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Why a Tax agency..?

Mon, 14 Aug 2023 09:47:41 GMT

VAT in UAE: How do Tax Agents help you Ensure Compliance?

Taxable persons hire tax agents in the UAE to ensure they are meeting all the regulatory requirements mandated by the Federal Tax Authority (FTA). As per Federal Law No. (7) of 2017, tax agents are persons appointed on behalf of taxable entities to represent them before the FTA. Taxable businesses need to appoint the right tax agent to meet their tax obligations and avoid any type of tax-related penalties.

Read ahead to know further:

FTA-Registered Tax Agents in the UAE

A Tax Agent is usually engaged by his or her clients through the Tax Agency with which he or she is associated in order to provide tax related services which could include:

Helping the businesses register with the FTA;
Preparing and submitting tax returns to the FTA on behalf of the businesses;
Maintaining tax related records and/or information;
Enquiring about tax related matters with the FTA; and
Submitting requests for reconsideration of decisions issued by the FTA.

Tax agents assist taxable persons meet their tax obligations according to a contractual agreement between the person and the Tax Agent and in accordance with the Tax Agent’s duties as stated in the tax legislation. However, businesses need to hire tax agents who are registered with the FTA. As per Article 13 of the UAE Tax Procedures Law, only the persons listed in the FTA’s tax agents register and licensed by the Ministry of Economy are permitted to practice as a tax agent in the UAE.

Qualities & Qualifications of Tax Agents in the UAE

Before appointing a tax agent, you should understand the basic qualities and qualifications the person is required to hold. Article 10 of Cabinet Decision No. (36) of 2017 on the Executive Regulation of Federal Law No. (7) of 2017 states that a tax agent must possess the following qualities and qualifications to be listed in the FTA Register:

Tax agents in the UAE must be of good conduct & behaviour, and should not be convicted of any crime
Must hold at least a certified Bachelor’s or Master’s degree in tax, accounting or law from a recognised educational institution (a bachelor’s degree plus a tax certification issued by an internationally known tax institute is also accepted)
At least three years’ experience as a tax professional / a qualified lawyer or an accountant
Written and oral communication skills in both Arabic and English
Must have passed any test to meet the qualification standards mandated by the FTA
Medically fit to perform the duties of a tax agent in the UAE
Must have professional indemnity insurance or be covered by one

What is the Significance of FTA-registered tax agents?

In order to ensure seamless VAT compliance in the UAE, taxable entities need to make sure their communication with the FTA is proper and effective. A tax agent in the UAE is the authorised person who can communicate directly with the FTA on your behalf. Since they are registered with the FTA, tax agents have the authority to represent you before the Authority. Tax agents can represent you before the FTA whenever the Authority makes any inquiries or you want to raise any issue with the Authority. Since a tax agent is well-versed in tax laws and the Arabic language, the FTA can easily understand and quickly resolve your tax-related issues.

How AMANA will help you...?

We, being an FTA approved tax agent in Dubai UAE, have an extensive experience and knowledge about VAT requirements. Our application of knowledge will help you to make quick decisions and develop good routines to comply with VAT law and regulations.

Being a certified Tax Agent, we are privileged to represent your company legally in front of the FTA.

As your trusted and reliable partner, we combine a strong understanding of the business insights and comprehensive tax knowledge to assist our clients with tax-related needs.

We stay abreast of the updated tax guidelines or amendments and explore new ways to meet our clients’ changing tax-related requirements.

We undertake comprehensive tax planning and offer advice on complex issues to ensure compliance in order to help avoid penalties on non-compliance of the provisions in the VAT law and related regulations.

ESR Compliance

Thu, 20 Jul 2023 15:48:10 GMT

Who prepare Economic Substance Notification?

All the companies in the mainland, offshore and freezone are involved in more than one “Relevant Activities” must file a Notification annually, within six months of the end of the Reportable Period.

E.g.: -if your company’s financial year end is 31 December 2021, then you need to file ESR Notification before 30 June 2022.

Economic Substance Report

Entities that are within the scope of the Regulations have to submit an annual Notification form to their Regulatory Authority, and complete and submit to the same Regulatory Authority an Economic Substance Report within 12 months from the end of their financial year

E.g.: -31 December 2022 for entities with a financial year ending 31 December 2021.

Who Relevant activities for economic substance test

Banking Business
Insurance Business
Investment Fund management Business
Lease – Finance Business
Headquarters Business
Shipping Business
Holding Company Business
Intellectual Property Business (“IP”)
Distribution & Service Centre Business

Amana Taxation and Accounting LLC has a diverse team of professionals across Tax, Finance, Law and Economics domains who review whether Economic Substance rules are applicable for your business and also clarify the extent to which they are applicable. Our team of experts can guide you through the measures that need to be taken to mitigate risks of non-compliance to ESR.

Corporate Tax in UAE from 1st June '23

Thu, 01 Jun 2023 11:53:02 GMT

1. What is corporate tax in UAE?

Corporate tax is a form of direct tax levied on the net income or profit of corporations and other business entities. It is also commonly known as 'Corporate Income Tax' or Business Profits Tax.

In simple words, it is a tax levied on the net profit made by the businesses. It requires companies to pay a certain percentage of profit as tax.

2. Who should pay corporate tax in the UAE?

All the businesses whose taxable profit (net) is more than 375,000 AED fall under the purview of corporate tax and are required to pay a certain percentage of net profit as corporate tax.

3. What is the rate of corporate tax in the UAE?

The corporate tax rate is at 9% of the net profit made by the businesses. In order extent support to small businesses and start-ups, the corporate tax rate will be '0' % if the net profit is up to 3,75,000 AED.

4. What is the date of implementing the federal corporate tax in UAE?

The date of implementing the corporate tax is effective from the financial year starting on or after 1st June, 2023.

5. What are the businesses or incomes that are outside the scope of corporate tax?

Given the profit threshold of 3,75,000 AED, all businesses that exceed the threshold have to pay the corporate tax. However, certain types of business or income are exempt from corporate tax. Below is the list of companies or income exempt from corporate tax:

Individuals will not be subject to corporate tax. As a result, any income from employment, real estate, investments in shares, and other personal income unrelated to a trade or business in the UAE will be exempt from corporate tax

Not applicable to foreign investors who do not carry on business in UAE

Corporate tax incentives are currently being offered to free zone businesses that comply with all regulatory requirements will continue.

Capital gains and dividends received by UAE businesses from its qualifying shareholdings are exempt from corporate tax

Not applicable on qualifying intragroup transactions and restructurings

6. How is corporate tax in UAE calculated?

Corporate tax in UAE is calculated at 9% of the net profit shown in the company's financial statements. The 9 % corporate tax will be levied only if the taxable net profit exceeds 375,000 AED. In other words, the net profit up to 3,75,000 AED is taxed at 0%.

For example, If the net profit is 4,75,000 AED, the corporate tax will be 9,000 AED (4,75,000-3,75,000 X 9/100)

7. What's the way forward for businesses with proposed corporate tax in UAE?

There is a lot to unfold on federal corporate tax as we walk towards D-day 'June,2023', which is miles away from now. Given the proposed implementation date, businesses have plenty of time to prepare for corporate tax.

Given that the corporate tax law is out, there is a lot to study and understand the complexity, one sure thing is that financial statements will now become even more critical for businesses. This is because the net profit on these statements becomes base to arrive at the corporate tax that a business is liable to pay.

The accuracy of the business data will define the correctness of financial statements, ensuring the right amount of corporate tax is determined.

At Amana, we have a precise understanding of the fact that each business differs in its goals, strategies and various other aspects. Hence, we customize the corporate tax solutions, per the client's requirements.

Through Amana Taxation and Accounting LLC corporate tax advisory, our corporate tax consultants in UAE also assist our valuable clients on issues such as Corporate Tax Registration, Filing CT Returns, etc., and explain the updated regulations from the Federal Tax Authority to prevent the payment of CT fines and penalties.

With our quality services in every aspect, we are highly recommended by clients for all business requirements, especially Corporate Tax Services in the UAE. For assistance or queries related to Corporate Tax, call Amana Taxation and Accounting LLC Today, or visit our office for more clarifications.