Analytics and brochures

The UAE MoF in Article 2(1)(k) of the Decision No. 139 qualified for 0% Corporate Tax rate ‘Distribution of goods or materials in or from a Designated Zone to a customer that resells such goods or materials, or parts thereof or processes or alters such goods or materials or parts thereof for the purposes of sale or resale’. Read more in the article of Andrey Nikonov, Senior Partner.

A holding company is registered in the UAE free zone. It earns dividends and capital gains. Every once in a while, the Company deposits money in interest bearing accounts in UAE and foreign banks. The holding of shares qualifies for a 0% Corporate Tax rate, while interest on deposit in an independent bank does not. In some financial periods, interest added to some occasional non-qualifying income received may increase to 5% of the total revenues or 5,000,000 AED.  The question: is there any option to apply the 0% Corporate Tax rate to interest paid to deposit account holders? Read more in the article of Andrey Nikonov, Senior Partner, and Maria Nikonova, Partner.

The UAE Corporate Tax Law does not provide for separate tax accounting. The initial basis for calculating the corporate tax base is the financial statements, i.e. accounting data. This data is subject to adjustment in cases where the accounting rules of a particular transaction differ from the rules established for tax purposes. Read more in the article of Andrey Nikonov, Senior Partner. 

The institute of a tax assessment review has been launched by Art. 28(1) of the new Law on Tax Procedures, i.e. it is applicable from March 1, 2023. It has added an optional tier, a new opportunity to have a tax assessment dismissed or decreased. Previously a taxpayer could only file a reconsideration request with the FTA to challenge an assessment. This filing was (and continues to be) an obligatory step to pass the dispute to external institutions (the Tax Dispute Resolution Committee (TDRC) under the jurisdiction of the Ministry of Justice and federal courts). Read more in the article of Andrey Nikonov, Senior Partner. 

Corporate tax has been put into application in the United Arab Emirates starting from 1 June this year. The first tax period for Emirati companies will be the first calendar year or a 12-month period after 1 June for which financial statements are drawn up (articles 57 and 69 of Federal Decree-Law No. 47 (2022) “On the taxation of corporations and businesses” (the “Law on Corporate Tax”)). For most companies, the first tax period will be 2024, and business does not have much time left to prepare for the corporate tax regime in the UAE. Read more in the article of Maria Nikonova, Pepeliaev Group's partner.