Corproate Tax Pre-assessment - Flying Colour Tax Services

Corporate Tax Assessment in UAE

Corporate Tax Assessment helps businesses understand the implication of the new Corporate Tax. It is a structured analysis of the impact of Corporate Tax on the operations, business strategy and financial position of the Businesses. This is necessary for businesses to prepare for tax planning, business restructuring and ensure tax compliance. Corporate Tax Assessment also enables businesses to adapt to the new Corporate Tax regime.

Impact Assessment

Corporate Tax Assessment in UAE for Australian Businesses

A Corporate Tax Impact Assessment is essential for Australian businesses planning to expand into Dubai or anywhere in the UAE. It helps evaluate how UAE’s corporate tax laws, regulations, and policies can affect your company’s financial performance and growth strategy.

For Australian entrepreneurs and companies, this process includes:

Identifying potential corporate tax risks and opportunities within the UAE market
Reviewing your existing tax structure from both Australian and UAE perspectives
Developing strategic tax planning solutions to optimize profits and ensure compliance

The primary goal of a Corporate Tax Assessment is to help Australian businesses make informed financial decisions, enhance tax efficiency, and stay fully compliant with the UAE’s Corporate Tax Law. By understanding the true impact of corporate taxation, your business can minimize liabilities, leverage available exemptions, and build a strong foundation for sustainable success in the UAE.

Partner with Flyingcolour® Tax Consultant LLC for expert corporate tax advisory and assessment services tailored to Australian companies expanding into Dubai or across the UAE.

Aspects of Corporate Tax Impact Assessment

Tax compliance: Assessing the company’s compliance with the tax laws and regulations in the UAE.

Tax planning: Identifying opportunities to minimize tax liabilities and maximize tax benefits, like claiming tax credits and deductions.

Transfer pricing: Examining the transfer pricing policies of the company to ensure compliance with tax laws and regulations in UAE, including the transfer of goods, services, and intellectual property agreements between related entities.

Tax incentives and exemptions: Checking the company’s eligibility for any tax incentives or exemptions offered by the UAE government, such as free zone status.

Business structures: Evaluating the current business structure of the company and considering necessary changes that may be required to minimize tax liabilities and maximize tax benefits.

International tax considerations: Assessing the effect of cross-border transactions on the company’s tax position and establish compliance with international tax laws and regulations.

Document Assessment

Businesses in UAE will be required to keep financial and other records in place to comply with Corporate Tax document requirements. Failure to meet these requirements may result in significant Corporate Tax penalties imposed by the authority. Companies must secure the files and records that explain the information on the UAE Corporate Tax return and other documents filed to the FTA.

Compliance Assessment

The Corporate Tax regime will be based on the concept of self-assessment. It implies that firms must ensure that their tax returns and accompanying schedules are correct, accurate, and in accordance with UAE Corporate Tax Law. Companies should be aware that the FTA may conduct a review of the filed Corporate Tax returns and provide an assessment within the period.

Taxpayers may, however, appeal an amended business tax assessment given by the Authority. As a result, Businesses may be able to appeal and revise the adjustments to comply with the Corporate Tax laws.

The main reason for introducing the corporate tax rate in UAE is the OECD’s Action 1 Pillar 2. According to Pillar 2, a global minimum tax regime must exist to reduce incentives for entities to establish their operations in tax-free or less-taxed jurisdictions. Thus, the new corporate taxation has impactful consequences for MNCs operating in the country.

Yes. Transfer pricing rules will apply to all transactions with Related Parties and Connected Persons. Therefore, any loan obtained from (or granted to) a Related Party or Connected Person needs to be at arm’s length (e.g. interest rate, duration, etc.).

Businesses will be required to maintain information regarding their transactions with Related Parties and Connected Persons, and certain businesses will be required to submit this information along with their tax return. Businesses that claim small business relief will not have to comply with the transfer pricing documentation rules. Certain businesses may be requested to maintain a master file and a local file

Transactions between members of a Tax Group are eliminated in the consolidation of the Group’s financial results statements and hence do not need to comply with the transfer pricing rules, unless a member of the Tax Group needs to compute its stand-alone Taxable Income for the purposes of utilizing Tax Losses incurred before joining the Tax Group or when leaving a Tax Group.

Tax losses can be carried forward without limitation provided the same person or persons continue to own at least 50% of the entity with the losses. Where there is a greater than 50% change in ownership, tax losses may still be carried forward provided there is no major change in the nature or conduct of the entity’s business.

Companies that are part of a ‘Qualifying Group’ can transfer assets and liabilities between themselves at their net book value. This means that the transfer can be carried out tax neutrally (i.e. not give rise to a gain or loss for CT purposes).

No, unless the foreign entity is managed and controlled in the UAE and considered a UAE resident entity for UAE CT purposes. This is because only UAE resident juridical persons can form or be part of a Tax Group.

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Service Spectrum

Flyingcolour® Tax Consultant and J N J Auditing LLC provide accounting and bookkeeping services, tax related services, auditing, economic substance regulation (ESR) services, anti-money laundering compliance services, tax residency certificate assistance, payroll services, excise tax services, other compliance, and CFO services, etc. through our team of experienced professionals. We cover comprehensive and customized packages tailored to your specific requirements.

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Corporate Tax Assessment in UAE

Different processes of Corporate Tax Pre-Assessment