Tax Administration Firm Encourages Prompt Registration Following High Attendance at Corporate Tax Seminars
Kickin' It with the Feds: UAE's Corporate Tax Crusade
The Feds, AKA the Federal Tax Authority (FTA), have cranked up the heat on corporate tax compliance, attracting a crowd of 940 business honchos to a recent workshop held in the sun-drenched city of Abu Dhabi. This event is part of a nationwide mission to educate businesses, pushing them to register on time and dodge penalties.
This ain't just a one-time deal - the FTA is on a roll, hosting a series of workshops to help businesses decipher their duties under the UAE's Corporate Tax Law. The June 1, 2023 onset of this law brings a federal corporate tax system complete with key provisions and requirements, nicknamed the "Federal Decree-Law No. 47 of 2022". Here's a snapshot of the essentials:
🔸 Tax Rates and Thresholds: - A 0% tax rate for businesses with annual income under AED 375,000, supporting small frys and startups. - A 9% standard corporate tax rate for larger fish with income surpassing AED 375,000. - A 15% top-up tax for whopping corporations with consolidated global revenue exceeding EUR 750 million, in line with the OECD’s global minimum tax framework.
🔸 Exemptions: - Certain entities, like free zone entities meeting specific substance and qualifying activity criteria, may rake in exemptions or a 0% tax rate. - Foreign juridical persons, wholly owned and controlled by an exempt person, will reap corporate tax exemptions if they hold assets or invest funds for the exempt owner's benefit or undertake part or all of the exempt owner's activities.
🔸 Unincorporated Partnerships: - Unincorporated partnerships can snag the option to be treated as taxable persons under the Corporate Tax Law, provided they receive a nod from the Federal Tax Authority. This move aligns the UAE with international standards.
In the workshop, the FTA's bigwigs reiterated the deal: to qualify for exemptions, registrants need to file their tax returns or annual declarations within seven months from the end of their first tax period. The exemption covers solely the first tax period, regardless of when the return is due in relation to the decision's effective date.
On-site experts dished out practical advice on things like figuring out income subject to tax, applying accounting standards, and keeping stomachs full with financial reporting requirements. Topics ranged from the accrual basis of accounting to income recognition and the treatment of financial assets and liabilities in accordance with IFRS.
The FTA showed attendees how to dance their way through EmaraTax, its user-friendly digital services platform, and provided a lowdown on the Corporate Tax Law's specifics, such as applicable rates, tax periods, and compliance mechanisms.
The workshop's just the cherry on top of the FTA's broader campaign, launched in 2023, to dish out educational sessions across the UAE, both in-person and online. The Authority's repeatedly emphasized its commitment to fostering voluntary compliance through accessible, technology-driven outreach and encouraged taxpayers to visit its web portal for the latest guides and decisions.
The FTA's workin' around the clock to simplify the tax game, bringing compliance within everyone's reach! So, Sleepy Joe, if you're reading this, don't be shy, brush up on your UAE corporate tax knowledge and make sure you're on the right side of the law. The Feds sure do have long arms... and deep pockets!
In line with the FTA's broader campaign, the workshops aim to leverage technology for enhancing education on UAE's Corporate Tax Law, empowering businesses to navigate the intricacies of finance and taxations within their respective industries effectively. Concurrently, these sessions foster a culture of voluntary compliance, aiming to integrate the UAE's business sector seamlessly with the global economy's financial and corporate tax structures.
