Corporate Financial Services

Audit & Assurance Services Audit & Assurance Service in the UAE is much more than verifying just figures and numbers. Audit & Assurances systematic review and inspection of the Entity’s accounts & controls. Generally, these are performed by external Parties to get a clear view and position on the state of affairs of the Company. Since Business Owners, Investors, are busy with their core operating activities the overall performance, Internal controls, state of affairs are not checked or verified. This is where Audit & Assurance Service in the UAE plays a vital role in providing Stakeholders with reasonable assurance on the affairs of the business. The audit is providing the opinion on the Financials Statements and is to ensure that information provided is of required quality and is acceptable worldwide. For the Financial Statements to be accepted worldwide, it needs to be audited in line with International Standards on Auditing. These standards are interlinked and hence need to be applied in unity. Audit & Assurance External Auditing Services Due Diligence Audit Services IFRS Advisory Services Internal Audit Services Operational Audit Services Forensic Audit Services Fraud Investigation Audit For more information and Quotation please Click here …..

Free Zone Corporate Tax KEY POINTS The Corporate Tax Law will be effective from 1 June 2023 with a headline rate of 9%. The regime includes features that represent best practices in international taxation. Several exemptions are available for businesses operating across strategic sectors. Free zone persons can continue to maintain their 0% tax position subject to meeting certain conditions. General anti-avoidance and transitional rules apply from the date the law is published in the Official Gazette. Taxable person Generally, CT will apply to both resident and nonresident persons. A resident person will include: A juridical person incorporated otherwise established or recognized in the UAE (including free zones) A juridical person incorporated otherwise established or recognized outside of the UAE, that is effectively managed and controlled in the UAE A natural person that conducts business activity in the UAE Free zones The Corporate Tax Law introduces the concept of a “Qualifying Free Zone Person” (QFZP), which is broadly defined as a company or branch registered in a free zone that: Maintains adequate substance in the UAE Derives qualifying income (to be specified through a Ministerial Decision) Satisfies transfer pricing requirements Meets any other conditions to be prescribed through a Ministerial Decision A QFZP will still be subject to CT but may benefit from a 0% rate on its qualifying income. A QFZP can elect to forego this preferential regime and be subject to the standard CT rate. For more information and Quotation Click here Office Website for Corporate Tax

EmaraTax is now live Go to https://eservices.tax.gov.ae/ to access the FTA’s online services. This web address will remain unchanged even after the transition to EmaraTax. This dedicated microsite contains important information about EmaraTax and is intended to help you use the new platform. More content will be added over time. Remember to keep submitting returns and making payments Please keep submitting any tax returns and making payments due as usual. Any important updates relating to the submission of returns or the making of payments will be communicated here, on our social media channels, or through email. A new tax platform designed to provide a better experience for taxpayers managing their tax obligations EmaraTax will enhance our ability to administer taxes in the UAE, enabling better, faster decision-making and earlier engagement with taxpayers that need support. EmaraTax integrates with influential government entities such as the UAE Central Bank and national technology-based programs including UAE PASS to streamline user experience. This also aligns with the national digital agenda to leverage emerging technologies and build a solid digital infrastructure that serves the people and business community of the UAE. EmaraTax is intuitive, easy to navigate and offers improved self-help options for when you need assistance. It will also be available on mobile soon.

Corporate tax (CT) In January 2022, Ministry of Finance announced that it will introduce federal Corporate tax (CT) on the net profits of businesses. The tax will become applicable either on 1 July 2023 or on 1 January 2024, depending on the financial year followed by the business. CT will be applied across all the emirates. Introduction about Corporate tax Introduction about Corporate tax According to the UAE Federal Decree-Law No. 47 of 2022 on taxation of corporations and businesses (the “Corporate Tax Law”), businesses will become subject to UAE Corporate Tax from the beginning of their first financial year that starts on or after 1 June 2023. What is Corporate tax (CT)? Corporate tax is a form of direct tax levied on the net income or profit of corporations and other entities from their business. Objectives of CT By introducing the CT, the UAE aims to: cement its position as a leading global hub for business and investment accelerate its development and transformation to achieve its strategic objectives reaffirm its commitment to meeting international standards for tax transparency and preventing harmful tax practices. Scope CT will apply to: all businesses and individuals conducting business activities under a commercial licence in the UAE free zone businesses (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 set up in the UAE’s mainland.) Foreign entities and individuals only if they conduct a trade or business in the UAE in an ongoing or regular manner Banking operations Businesses engaged in real estate management, construction, development, agency and brokerage activities. Exemptions from CT Below are the rules regarding exemptions from the corporate tax. Businesses engaged in the extraction of natural resources are exempt from CT as these businesses will remain subject to the current Emirate level corporate taxation. Dividends and capital gains earned by a UAE business from its qualifying shareholdings will be exempt from CT. Qualifying intra-group transactions and reorganizations will not be subject to CT, provided the necessary conditions are met. Additionally, CT will not apply to: an individual earnings salary and other employment income, whether received from the public or the private sector interest and other income earned by an individual from bank deposits or saving schemes a foreign investor’s income earned from dividends, capital gains, interest, royalties and other investment returns investment in real estate by individuals in their personal capacity dividends, capital gains and other income earned by individuals from owning shares or other securities in their personal capacity. CT Rate As per Ministry of Finance, CT rates are: 0 per cent for taxable income up to AED 375,000 9 per cent for taxable income above AED 375,000 and a different tax rate (not yet specified) for large multinationals that meet specific criteria set with reference to ‘Pillar two’ of the OECD Base Erosion and Profit Shifting Project. Federal Tax Authority (FTA) will be responsible for the administration, collection and enforcement of the CT. FTA will soon provide more references and guides about corporate tax and information on how to register and file returns on its website.

KEY POINTS The Corporate Tax Law will be effective from 1 June 2023 with a headline rate of 9%. The regime includes features that represent best practices in international taxation. Several exemptions are available for businesses operating across strategic sectors. Free zone persons can continue to maintain their 0% tax position subject to meeting certain conditions. General anti-avoidance and transitional rules apply from the date the law is published in the Official Gazette. Background On 9 December 2022, the UAE MoF published the Corporate Tax Law, which will be effective from financial years starting on or after 1 June 2023. This follows the public consultation document released on 28 April 2022, which describes the main features of the planned CT regime, as well as the principles applied in the design of such regime. Taxable person Generally, CT will apply to both resident and nonresident persons. A resident person will include: A juridical person incorporated otherwise established or recognized in the UAE (including free zones) A juridical person incorporated otherwise established or recognized outside of the UAE, that is effectively managed and controlled in the UAE A natural person that conducts business activity in the UAE A nonresident person can be subject to CT if it has a permanent establishment (PE) in the UAE, derives UAE-sourced income or has a nexus in the UAE (nexus rules are still to be specified through a Ministerial Decision). Applicable CT rates Generally, UAE businesses will be subject to a 9% CT rate. A rate of 0% will apply to taxable income not exceeding a particular threshold to be prescribed by a Ministerial Decision (expected to be AED375,000 based on the FAQs). While the MoF had previously indicated that a higher rate may apply to large multinationals subject to Pillar Two, the Corporate Tax Law is silent in this respect. Nevertheless, the FAQs reiterate the UAE’s commitment to introduce these rules in due course and further developments are expected. Exemptions Under certain conditions, the following persons will be exempt from CT: A person engaged in the exploitation of UAE natural resources (both extractive and non-extractive) Government and Government-controlled entities Qualifying public benefit entities Charities and public benefit organizations Pension or social security funds Qualifying investment funds Tax base UAE businesses will be subject to CT on their worldwide income. However, dividend income and capital gains will be exempt, subject to meeting the conditions of the participation exemption. The Law also provides for a foreign branch profits exemption where those profits have been subject to tax overseas at a rate of at least 9%. Foreign tax credit will be available for taxes paid overseas on forms of income that are not exempt from UAE CT. Natural persons that are UAE residents and subject to CT will be taxable only on the income earned from business activities undertaken in the UAE. Nonresidents will be subject to CT on any taxable income attributable to a PE or nexus in the UAE or any income that is considered UAE-sourced income. Permanent Establishment Nonresidents will be considered to have a PE in the UAE if they have a fixed place of business or a dependent agent in the country. The language used in the Law to describe these tests seem broadly aligned with Organisation for Economic Co-operation and Development (OECD) standards. The Corporate Tax Law states that other forms of nexus in the UAE that could create a PE will be determined through a Ministerial Decision. UAE-sourced income The Corporate Tax Law provides several examples of income that will be considered as UAE-sourced income. Generally, income earned by a UAE resident person will qualify as UAE-sourced income. Similarly, UAE-sourced income will also include any income derived from activities performed, assets located, or rights used for economic purposes in the UAE. Free zones The Corporate Tax Law introduces the concept of a “Qualifying Free Zone Person” (QFZP), which is broadly defined as a company or branch registered in a free zone that: Maintains adequate substance in the UAE Derives qualifying income (to be specified through a Ministerial Decision) Satisfies transfer pricing requirements Meets any other conditions to be prescribed through a Ministerial Decision A QFZP will still be subject to CT but may benefit from a 0% rate on its qualifying income. A QFZP can elect to forego this preferential regime and be subject to the standard CT rate. Taxable income The accounting income as reported in the standalone financial statements will be the basis to determine the taxable income. This will be subject to adjustments, which include: Unrealized gains or losses which arise in connection to capital items Income and associated expenses derived by an exempt person with respect to its exempt activity Dividend income and other profit distributions from a resident person Dividend income and capital gains under the participation exemption Income from a PE not located in the UAE that has been subject to CT at a rate of at least 9% Income derived by a nonresident from the operation or leasing of aircrafts and ships in international transportation Gains or losses from reorganizations or intragroup transfer of assets and/or liabilities subject to certain conditions Net interest expenditure will be capped at 30% of the EBITDA (earnings before interest, taxes, depreciation, and amortization) Entertainment-related expenses will be deductible up to 50% of the amount incurred With respect to the interest deduction limitation, the Corporate Tax Law indicates that the amount of disallowed expenditure can be carried forward for a period of 10 years. Additional restrictions can apply to related-party debt. The Corporate Tax Law also provides an additional list of non-deductible expenses which includes donations, administrative penalties, recoverable value-added tax (VAT), dividends or similar benefits paid to an owner of a taxable person, among others. Tax loss relief Businesses will be able to carry forward tax losses indefinitely, subject to certain conditions. These losses can be used to offset up to 75% of the taxable income of future tax periods. Losses incurred before the effective date of CT

Corporate Financial Services: Auditing is the process of reviewing and verifying the accuracy of financial records and reports. Auditing is typically performed by an independent third party, such as an external auditor, to ensure that financial records are accurate and reliable. The purpose of an audit is to provide assurance that an organization’s financial reports are fair and accurate, and that they conform to generally accepted accounting principles (GAAP) or international financial reporting standards (IFRS). Auditing reporting is the process of documenting the results of an audit. This includes preparing a report that summarizes the audit findings, including any issues or concerns that were identified during the audit process. The report is typically presented to the organization’s board of directors, management, and other stakeholders. The purpose of the report is to provide information about the financial health of the organization, and to recommend any necessary changes to improve the organization’s financial management practices. For more information and Quotation please click here…