Taxation

At Ultimate Accounting, Our professional and experienced team of tax advisers provide a comprehensive range of tax services for various business sectors. Our dedicated tax accountants guide you through the tax compliance requirements that have been set by Federal Tax Authority, based on innovative and bespoke solutions to your complex tax issues.

Managing taxes requires accurate calculations, intelligent planning, and regular compliance, as well as the support of experienced tax professionals who can identify the pitfalls hidden in complicated legislation. We ensure each client receives expert tax advice with a dedicated and personal approach and staying compliant. The use of Tax and Business Accounting services can help small business owners stay financially healthy and compliant with tax, VAT returns, etc. while being able to see their overall performance and growth.

VAT is a complex indirect tax INTRODUCED in the year 2018 in the UAE. VAT (Value Added Tax) is a type of consumption tax placed on a product whenever the value is added either at a stage of production or at the point of retail sale. The taxpayer is responsible for ensuring they are filing the correct tax at the right time. Ultimate accounting provides all VAT-related services from registration to VAT health Check-ups.

Our Advisory services include:

1. VAT Registration

• A business must register for VAT if the taxable supplies and imports exceed the mandatory registration threshold of AED 375,000.
• A business may choose to register for VAT voluntarily where the total value of its taxable supplies and imports (or taxable expenses) is over the voluntary registration threshold of AED 187,500.

Ultimate Accounting can help you to determine if VAT registration is required for your business. If you are thinking about voluntary registration, we can also review if it will save your business money or provide benefits in the long term for growth.
Your VAT registration and review will be done by us while addressing all your concerns and covering all key checks.

VAT Returns

Companies with a VAT registration must file periodic VAT returns. The VAT return calculates how much VAT must be paid to or reimbursed by the FTA. VAT returns are due every three months, monthly or during the period specified by the FTA. All taxable transactions during that period are reported, and any VAT liability or refund is calculated.

A VAT registered business may find it challenging to prepare VAT returns. Our VAT team can assist you with the preparation, review and submission of simple or complex VAT returns.

In addition to making your VAT returns effortless, our service will eliminate the risk, complications, and hassle of the process.

VAT De-registration

An individual or business can cancel their VAT registration and suspend their Tax Registration Number (TRN) in the UAE through VAT deregistration

In order to apply for VAT deregistration, a business or individual must meet one of the following requirements:

• It is necessary for a business or individual to apply for VAT Deregistration if they cease making taxable supplies over the next 12-month period and do not expect to make any more taxable supplies during that time.
• In cases where a business or an individual continues to make taxable supplies but their value is less than the Voluntary Registration Threshold (AED 187,500) they must apply for a VAT Deregistration.
• Alternatively, if a business or a person continues to make taxable supplies but the value is lower than the Mandatory Registration Threshold (AE 375,000) and 12 months have passed since the date of registration if you were registered voluntarily, you can apply for deregistration.

We at Ultimate Accounting can help you deregister your company from the FTA.  Contact us today for any and all VAT related services in Dubai!

VAT Health Check up’s

Ultimate Accounting provides VAT health check services for your business that can identify issues before the FTA. We just made it easier for you.

We help you avoid any penalties for the inaccurate mistakes. An opportunity for you to identify your risks by reviewing your current process, practices, and procedures.  Availing a Health check service is to demonstrate to the FTA that you take care when considering the VAT. We guide you throughout the process to ensure all the necessary steps are taken care.

The VAT Health check will include the following:

• Review and sample check your records
• Sample test the most common errors
• Statistically analyses VAT returns
• Sample check the completion of VAT returns
• Compare your VAT returns against your annual accounts
• Check the VAT treatment of your sales
• Analysing your business against relevant VAT schemes
• Ensure you are correctly applying the rules of VAT schemes
• VAT planning opportunities

Excise tax was introduced across the UAE in 2017. Excise tax is a form of indirect tax levied on specific goods which are typically harmful to human health or the environment. These goods are referred to as “excise goods”.

Carbonated drinks include any aerated beverage except for unflavoured aerated water. Also considered to be carbonated drinks are any concentrations, powder, gel, or extracts intended to be made into an aerated beverage.

Energy drinks include any beverages which are marketed, or sold as an energy drink, and containing stimulant substances that provide mental and physical stimulation, which includes without limitation: caffeine, taurine, ginseng and guarana. This also includes any substance that has an identical or similar effect as the aforementioned substances. Also considered to be energy drinks are any concentrations, powder, gel or extracts intended to be made into an energy enhancing drink.

Tobacco and tobacco products

From 1 December 2019, excise tax is also levied on:

• electronic smoking devices and tools
• liquids used in such devices and tools
• sweetened drinks.

Rate of excise tax

The rate of excise tax is as follows:

• 50 per cent on carbonated drinks
• 100 per cent on tobacco products
• 100 per cent on energy drinks
• 100 per cent on electronic smoking devices
• 100 per cent on liquids used in such devices and tools
• 50 per cent on any product with added sugar or other sweeteners.

1. EXCISE REGISTRATION:

Businesses that import, produce, store, or release excise goods from a designated zone in the UAE must register for excise tax. Ultimate Accounting provides the best level of excise tax service in Dubai. Excise tax is the responsibility of every business that is engaged in the following activities:

• The import of excise goods into the UAE.
• The production of excise goods where they are released for consumption in the UAE.
• The stockpiling of excise goods in the UAE in certain cases.
• The release of excise goods from a designated zone.

There is no registration threshold for excise tax, therefore any person who is involved in any of the activities listed below must register an account for excise tax.

EXCISE COMPLIANCE

In UAE, companies that deal with excise goods (carbonated drinks, energy drinks, tobacco and tobacco products, e-cigarettes, sugar-sweetened beverages) need to be registered with FTA. They are required to maintain records of all their taxable transactions as per the FTA’s guidelines on excise. Maintaining accurate and timely records and accounts for excise goods is necessary to avoid fines and penalties.

Compliance with the UAE’s excise tax laws is important for companies to avoid fines as well as to manage the company’s financial dealings properly. To avoid penalties and delays in execution, companies registering for excise must file required declarations on time for the movement of excise goods. It is important for them to accurately compile their excise returns and avoid errors and penalties. Businesses dealing with excise goods need proper guidance and help to manage their excise return. Our team at Ultimate Accounting of experts can assist you not only with filing of excise returns but also with excise compliance that is required by the Federal Tax Authority.

Corporate Tax

Corporate tax is a form of direct tax levied on the net income or profit of corporations and other entities from their business.

UAE Corporate Tax will apply to all UAE businesses, except for the extraction of natural resources, which will remain subject to Emirate level corporate taxation. Foreign entities and individuals will be subject to Corporate Tax only if they conduct a trade or business in the UAE in an ongoing or regular manner.

UAE Corporate Tax will apply equally to all categories of profits and other (net) income reported in the financial statements prepared in accordance with internationally acceptable accounting standards. The UAE CT regime will become effective for financial years starting on or after 1 June 2023

Why is the UAE’ implementing CT?

A competitive CT regime based on international best practices will solidify the UAE’s position as a major global hub for business and investment, as well as speed up the country’s development and transformation to meet its strategic goals.

The UAE’s commitment to fulfilling international standards for tax transparency and combating harmful tax practices is reaffirmed by the introduction of a CT regime.

Who are exempt from CT:

 Dividends and capital gains earned by a UAE business from its qualifying shareholdings will be exempt from UAE CT. A qualifying shareholding refers to an ownership interest in a UAE or foreign company that meets certain conditions to be specified in the UAE CT law

1. Qualifying intra-group transactions and reorganizations will not be subject to UAE CT provided the necessary conditions are met
2. UAE CT will generally not be levied on a foreign investor’s income from dividends, capital gains, interest, royalties and other investment returns
3. Free zone businesses will be subject to UAE CT, but the UAE CT regime will continue to honour the CT incentives currently being offered to free zone businesses that comply with all regulatory requirements and that do not conduct business with mainland UAE
4. Businesses engaged in the extraction of natural resources will remain subject to Emirate level corporate taxation and be outside the scope of the UAE C

**The information on this website is intended to serve as an introduction to the proposed UAE Corporate Tax (CT) regime prior to the finalization and promulgation of relevant legislation. It is not meant to cover all aspects of the UAE CT regime or provide definitive answers, and it should not be used to make personal or business decisions because it is not the final legislation. This document may be updated at any time.

TAX RESIDENCY CERTIFICATE (TRC)

One of the many incentives that attract businesses to the UAE is its favourable tax environment. UAE-based companies are exempt from income tax in the vast majority of cases. Additionally, the country has made sure that the same taxpayer cannot be taxed twice in two countries by implementing double taxation agreements with numerous trade partners.

A Tax residency certificate is a certificate issued for eligible natural and legal persons to take advantage of agreements of double taxation avoidance on income signed by the UAE.

Public and private companies, investment firms, air transport firms and other companies operating in the UAE, as well as other types of UAE residents, may benefit from Avoidance of Double Taxation Agreements (“DTA”).

In order to benefit from a DTA, a person generally requires to provide a TRC to prove that the person is resident in another country and subject to tax in that country. The TRC is a certificate issued for eligible government entities, companies and individuals to take advantage of agreements of double taxation avoidance on income to which the UAE is a signatory. This certificate is valid for over 80 countries in the  world and valid for one year from the date of issuance .

Effective tax planning should be supported by an overall view of your business structure and individual circumstance, and we recommend you always seek professional tax advice, combined with accounting and finance support to ensure that your corporate structure, and individual situation is in line with tax rules to get the maximum benefit from UAE tax residency. Contact our professionals from Ultimate Accounting to know more about the Double taxation avoidance and TRC.

Fees for issuance of TRC as per the Cabinet Resolution No.65 of 2020 are as under: