How to Compute Corporate Tax Services in UAE?
Corporate tax services in UAE are usually framed to optimize your tax strategy and improving the economic efficiency of the businesses.
Registration for UAE Corporate Tax
As per the Federal Tax Authority, every taxable person including those under the Free Zone Persons category needs to register for Corporate tax, it may be subject to the authority’s discretion. Once you have done Corporate tax registration in UAE , you will receive a corporate tax registration number by which you can continue to file for Corporate tax.
Filing for Corporate Tax
After the registration , companies must prepared themselves for corporate tax filing within the nine months after the end of their relevant tax period. If the tax period of a company started on 1 January 2024 , then last day for filing Corporate tax return is 30 September 2025. For the companies whose tax period started on 1 June 2023, then the Corporate tax could be file till 28 February 2025.The Corporate tax returns can be filed on the website of Federal Tax Authority , where by the owned amount can be calculated correctly and hence paid timely.
A perfect Corporate Tax planning in Dubai is required for this regime and the First Check Consultants can help you not only at the time of Corporate tax registration in UAE but also in preparing financial statements to support your determined taxable income and submitting your annual Corporate tax returns accurately and timely.
How to compute Corporate Tax Services in UAE ?
In UAE , Corporate tax is calculated at 9% of the taxable income exceeding AED 375,000 within a financial year along with the adjustments of applicable expenditures and deductions. If your enterprise has earnings below this threshold, it will be subject to a 0 % Corporate Tax rate.
With the step by step procedure you can approach to the calculations of UAE Corporate tax :
1 – Collect all the financial records or statements of your company as per the IFRS or similar standards.
2 – After the calculation of revenues and expenditure , calculate the company’s profit within the taxable period and mention it as net profit within your financial statements.
3 – Review your financial statement and identify the non – deductible expenses and income exempted from corporate taxes if they might have been calculated while the computation of net profit.
4 – In the next step, apply the relevant tax rate based on Dubai’s tiered system.
Formula for computing Corporate Tax
Corporate Tax = Net Profit obtained x Corporate tax rate as applicable
Example – If your company’s net profit for the taxable period is AED 800,000. Then calculation of Corporate tax will be as :
Since net profit of AED 800,000 exceeds the AED 375,000 threshold, then there will be no need of the adjustments for computing taxable income and hence the taxable income for Corporate tax purposes is AED 800,000.
As the taxable income surpasses AED 800,000 and applicable tax rate is 9 %, then by using the above formula we will calculate the Corporate tax as,
Corporate Tax = AED 800,000 x 9%
Corporate Tax = AED 72,000
Since Corporate Tax regime is relatively new in UAE, so it is important for you that take the guidance or advice of experienced Tax consultants in Dubai who can help you to come out of this complex situation .
Taxable entities of UAE
Diverse entities and people are engaged in financial activities of UAE as:
Resident people
A normal person engaging in commercial enterprise inside the UAE. Juridical entities incorporated , mounted ,or diagnosed within UAE or overseas entities managed in UAE.
Non- Resident people
People having permanent establishment in corporate tax services UAE, derive profit sourced within UAE or have a nexus inside the UAE. Branches of the non- resident people inside the UAE are dealt with as the same taxable man or woman for taxation functions.
Conclusion
The First Check is the team of tremendous Tax consultants in Dubai who analyzes and understands the complexities of Corporate tax services in Dubai and ensures you compliance with all regulations and helps you in improving the economic fitness of your business.
