UAE announces list of entities exempted from corporate tax

[JustAnotherNomad]

Has anyone actually sort local legal opinion on their setup? Or is everyone making an educated guess based on the various publications? It might be worthwhile doing so to have the legal opinion on paper in case a challenge to ones assumption is made by the tax man.

Hahahahaha, have you ever been to the UAE?

 

[joffreylol]

I'm long enough on this forum to know that he used to live there and ran away from the country when his rental? cheque bounced. It was criminal to have your cheque bounce so it's not fun going to jail because of a silly law.

 

[JustAnotherNomad]

You can't get a legal opinion in the UAE. I mean, you can get an opinion, but it's just that, an opinion. It's just something some expensive lawyer pulls out of their a*s.
It has no relevance for anything. The lawyer won't be liable. The state won't care about the lawyer's opinion. A complete waste of money.
And even from the state you won't be able to get a ruling, unless it's too late and your already on trial.
For me that's the biggest negative with the UAE. Then again, people are "usually fine". You have to know that if you want to live in the UAE, you have to accept this risk.

 

[Martin Everson]

Hahahahaha, have you ever been to the UAE?

Lived there mate and dealt with legal system. Never again.

You can't get a legal opinion in the UAE.

I did and left like 1000's of others did back in the day until changes in the law.

I mean, you can get an opinion, but it's just that, an opinion.

But you just said you can't get a legal opinion.....lol. I think you misunderstood what I wrote

---- quote start

Solicitors routinely provide opinions on a wide variety of issues, and legal opinions are an essential part of many major transactions. In each instance, the solicitor involved is expected to provide an opinion that is both legally correct and not misleading to the addressee. The purpose of providing the legal opinion is two-fold:

• to inform the addressee of the legal effect of a transaction or matter; and
• to identify legal risks that the addressee should consider and further evaluate.

In general, solicitors are carefully not to phrase the opinions they provide in such a manner as to attract strict liability even though parties requesting the solicitor's opinion have an expectation that the solicitor will be liable if he or she is negligent. Words implying a standard of care beyond ordinary negligence such as "I certify that . . . " ‎should be avoided in a legal opinion.‎ However, it is important to remember that a solicitor’s opinion is only an opinion — not a guarantee.

---- quote end

 

[JustAnotherNomad]

What's the point of getting an opinion when not even the government knows what the rules are?

 

[Fred]

Has anyone actually sort local legal opinion on their setup? Or is everyone making an educated guess based on the various publications? It might be worthwhile doing so to have the legal opinion on paper in case a challenge to ones assumption is made by the tax man.

Yes - we did and while the FTA made clear that they want to have the people register for CT returns they made clear in the same sentence that they are not after the money.

They play it smart - they let PwC "help" them with the formulations etc. and keep themselves in the background but host from time time some FTA Events when they invite corporates like Siemens, Mercedes etc. and when there legal team asks questions they most likely even don't get a response.

We prepare for soft audits - not even audits by a chartered accountant - and provide this to our clients - even giving them all tools on hand - so far we can't see a reason why this shouldn't go through.

Look at Cyprus - even part of the EU and how they play the famous "gap" between the written law and the law enforcement - nothing else will be the case here in the UAE.

 

[bnpsu]

So they clarified now that Offshore Companies remain Corporate Tax exempt and not like guys speculated here months ago to have EU high tax country like CFC rules etc.

I'm surprised about everyone who is actually surprised about such an outcome.

Next Freezone Companies without local UAE Mainland income remain Corporate Tax Exempt - wait for it.

This is great news! Is there any source of this where we can see this?

Not ignoring it per se. They recognize the LLC as tax transparent and as a result they apply personal taxes to you.
Different story is if the LLC is a real corp, and as a result not tax transparent.

UAE government can lack in a bunch of things, but they are not retarded. They understand why most people live there, and based on that they create rules to keep all parties happy; all parties being residents and OECD.

Tons of countries consider US LLCs as tax transparent too, Spain for example does and its nowhere near a low tax jurisdiction.


EDIT to add: A US LLC is basically just you with a front name. It's not a real corporation unless you apply for S/C corp status. It only serves the purpose of reducing liability, but for tax purposes it's just you.

Hey, is there anywhere where I can see this ruling? This would be great news. Thank you!

 

[JustAnotherNomad]

So far its a regular LLC and hasnt filled for S/C corp status, yes. They will consider it as the tax transparent LLC that it is.
So personal taxes will apply and those remain at 0

They explicitly state that natural persons like freelancers can also be subject to corporate (!) income tax. So I wouldn't be so sure about that.
That said, even if they wanted to tax such cases, it would probably take a long time, before we'll see it.

 

[Offshore13]

They explicitly state that natural persons like freelancers can also be subject to corporate (!) income tax. So I wouldn't be so sure about that.
That said, even if they wanted to tax such cases, it would probably take a long time, before we'll see it.

As far as I know, after speaking with the accountancy firm I am working with they have mentioned that Freezone companies don't have to register now with the corporate Taxes on the UAE Tax website from June 2023. They are beginning to open the registration but for now Greezones are exempted if they don't deal with mainland clients. Now I am asking myself what about Freezone companies with consulting customers outside of UAE and selling on Amazon in UAE, does this count as dealing with mainland clients?

 

[TheCryptoAnt]

They explicitly state that natural persons like freelancers can also be subject to corporate (!) income tax. So I wouldn't be so sure about that.
That said, even if they wanted to tax such cases, it would probably take a long time, before we'll see it.

word, info was different back then.

tbh im waiting for everything to be set and clear. If they introduce income tax for freelancers its gonna get bad.

 

[algotrader]

There won't be anything clear set in stone. The decree has been formulated in such a way that the criteria for what defines "qualified income" can be changed at any moment by the minister through a separate decree. My impression is that they wanted to see how far they can go with respect to EU and FATF. Apparently, they already went too far and will now have to row back to get off black/grey list.

 

[karishi]

They explicitly state that natural persons like freelancers can also be subject to corporate (!) income tax. So I wouldn't be so sure about that.
That said, even if they wanted to tax such cases, it would probably take a long time, before we'll see it.

Freelancers in the UAE have a specific visa which is setup like a company. That is going to be taxed.