plans, money work, and every step in a cross-border deal.

How UAE Corporate Tax Impacts Cross-Border M&A Deals

Cross-border M&A means one company in the UAE joins with or buys another company outside the UAE. The new CT law in UAE changes these deals at many stages:

Due Diligence Gets More Complex:
The buyer checks the target company’s money records and tax rules. This careful check is called due diligence. The new CT law asks buyers to confirm if the target company has paid its tax, followed rules, and kept good records. The buyer wants proof that the company managed all its taxes right. If the target company is in a Free Zone, buyers check if it gets the 0% tax rate after buying. This step adds more work.
Transfer Pricing Between Related Companies:
The way companies plan the deal affects how much tax they must pay. The UAE CT law includes “Participation Exemption.” This can help companies avoid tax on some share sales or dividend income if rules are met. CT rules also allow “Business Restructuring Relief.” Companies can move assets or change group structures before and after M&A and sometimes skip paying extra CT, but only under set conditions.
Deal Structure Planning:
Companies in Dubai often work with their branches in other countries. The buyer must check if the target company used transfer pricing rules right in past deals. After merging, the new group must follow all cross-border rules. Any mistake here can mean tax fines or new tax bills.
Using Past Losses for Tax Savings:
Sometimes, the company being bought lost money in past years. UAE CT law lets companies use past losses to lower new tax bills. But there are rules, especially if the company changes owners during M&A. Buyers must check if they can use these old losses.

Companies must keep these points in mind during every cross-border M&A deal. Extra effects of the CT law may appear, so expert advice can help avoid costly errors. Good planning helps companies gain benefits and follow all tax rules.

What Are the Main Steps in Cross-Border M&A Deals?

Every cross-border M&A deal in Dubai needs careful steps:

Do company value checks.
Review every tax record.
Plan for tax relief options.
Confirm transfer pricing is correct.
Check if past losses can be used.

These steps protect your company from risks and help follow the new CT law.

Why Is Expert Tax Help Important for Cross-Border M&A?

Cross-border M&A deals get tricky with new tax rules. Companies must:

Avoid tax penalties.
Maximize tax savings.
Ensure every document is correct.
Understand special Free Zone or CT rules.

Working with skilled tax experts saves your company from trouble and helps you plan better deals.

How Mubarak Al Ketbi Can Help Your Business

Mubarak Al Ketbi Chartered Accountants gives expert tax support in Dubai. Our team helps your business follow the UAE CT law. We guide you in each step of a cross-border M&A deal. Our tax experts help with due diligence, tax planning, and using every possible benefit.

You can trust us to stand by your side every step of the way. When the going gets tough, the tough get going!

For more information:

Visit our office: Saraya Avenue Building – Office M-06, Block/A, Al Garhoud, Dubai – UAE
Contact/WhatsApp: +971 50 276 2132

FAQs on UAE Corporate Tax Impact on Cross-Border M&A Deals

What’s the first step to get a VARA license in UAE?

The first step is sending a disclosure form to DET or a Freezone Authority, with business plans and documents, and then paying the first half of the fee.

What papers must I have for the VARA license?

You must prepare business certificates, owner lists, proof of capital, management plans, business forecasts, and insurance documents.

Can I start my business after initial approval?

No, you can only set up the company and hire staff. You can’t run any virtual asset activities until you get the VASP license.

How long does the VARA license process take?

The process time depends on how fast you send documents and answer VARA questions, but it usually takes several weeks to months.

How can Mubarak Al Ketbi (MAK) Auditing help my company?

MAK Auditing helps you gather documents, fill out forms, pay fees, and follow VARA rules so your company can run safely and legally.