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

[EliasIT]

What do you mean?If you have to transfer residency to UAE, Italy for example doesn't accept bank statements as proof of residence, they want a tenancy contract and more.

how are we able to provide this, we will need some sort of professional to help us or can one get this at his own?

 

[JamesDonkey]

Technically - in 2022 - a UAE Bank can only get you AED without any substance - that's like a basic account for business within the UAE.

Why can't AED be used for international business? Outgoing and incoming payments will be converted to/from USD, EUR and others, and hence small FX losses. Is that it? Does it have a big impact?

 

[Martin Everson]

Now the OECD bullying starts. UAE about to face what we in Caribbean have already been through with them .

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UAE, OECD discuss global tax standards, tax challenges arising from digitalising the economy​

The UAE Ministry of Finance and OECD officials also discussed the need to address base erosion, profit shifting, economic substance regulations, and common reporting standards.

In addition, the officials also deliberated on the UAE’s readiness to implement the global consensus to address tax challenges arising from the digitalisation of the economy.

The officials also discussed the need to combat base erosion and profit shifting (BEPS), as well as the latest updates on the requirements of country by country reporting (CBCR), the economic substance regulations (ESR), and the common reporting standards (CRS).

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[karishi]

Why can't AED be used for international business? Outgoing and incoming payments will be converted to/from USD, EUR and others, and hence small FX losses. Is that it? Does it have a big impact?

1% of each transaction you receive I think/

Now the OECD bullying starts. UAE about to face what we in Caribbean have already been through with them .

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UAE, OECD discuss global tax standards, tax challenges arising from digitalising the economy​

The UAE Ministry of Finance and OECD officials also discussed the need to address base erosion, profit shifting, economic substance regulations, and common reporting standards.

In addition, the officials also deliberated on the UAE’s readiness to implement the global consensus to address tax challenges arising from the digitalisation of the economy.

The officials also discussed the need to combat base erosion and profit shifting (BEPS), as well as the latest updates on the requirements of country by country reporting (CBCR), the economic substance regulations (ESR), and the common reporting standards (CRS).

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Well what makes the UAE special is that you are considered a resident if you enter the country once every six months, so there is no CRS reporting. As long as that doesn't change, they can discuss forever, because that's the loophole. Of course if you don't have a tax certificate, you can't really use the money outside UAE, so it's not a gigantic loophole, but it's what makes UAE attractive in my opinion.

 

[Martin Everson]

Well what makes the UAE special is that you are considered a resident if you enter the country once every six months, so there is no CRS reporting.

The OECD will change this .

Hopefully you can see the obvious problem in claiming residency for a place you visit only 2 days a year.

 

[JamesDonkey]

The OECD will change this .

Hopefully you can see the obvious problem in claiming residency for a place you visit only 2 days a year.

It will? Or you think it will? Or you wish it would because you envy the people who have it?

1% of each transaction you receive I think/

And? What is it what makes an AED account unfit for an international business?

 

[JackAlabama]

1% of each transaction you receive I think/


Well what makes the UAE special is that you are considered a resident if you enter the country once every six months, so there is no CRS reporting. As long as that doesn't change, they can discuss forever, because that's the loophole. Of course if you don't have a tax certificate, you can't really use the money outside UAE, so it's not a gigantic loophole, but it's what makes UAE attractive in my opinion.

Panama and HK have even less requirements where you can be absent for 2 or 3 years.

 

[karishi]

The OECD will change this .

Hopefully you can see the obvious problem in claiming residency for a place you visit only 2 days a year.

You don't need to claim residency, you only need to put your money away there. And then you claim residency outside of your country but in a different state where you have nothing.
All borkerage/bank accounts stay with the UAE residency, so there is no CRS. No banks outside UAE, only Wise.
When you want to spend the money outside of the UAE you will have to spend 3-4 years to get the tax certificates to be able to buy a house.
This of course assumes no wife and no kids.

Panama and HK have even less requirements where you can be absent for 2 or 3 years.

Yeah but I feel money is safer in the UAE. No need to change for now, I also like Dubai and it's closer to everything, I spend 1-2 months there as I have friends and clients there.

 

[JackAlabama]

1% of each transaction you receive I think/


Well what makes the UAE special is that you are considered a resident if you enter the country once every six months, so there is no CRS reporting. As long as that doesn't change, they can discuss forever, because that's the loophole. Of course if you don't have a tax certificate, you can't really use the money outside UAE, so it's not a gigantic loophole, but it's what makes UAE attractive in my opinion.

Why "can't you really use the money outside UAE" without a tax certificate?

 

[karishi]

Why "can't you really use the money outside UAE" without a tax certificate?

Let's say you go and buy a house. In any country if you buy a house the tax authority asks you the question: where is this money coming from?Where did you pay taxes on this?And you have no answer. So of course you can use some money outside of the UAE, but you can't purchase properties or stuff like that.

 

[Fred]

Let's say you go and buy a house. In any country if you buy a house the tax authority asks you the question: where is this money coming from?Where did you pay taxes on this?And you have no answer. So of course you can use some money outside of the UAE, but you can't purchase properties or stuff like that.

A Tax Certificate doesn't explain where your money comes from.

A Tax Certificate is used when your Home Country Tax Authorities challenge your Tax Residence Status.

You can utilise your money from the UAE worldwide without any issues.

Of course you can't claim Residence in UAE, showing up 2 days a year in the UAE and then purchasing in your home country property while you are still living there fullt time.

I think or lets say I hope - this is clear for everyone anyway.

 

[karishi]

A Tax Certificate doesn't explain where your money comes from.

A Tax Certificate is used when your Home Country Tax Authorities challenge your Tax Residence Status.

You can utilise your money from the UAE worldwide without any issues.

Of course you can't claim Residence in UAE, showing up 2 days a year in the UAE and then purchasing in your home country property while you are still living there fullt time.

I think or lets say I hope - this is clear for everyone anyway.

A tax certificate explains that you have paid taxes somewhere on your money. Sure it doesn't mean that the money comes from legitimate business but it clarifies the fact that you have paid taxes on that money, even if taxes are 0 like in Dubai.
The issue is not only with your home country, in whatever country you go, at least in Europe, and buy a house, you will get asked from where that money comes from and if you have paid taxes on it. You can't go to Spain and buy a house and say to the hacienda that you have no tax certificate. That's what I mean with "you can't use your UAE money", if you stay in the UAE less than 180 days and get a tax certificate, which is what most digital nomads do.

 

[Martin Everson]

It will? Or you think it will? Or you wish it would because you envy the people who have it?

All three...lol.

No I am speculating obviously but I think it will change. Depending on what OECD agrees with UAE it maybe as simple as reporting accounts of residents without fiscal tax residency to persons home country. Read that as people spending less than 183 days a year in Dubai. It will be similar to the way UAE is made to report UAE companies without economic substance to a UBO's home country currently.

P.S Envy..lol...I Iive on a tax free island remember .

 

[karishi]

All three...lol.

No I am speculating obviously but I think it will change. Depending on what OECD agrees with UAE it maybe as simple as reporting accounts of residents without fiscal tax residency to persons home country. Read that as people spending less than 183 days a year in Dubai. It will be similar to the way UAE is made to report UAE companies without economic substance to a UBO's home country currently.

P.S Envy..lol...I Iive on a tax free island remember .

But the substance of UAE is your residence, so if you have a UAE company and you are a UAE resident, and you are employed by your company, you are ok even if you stay 2 days in the UAE. I mean, of course it doesn't make sense to really stay only 2 days, I think that 1-2 months are better to be on the safe side, but in general your company wouldn't be reported in this case because it would have suvbstance.

 

[Martin Everson]

But the substance of UAE is your residence, so if you have a UAE company and you are a UAE resident, and you are employed by your company, you are ok even if you stay 2 days in the UAE. I mean, of course it doesn't make sense to really stay only 2 days, I think that 1-2 months are better to be on the safe side, but in general your company wouldn't be reported in this case because it would have suvbstance.

A piece of paper is not substance unfortunately. It would make sense to be present at least 6 months or 183 days like most other countries. Otherwise they should classify you a non-fiscal resident and report you to home country. 2 days is a joke and so is 8 weeks.

Again its just my speculation as UAE fake residency is known issue globally.

 

[JackAlabama]

A piece of paper is not substance unfortunately. It would make sense to be present at least 6 months or 183 days like most other countries. Otherwise they should classify you a non-fiscal resident and report you to home country. 2 days is a joke and so is 8 weeks.

Again its just my speculation as UAE fake residency is known issue globally.

It is by far not the only one doing that and it is even pretty strict compared to HK and Panama where you can be absent for 3 or 2 years.
Bahamas seems to be very lax as well.
https://english.elpais.com/economy_...tax-agency-followed-the-trail-of-shakira.html

 

[Martin Everson]

Bahamas seems to be very lax as well

Yes because we are a banana republic and one reason why we come off and on blacklists everyday. But look what happening to Shakira for using that nonsense paper residency. It should serve as a lesson to any fool thinking it will work for them.

 

[zzzzzz]

Yes because we are a banana republic and one reason why we come off and on blacklists everyday. But look what happening to Shakira for using that nonsense paper residency. It should serve as a lesson to any fool thinking it will work for them.

She is naive. It can work for a single, low profile person, who loves paying with cash, travels a lot and is bald. Let's be honest, using hairdresser twice per week alone, makes her vital interest in Spain

 

[Martin Everson]

lol..anyway back to topic plz.

 

[For Free]

I opened a Mashreq bank account for Sharjah FZ 1.5 years ago in 2 weeks. The Sharjaz FZ company has no office and no flexi desk. Maybe they considered my business very safe but it was 1.5 years ago it can be different now as you mentioned.

@rowena I had Mashreq account 4-5 years ago then they decided to close many FZC accounts in 2019. However I heard that they re-opened for FZC again from 2021. But my friend said that they screw customers with bad services and often ask for supporting documents, do you get any problem with Mashreq?