Many governments globally are discouraging multinationals from shifting profits - and tax revenues - to low-tax countries regardless of where their sales are made.
Its been analyzed that Income from intangible sources such as patents, software and royalties on intellectual property has migrated to these jurisdictions and offshore tax havens, allowing companies to avoid paying higher taxes in their traditional home countries.
From media sources we have understood that the G20 and OECD have ensured 15% as the global minimum tax rate on multinationals which aims to put an end to decades of tax competition between governments to attract foreign investment.
Economists expect this move will encourage multinationals to repatriate capital to their country of headquarters, giving a boost to those economies.
Recently UAE has announced a corporate tax (CT) . It is a form of direct tax levied on the NET income or profit.
Corporate Tax is sometimes also referred to as “Corporate Income Tax (CIT)” or “Business Profits Tax” in other jurisdictions.
Based on our internal study corporate income tax rates for multinational entities doing business in the GCC are:
UAE corporate tax rate in comparison to other below listed countries globally
Large multi-national companies will have to pay the international rate of 15 per cent, and with a double taxation agreement this will mean they will not pay any additional tax over this level on their UAE business revenue.
The UAE intends to honor its commitment to businesses registered in Free Trade Zones to the extent that such businesses do not conduct business with mainland shall be subject to zero percent tax. All free zones must file an annual Corporate Tax return.
Businesses with presence in both Mainland UAE and Free Trade Zones as well as those operating under the dual license scheme should consider the impact on their operating model.
Dividends and capital gains earned by a UAE business from its qualifying shareholdings will be exempt from UAE CT. More clarification about Qualifying shareholdings and on this subject is required.
For more information on Corporate Tax UAE, kindly seek advise from a tax consultant.
To establish your company, setup your startup , incorporate your business in Dubai UAE , decide on your licence type , business activities , company structure , single person , branch, employment partner visa process , dubai uae residency, Understand the new UAE labour law , company liquidation, invest in Dubai please contact us on 00 971 52 375 2391 by WhatsApp or email us at contact@bizvise.ae and we’ll be happy to assist you.