We are helping more and more individuals and businesses move to Dubai and the UAE. Amongst other benefits, Dubai and the UAE have long been an attractive tax jurisdiction, however, with the UAE being as dynamic and evolving as it is, it has introduced a number of tax regimes and requirements which are being phased in over a period of time. These requirements are being introduced to help boost the UAE’s prominence as a global commercial and investment centre.
It is, therefore, extremely important that individuals and businesses looking to set up or move their business to the UAE seek advice on tax structures and requirements in the UAE before making the move.
Requirements in the UAE, include:
- Value Added Tax (VAT)
- Customs and Excise
- Corporate tax (effective from 1 June 2023)
- Economic Subsistence Reporting (ESR)
- Country by Country Reporting (CbCR)
- Double tax treaties
- Tax residency
Corporate Tax (effective from 1 June 2023)
- 0% tax rate for taxable profits up to AED 375,000.
- 9% tax rate for taxable income in excess of AED 375,000.
- Higher tax rate (yet to be confirmed) for multinational corporations with consolidated income in excess of AED 3.15bn.
Value Added Tax (VAT)
- Mandatory registration threshold of AED 375,000 & voluntary registration threshold of AED 187,000.
- No registration threshold applies to non-resident businesses making supplies on which UAE VAT is required to be charged.
- Three rate types, standard rated at 5%, 0% & exempt.
Economic Substance Reporting (ESR)
- Entities within the scope of ESR are required to submit annual Notifications to their relevant Regulatory Authority.
- UAE onshore and free zone companies that carry out any of the following relevant activities are required to maintain and demonstrate adequate “economic presence” in the UAE. Such activities include the following: Banking Business, Insurance Business, Investment Fund Management Business, Lease (Finance Business), Headquarters Business, Shipping Business, Holding Company Business, Intellectual Property Business (“IP”) and Distribution and Service Centre Business.
Hawsons is a member of HLB International, a fast – growing, dynamic network of independent accounting firms and business advisors. Through this network we can provide you with strategic, business and taxation advice relevant to the coutries in which you are operating in, including the UAE. Through the power of 27,485 professionals across 153 countries, we combine local expertise and global capabilities to serve client needs.
More from our tax experts
You can find all of our latest tax articles and tax resources here.
If you are looking for advice in a particular area, please get in touch with your usual Hawsons contact.
Alternatively, we offer all new clients a free initial meeting to have a discussion about their own personal circumstances – find out more or book your free initial meeting here. We have offices in Sheffield, Doncaster and Northampton.
David Cairns
Tax Partner, Northampton
Dalia Qarawi
Personal Tax Supervisor, Northampton
01604 645 500
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