Dubai fz tax

[hanoib]

A lot are in the same boat as you @uraniumze. Let’s wait and hopefully there is good news.

 

[USDT]

Your company's fiscal year is important actually. And it's probably from 1. January to 31. December.

how to determine when the fiscal year for CT begins, if in the Memorandum of association it is December 20?

 

[emihunter]

Please wait for few days there will be a clarification from FTA brining clarity on this. If all your income from outside UAE most likely it won't be taxable in UAE. Will keep you posted on this.

was there any clarification on this?

 

[GerhardStrasser]

I have a marketing fzco in dubai
Registered with IFZA
I read many posts about tax in dubai but until now I do not understand
I don't even understand what they mean by qualified business activity
Do I have to pay taxes or not
Plz advise me

All we know so far: Taxes in Dubai - All you need to know about it

Freezone companies are NOT excepted from corporate tax generally!!! Depends on many details and many of them are not regulated in detail by the authorities.

 

[PiersBlack]

All we know so far: Taxes in Dubai - All you need to know about it

Freezone companies are NOT excepted from corporate tax generally!!! Depends on many details and many of them are not regulated in detail by the authorities.

If we have a IFZA company, is there a mandatory legal requirement that needs immediate action?

Like, is there anything we should be aware of that we need to do right now? Register somewhere? Submit something?

 

[Ancova]

If we have a IFZA company, is there a mandatory legal requirement that needs immediate action?

Like, is there anything we should be aware of that we need to do right now? Register somewhere? Submit something?

I would suggest to apply for VAT and Tax Residency certificate.

 

[GerhardStrasser]

If we have a IFZA company, is there a mandatory legal requirement that needs immediate action?

Like, is there anything we should be aware of that we need to do right now? Register somewhere? Submit something?

You have to register your company for corporate tax in any case.

 

[Gediminas]

I have a marketing fzco in dubai
Registered with IFZA
I read many posts about tax in dubai but until now I do not understand
I don't even understand what they mean by qualified business activity
Do I have to pay taxes or not
Plz advise me

Hey,

In short – if your company was established before 1st June 2023, and your financial year corresponds to the calendar year, profits of 2023 will not be taxable.

Tax will be applied starting from the 2024 period and the first payment will be in 2025.

A company does not need to pay tax if it is engaged in qualified activities, but the list of such activities is very narrow. E-commerce, crypto, and marketing are not on the list. So generally your company will need to pay tax.

The first bracket AED 375 000 will not be taxable. Remaining profit – 9%. If your annual income does not reach AED 3 000 000 you will be able to apply for small business relief and profit tax will not be applied for all profits.

Moreover, we expect that at least initially tax authorities should be quite flexible as regards the attribution of expenses to allowable deductions. If you are a tax resident in Dubai, you can also increase your salary (it is non-taxable for you, but an allowable deduction for the company). Future requirements for accounting and audit should be considered.

If you did not apply for VAT exemption, it might cause problems in the future (during the first audit it will be noticed).

So for sure you have some questions to consider and decide on your strategy and next steps.

 

[JackAlabama]

Hey,

In short – if your company was established before 1st June 2023, and your financial year corresponds to the calendar year, profits of 2023 will not be taxable.

Tax will be applied starting from the 2024 period and the first payment will be in 2025.

A company does not need to pay tax if it is engaged in qualified activities, but the list of such activities is very narrow. E-commerce, crypto, and marketing are not on the list. So generally your company will need to pay tax.

The first bracket AED 375 000 will not be taxable. Remaining profit – 9%. If your annual income does not reach AED 3 000 000 you will be able to apply for small business relief and profit tax will not be applied for all profits.

Moreover, we expect that at least initially tax authorities should be quite flexible as regards the attribution of expenses to allowable deductions. If you are a tax resident in Dubai, you can also increase your salary (it is non-taxable for you, but an allowable deduction for the company). Future requirements for accounting and audit should be considered.

If you did not apply for VAT exemption, it might cause problems in the future (during the first audit it will be noticed).

So for sure you have some questions to consider and decide on your strategy and next steps.

Does the small business relief apply for freezone companies?
So lets say my FZCO makes 1M AED per year in net profit. I pay still 0 in tax until end of 2026 whereas thereafter I pay 9% on 625'000?

 

[GerhardStrasser]

Does the small business relief apply for freezone companies?
So lets say my FZCO makes 1M AED per year in net profit. I pay still 0 in tax until end of 2026 whereas thereafter I pay 9% on 625'000?

Yes, but it's not AED 3mio net profit but revenue.

The official version:
In order to elect for Small Business Relief, an eligible Taxable Person’s Revenue must be below or equal to AED 3,000,000 for the relevant Tax Period and all previous Tax Periods4. Where a Taxable Person’s Revenue exceeds AED 3,000,000 in a Tax Period, the Taxable Person will no longer be able to elect for Small Business Relief, even if its Revenue is equal to or falls below the AED 3,000,000 threshold in subsequent Tax Periods.

 

[JackAlabama]

Yes, but it's not AED 3mio net profit but revenue.

The official version:
In order to elect for Small Business Relief, an eligible Taxable Person’s Revenue must be below or equal to AED 3,000,000 for the relevant Tax Period and all previous Tax Periods4. Where a Taxable Person’s Revenue exceeds AED 3,000,000 in a Tax Period, the Taxable Person will no longer be able to elect for Small Business Relief, even if its Revenue is equal to or falls below the AED 3,000,000 threshold in subsequent Tax Periods.

Got it thanks.

So no tax until 2026 if I have 2M revenue and 1M net profits?

 

[GerhardStrasser]

Got it thanks.

So no tax until 2026 if I have 2M revenue and 1M net profits?

No tax until end of 2026 if your revenue is below AED 3mio.