UAE Corporate tax Questions and Answers

Question: What is corporate tax in the UAE and what is the percentage?

Corporate tax is a tax imposed on the net income or profits of businesses operating in the UAE. The UAE has recently introduced a federal corporate tax law that will apply a 9% tax rate to all in-scope businesses from 1 June 2023. However, there are some exemptions and deductions available for certain types of businesses and expenses.

Question: Who is subject to corporate tax in the UAE?

All legal entities and individuals engaged in business, commercial, professional, or any other economic activities for which a license or a permit is required are subject to corporate tax in the UAE. This includes businesses operating in the mainland and free zones, as well as foreign-owned businesses and branches. However, some entities are exempt from corporate tax, such as government entities, extractive businesses, qualifying public benefit entities, and certain pension and investment funds.

Question: How can I calculate my taxable income and tax liability?

Your taxable income is the net income or profit that you derive from your business activities in the UAE, after deducting the allowable expenses and losses. Your tax liability is the amount of tax that you have to pay on your taxable income, at the rate of 9%, unless you qualify for a lower rate or an exemption.

Question: What are the allowable and non-allowable expenses for corporate tax purposes?

Allowable expenses are the costs that you incur wholly and exclusively for the purposes of your business and that are not of a capital nature. Some examples of allowable expenses are interest expenditure (subject to a cap), client entertainment expenditure (subject to a partial deduction), salaries and wages, rent, utilities, advertising, and depreciation. Non-allowable expenses are the costs that you cannot deduct from your income for corporate tax purposes, either because they are not related to your business, or because they are specifically disallowed by the law. Some examples of non-allowable expenses are bribes, fines, penalties, donations, dividends, corporate tax, and expenditure incurred in deriving exempt income.

Question: What are the filing and payment requirements for corporate tax in the UAE?

You are required to file a corporate tax return and pay the tax due within nine months from the end of your tax period, which is usually the calendar year, unless you have a different accounting period approved by the Federal Tax Authority. You may also have to make advance payments of tax on a quarterly basis, based on your estimated income and tax liability.

Question: Why do I need a professional tax advisor for corporate tax in the UAE?

Corporate tax in the UAE is a complex and evolving subject, with many implications and consequences for your business. A professional tax advisor can help you understand the tax law and its application to your specific situation, and provide you with guidance and solutions to optimize your tax position and compliance. A professional tax advisor can also assist you with tax planning, filing, reporting, auditing, and dispute resolution.

Question: How can Aeon Accounting and Auditing Co. LLC help me with corporate tax in the UAE?

If you are looking for a reliable and experienced tax advisor, you may consider contacting Aeon Accounting and Auditing Co. LLC, a leading company that offers a range of tax and accounting services in the UAE we can help you understand the tax law and its application to your specific situation, and provide you with guidance and solutions to optimize your tax position and compliance. Aeon Accounting and Auditing Co. LLC offers a range of tax and accounting services in the UAE, such as:

• Corporate tax filing and reporting

• Corporate tax planning and advisory

• Corporate tax audit and dispute resolution

• Corporate tax exemption and deduction

• Corporate tax training and education

By choosing Aeon Accounting and Auditing Co. LLC, you can benefit from:

• Expert knowledge and experience in UAE corporate tax

• Customized and tailored service to meet your needs and goals

• Timely and accurate delivery of work and results

• Competitive and transparent pricing and fees

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