10 key Questions Board Members & Executives should consider about Corporate Tax

As the UAE introduces its new corporate tax regime, businesses must understand the implications on their operations and financial planning. Here are 10 key questions to consider:

1. What rate applies to my entity and what is the impact on my business plans and after-tax returns to shareholders post 1 June 2023?

• The UAE CT rate is a three-tier system: 0% for businesses with taxable income not exceeding AED 375,000, 9% for businesses with taxable income exceeding AED 375,000, and a different rate (likely 15%) for multinational groups with revenue in excess of EUR 750m.

2. Would the difference in tax regimes for free zones and mainland UAE impact my current operating model?

• Free zone entities can benefit from a 0% corporate tax regime if they earn qualifying income, subject to other conditions.

3. Will my organization’s entities in the UAE be able to be consolidated into one filing group and are there any benefits in doing so?

• Consolidated tax returns can reduce administrative burdens and allow for sharing of losses across entities to lower the effective corporate tax rate.

4. How will the introduction of corporate tax affect my business’s cash flow and financial planning?

• The new tax regime will impact cash flow and financial planning, particularly for businesses with taxable income exceeding AED 375,000.

5. What are the implications for my business’s pricing strategy and competitiveness in the market?

• The corporate tax will influence pricing decisions and competitiveness, as businesses must consider the tax burden when setting prices.

6. How will the new tax regime affect my business’s ability to attract and retain talent?

• The tax changes may impact employee compensation and benefits, potentially affecting talent attraction and retention.

7. What are the implications for my business’s supply chain and logistics operations?

• The corporate tax will influence supply chain and logistics operations, particularly for businesses with taxable income exceeding AED 375,000.

8. How will the new tax regime affect my business’s ability to expand and diversify its operations?

• The tax changes may impact expansion and diversification plans, particularly for businesses with taxable income exceeding AED 375,000.

9. What are the implications for my business’s compliance and reporting requirements?

• The new tax regime will introduce additional compliance and reporting requirements, including the need for consolidated tax returns.

10. How can my business prepare for the new corporate tax regime and minimize its impact?

• Businesses should review their financial plans, pricing strategies, and operations to minimize the impact of the new tax regime.

To ensure your business is well-prepared for the new corporate tax regime in the UAE, consider partnering with a professional services firm that provides comprehensive corporate tax solutions. Our team at Corporate Group led by Luca Angiolilli LL.M can help you navigate the complexities of the new tax regime and optimize your tax strategy to achieve your business goals.

Contact us today to learn more about our corporate tax services and how we can support your business in the UAE.

?? www.corporategroup.me

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