Corporate Tax in the UAE is a direct tax on corporations and businesses, contributing 9% of their taxable income to support economic growth. It applies to businesses operating under a commercial license, free zone businesses on the mainland, foreign entities engaged in regular trade, and those involved in banking and real estate activities.
Exemptions include natural resource extraction, dividends, capital gains, intra-group transactions, individual employment income, and more. Tax rates range from 0% to 9%, providing a structured approach to corporate taxation.
Introduced in 2017, Excise Tax targets specific goods harmful to health or the environment. It covers carbonated drinks, energy drinks, and tobacco products. From December 2019, it extends to electronic smoking devices, liquids, and sweetened drinks.
Rates vary from 50% to 100%, aiming to reduce consumption of unhealthy commodities and generate revenue for public services. The impact on consumers involves higher prices for goods deemed harmful.
Implemented in 2018 with a 5% rate, VAT is a significant source of income for the UAE, contributing to high-quality public services and reducing dependence on hydrocarbons.
Mandatory for businesses exceeding AED 375,000 in taxable supplies, it’s optional for those exceeding AED 187,500. Businesses pay collected tax to the government and receive refunds on paid taxes to suppliers. Foreign businesses can recover incurred VAT during visits to the UAE.
The UAE’s commitment to avoiding double taxation is evident in its 142 agreements with other nations. These agreements aim to promote national development, eliminate tax evasion, and facilitate cross-border trade and investment.
The absence of income tax for individuals is a notable feature. Tourist facilities, including restaurants and hotels, may charge various taxes such as room rates, service charges, municipality fees, city tax, tourism fees, and more, depending on the emirate.
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At Set Hub, we’re more than a consultancy; we’re a partner. Our team can help you navigate the entire business setup process and jump through all the necessary hoops to ensure the best possible start for your business including accounting services in dubai. Set Hub specializes in a suite of financial solutions ranging from Financial Audit reports, and Liquidation reports to Tax Certificates for both businesses and individuals. Our expertise can help you mitigate potential risks, promote local networking, and craft future growth plans, making you invaluable collaborators in Dubai’s dynamic business environment. All our Tax and financial accounting services are managed in-house, ensuring a seamless one-stop experience for our clients. Want a quick estimate of your corporate taxes? Check out our Corporate Tax Calculator!
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