The era of tax-free status in the UAE has come to an end.
Dear fellow business owners in the UAE,
In just two weeks, the Federal Tax Authority will introduce a new 9% corporation tax, which is a significant development for the UAE.
Today, the Federal Tax Authority made an announcement stating that an individual can be considered a business if their income or assets exceed certain thresholds. It is important to note that transferring company assets to personal assets may not be a wise decision.
For all the hardworking employees in the UAE who receive a single income stream or salary, there's no need to worry as your income is still exempt from any income tax. Rest assured and have a peaceful sleep tonight.
Additionally, business owners should be aware that substantial fines will be imposed for failing to register for corporation tax or failing to submit accounts. It is crucial not to neglect this responsibility.
Yes, even the free zones in the United Arab Emirates are subject to the 9% corporation tax, along with onshore entities.
Here's some valuable accounting information for you, free of charge:
Onshore entities will be subject to a 9% corporation tax.
Free zone entities that engage in transactions with onshore entities will also be subject to a 9% corporation tax.
Free zone entities involved in 100% overseas transactions will enjoy a 0% corporation tax. However, it is still necessary to submit accounts to the FTA and provide explanations for paying no tax.
In summary, starting from June 1st, 2023, everyone is required to disclose their accounts to the regulator. Accountants will compare the 2022 accounts with those of 2023/2024, and significant discrepancies may result in fines and potentially more severe consequences for business owners.
It is time for the UAE to establish itself as the most trusted financial hub worldwide, and this process begins in just two weeks. Let's rise to the occasion!
If you have any questions, feel free to reach out to us at Future Brighteners. We are here to assist you.