UAE to introduce 9% corporate tax on business profits from June 1, 2023 (FZCO REMAINS 0%)

[Bill D]

A few more analyzes came out : "They further said individuals will still not be subject to tax on their incomes from employment, real estate, equity investments or other personal income unrelated to a UAE trade or business. The tax also won’t be applied to foreign investors who don’t conduct business in the country."
https://www.zawya.com/en/economy/gcc/corporate-tax-set-to-modernise-uaes-economic-ecosystem-apeunt4q

" Individuals are considered ‘resident’ only if he or she conducts business activities in the UAE. A Cabinet Decision will be subsequently issued for specifying the ‘business activities’ in this regard."
https://www.linkedin.com/feed/update/urn:li:share:7020738676905099264
We are at the few months of the introduction but still do not know if trading regularly your own assets (actively) is within the scope of the CT, does a lawyer has a better idea ?

 

[Martin Everson]

On UAE Corporate Tax, free zone businesses await final word on 'qualifying income'​

https://gulfnews.com/business/marke...nal-word-on-qualifying-income-1.1674533466439

----- quote start

Dubai: With registrations having opened for UAE’s corporate tax compliance, free zone based businesses and their owners are awaiting clarification on ’qualifying income’ for ‘free zone persons’.

The Federal Decree Law stipulates free zone persons could benefit from a 0 per cent UAE Corporate Tax on the qualifying income. “The qualifying income is to be defined in a separate Cabinet decision,” said Raju Menon, Chairman and Managing Director at the audit consultancy Kreston Menon.

Based on available guidance from the UAE Ministry of Finance, the qualifying income ‘should include offshore as well as onshore sources of income of free zone persons subject to strict conditions,” said Menon. “Hence, there should be detailed guidance forthcoming on this aspect.”
Under the UAE CT Law, free zone persons without an onshore base can transact with companies operating on the UAE mainland and benefit from 0 percent tax rate in scenarios to be specified. Such income could include 'passive income'.

The countdown has started on the process that will eventually lead to businesses in the UAE coming under a 9 per cent corporate tax regime from mid-2023. The tax rate, announced last year, ensures the UAE has one of the lowest CT regimes in the world, thus providing more incentives for businesses based here and those wanting to come in and launch.

-----quote end

 

[Martin Everson]

UAE confirms major tax update​

UAE Ministry of Finance publishes approved Cabinet decision on Corporate Tax threshold

https://www.arabianbusiness.com/politics-economics/uae-confirms-major-tax-update

 

[yngmind]

UAE confirms major tax update​

UAE Ministry of Finance publishes approved Cabinet decision on Corporate Tax threshold

https://www.arabianbusiness.com/politics-economics/uae-confirms-major-tax-update

haven't learned anything new from the article.
Arabianbusiness usually posts s**t

 

[Fred]

haven't learned anything new from the article.
Arabianbusiness usually posts s**t

Amen.

 

[Moonlighter]

Laws to comply with international standards does not mean they will be enforced. UAE won't establish a Gestapo style tax authority to scare away wealthy expats. Their goal is to get rid of the FATF grey list.

One can draw comparisons to the laws to protect low income labour and prevent money laundering. Well enforced laws

 

[Martin Everson]

Their goal is to get rid of the FATF grey list.

In addition to complying with the OECD obligations they signed up to .

 

[Fred]

In addition to complying with the OECD obligations they signed up to .

It's indeed the OECD they are talking about internal and the biggest goal is not to be another Cayman Islands - 2 weeks ago the FTA did invite to the Marina and made some points pretty much clear.

One of the points they made pretty clear is that they don't want your money - that's enough information someone requires to do the math and to understand that they don't start 01.06 to put you in jail like our beloved "Finanzamt" in Germany for example.

 

[sergeylim88]

any news about this?
can someone tell me starting from when i need to do audit?
also how can i determine my start of financial year?

 

[bedouin]

calling @Fred to enlighten us

 

[sergeylim88]

as i can read fzco has to choose will it be taxed or will it apply for the "qualifying income" approach
how does that fzco choose?

how do you keep accounting? will an excel spreadsheet work (with figures)?
anyone using paypal? ther statements are very difficult to read...not sure how should they be shown in the accounting

 

[turtle]

Still no proper explanation and no one knows the meaning of "qualifying income". Unfortunately UAE can't adopt those changes professionally. Expect more problems and lots of confusion in 2023 and 2024.

 

[Fred]

Still no proper explanation and no one knows the meaning of "qualifying income". Unfortunately UAE can't adopt those changes professionally. Expect more problems and lots of confusion in 2023 and 2024.

That's it.

Too much pending to give a qualified response to this questions.

Reality looks like no one knows anything for sure - every day a UAE News Paper releases an article about the 9% CT which turns out to be then basically a paid advertising from a UAE Accountant / Audit Company.

How they handle this actually gives us at least an indication how they look at it in practice - they want satisfy OECD/FATF in first place everything else has no priority in reality.

Don't rush now and fall for that 2000aed/month accountant around the corner telling you bulls**t.

 

[Bill D]

Even profits over $100K shouldn't be taxable for FZs or FZ-based freelance permits as longs they don't conduct business with UAE.


What do you mean by substance? Residency visa or home address in UAE?

but managing his operation from your Dubai flat = conducting business in the UAE ?

Let's say someone manage and trade actively his personnal assets from the UAE, but on his computer, online, on online marketplaces licensed all over the world(could include uae sometimes as some platforms are licensed in uae)
do you consider he is conducting business in the UAE and subject to 9% or not ?

 

[turtle]

but managing his operation from your Dubai flat = conducting business in the UAE ?

Let's say someone manage and trade actively his personnal assets from the UAE, but on his computer, online, on online marketplaces licensed all over the world(could include uae sometimes as some platforms are licensed in uae)
do you consider he is conducting business in the UAE and subject to 9% or not ?

Conducting business in UAE means that you have an income from UAE.

 

[Bill D]

Conducting business in UAE means that you have an income from UAE.

if you trade your own asset from Dubai, online, it is considered as an income from UAE or from the place the platform you trade on is incorporated ? Will trading on binance as well as traditional stock brokers be taxed ?

 

[turtle]

if you trade your own asset from Dubai, online, it is considered as an income from UAE or from the place the platform you trade on is incorporated ? Will trading on binance as well as traditional stock brokers be taxed ?

Financial operations are a completely different topic and subject to different regulations, you need to check with a professional. My comments about CT are about e-commerce, trading or professional services.

 

[Bill D]

Financial operations are a completely different topic and subject to different regulations, you need to check with a professional. My comments about CT are about e-commerce, trading or professional services.

yes I am meaning actively trading, day trading, as there are not CGT in Uae and no plan to have one, but as I understood these transaction could be taxed as business income

 

[yngmind]

if you trade your own asset from Dubai, online, it is considered as an income from UAE or from the place the platform you trade on is incorporated ? Will trading on binance as well as traditional stock brokers be taxed ?

Yes, you will be taxed even with a foreign corp.

Because of PE, your company will be managed from the UAE, which means CT will apply.

 

[Bill D]

Yes, you will be taxed even with a foreign corp.

Because of PE, your company will be managed from the UAE, which means CT will apply.

I mean as an individual (physical person) trading your own assets, not as a company