As the UAE rolls out corporate tax regulations, businesses across the country must prepare for compliance and strategic planning. Starting from June 2023, companies with a net profit above AED 375,000 are required to file and pay corporate tax. By 2025, tax compliance will be under stricter scrutiny, and the Federal Tax Authority (FTA) is expected to enforce tighter audit and filing processes.
What You Should Know:
- The current tax rate is 9% on qualifying profits above AED 375,000.
- Free zone businesses may still benefit from 0% tax if they meet specific criteria such as not conducting business with mainland UAE.
- Businesses must register with the FTA, maintain audited financials, and file tax returns annually.
Who Is Affected?
Small, medium, and large enterprises operating in the UAE, including local and international companies, must evaluate how these regulations apply to them. Entities previously enjoying complete tax exemption will now need to reassess their tax obligations.
In addition, business owners need to consider how corporate tax impacts cash flow and pricing strategies. Proactively adapting your business model to account for the new tax regime is crucial to remain competitive and compliant.
The Role of Strategic Planning
Tax planning will become an essential part of financial management. Businesses should consider restructuring, reviewing transfer pricing practices, and ensuring financial statements are up to date and compliant with international standards. Staying ahead of regulatory updates, leveraging tax incentives where applicable, and adopting proper accounting systems can prevent costly errors and penalties.
How Profits Plus Can Help
Profits Plus assists businesses through each step of corporate tax readiness, from FTA registration and documentation to tax return filing and audit preparation. Our tax experts ensure your business remains compliant and penalty-free while optimizing your tax position. We also offer advisory on free zone tax status, deductible expense planning, and automation of tax reporting.