Tax consultants in UAE assist taxable persons to seamlessly navigate and combat tax intricacies upon stages of tax preparations and implementation in compliance with tax laws and standards. This guide seeks to explain how local and international taxation affects businesses in UAE and furnish advice on asset planning & protection services to secure business conduct and assets.
Businesses in the UAE must be aware of various local and international taxation treatment, including Value Added Tax (VAT), withholding taxes, excise duty, and corporate income tax. VAT is a form of indirect taxation charged on goods or services supplied within the UAE. It applies to most supplies made in the country unless exempted by law or subject to a zero rating. VAT is charged at the rate of 5% on both goods and services, but certain specific commodities have different rates.
Withholding taxes are required to be paid by employers in relation to payments made to non-resident companies or individuals for services rendered or income earned in the UAE. Generally, withholding tax rates in the UAE range from 0% to 15%.
Whereas, excise duty is imposed on certain specific goods and services that are listed under the UAE excise tax law, such as tobacco and energy drinks. The applicable rate varies depending upon the type of product or service subject to taxation.
To add on, corporate income tax applies to all taxable income of taxable persons at a rate of 9% on taxable income, which is 375 0000 AED, and 0% on income below the threshold of 375 0000 AED.
The UAE has created special economic zones (SEZ) for businesses that offer tax exemptions and other incentives. Investing in an SEZ can help business owners gain additional financial advantages, such as reduced taxes, easier access to financing from local banks, freehold property ownership rights and 100% foreign company ownership.
For dividend distributions within the UAE, there is typically no withholding tax on dividends paid to shareholders who are UAE residents. However, for those shareholders who reside outside of the UAE, a 5% withholding tax may be applicable. It is important that business owners understand these rules and exemptions before distributing profits or investing in SEZs.
Tax advisory services for businesses can include asset planning and protection. Asset planning enables you to secure your assets and wealth in the long run. It also provides advice on how to best utilize tax laws to minimize taxes, optimize investments, defer income, transfer ownership of assets, lower estate taxes and more.
Asset protection includes strategies that provide business owners with legal and financial protection from creditors. It also involves risk management strategies to help protect assets from potential lawsuits. Examples of asset protection services include constructing an LLC, forming trusts, setting up international trust structures, creating offshore accounts, and utilizing asset protection insurance policies.
Tax advisors can provide advice on which approach may be best for the particular circumstances of any given business. It is important to consider the short-term and long-term implications of any asset planning or protection strategy being discussed, as well as potential tax consequences.
Tax advisory services for businesses in the UAE should include expertise on these various taxes and an understanding of how each affects corporate operations. A tax advisory company can provide invaluable support by helping businesses ensure compliance and thereby avoid hefty fines and potential criminal charges. They can also offer advice on how to minimize the tax burden, allowing businesses to save money without compromising their legal obligations. With a comprehensive understanding of the local and international taxes affecting businesses in the UAE. Therefore, contact us today and we shall be happy to assist you.