Unlocking UAE's Tax Benefits: Your Guide to Foreign Tax Credits with Forever Rich Accounting and Tax Services
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For UAE businesses earning globally, navigating tax complexities just got easier!¨ Introducing Federal Decree Law No. 47 of 2022 on Taxation of Businesses and Corporation effective from June 1, 2023. With this, businesses might face taxes both in the UAE and abroad.
Fear not! Forever Rich breaks it down. Our expert guide on 'Taxation of Foreign Source Income' and 'Foreign Tax Credit' (FTC) ensures you don't pay taxes twice on the same income. Here's what you need to know:
Who Can Claim FTC?
Resident companies and individuals with UAE business ties.
Non-Residents with a Permanent Establishment in the UAE.
When is FTC Unavailable?
For tax-exempt income.
Small Business Relief or turnover below AED 1 million.
0% Corporate Tax for qualifying Free Zone Persons.
Loss or negative Taxable Income.
What Qualifies for FTC?
Similar character to Corporate Tax.
Imposed and enforced by a foreign government.
Compulsory payment based on foreign tax laws.
Covers profit or net income.
Factors to Consider:
Double Taxation Avoidance Agreement terms.
Irrelevant: Tax name, collection method, other taxing authorities.
When is a Foreign Tax Considered 'Paid'?
Upon remittance or accrued and committed payment due.
Not considered if contingent or refunded.
Unused FTC:
Can't be carried over or deducted from taxable profits.
Documentation Needed:
Records of foreign income, exchange rates, foreign tax details.
Payment proofs: Receipts, withholding tax certificates, tax return copies.
Navigating the UAE Foreign Tax Credit landscape made simple with Forever Rich! Claim your tax benefits, ensure compliance, and stay financially secure. Contact us for hassle-free accounting and tax services. #ForeverRichTaxServices #UAEFinanceSimplified"