Dubai used to be a tax-free zone that’s why it was considered a Tax Haven. Dubai has become a business hub due to no tax policies as small businesses can grow easily in such circumstances. But now UAE government has decided to implement Corporate Taxes on businesses in UAE.
Corporate Tax training in Dubai has become essential as business owners are unaware of the tax laws and filing procedures. Implementation of new corporate tax increased the need for knowledge about corporate tax and corporate tax training in UAE/Dubai. So, the business of corporate tax training courses is now blooming in Dubai and UAE.
What is Corporate Tax?
A corporate tax is levied on a corporation’s profits. Taxes are imposed on taxable income, which includes revenue excluding the cost of goods sold (COGS), administrative expenses, sales and marketing, maintenance cost, and other expenditures.
Corporate tax rates differ greatly between countries, with some countries viewed as tax havens due to the relatively low percentages. Corporate taxes can be reduced through a variety of deductions, state subsidies, and various loopholes, so the revised and better corporate tax rate, or the rate a business owner pays, is typically lower than the stated rate before any write-offs.
The implementation date of Corporate Tax in the UAE
The UAE was regarded as a tax haven because there was no income tax imposed on corporate profits. Considering high-profit margins more and more people are entering the business world in UAE because of no tax policy. The government saw an opportunity in this situation to increase the country’s revenue by imposing taxes on the profits of various businesses.
The UAE government’s Ministry of Finance (MOF) announced on January 31, 2022, that new taxes would be implemented in the UAE. They have announced that the corporate income tax will be implemented (CIT). It is scheduled to go into effect on June 1, 2023, throughout the United Arab Emirates and Dubai. It is projected to be beneficial in the long run for the country but in the early stages, it will be difficult for the business owners to adjust and manage their finances.
Objectives of Corporate Tax Implementation in UAE
UAE was a tax-free country throughout its history as it was relying heavily on the oil and gas industry to fulfill the country’s needs. But now the world is shifting toward electrical vehicles and appliances so, in this electrical era, the UAE government had to look for other sources of revenue. The objectives for implementation of Corporate Tax in the UAE are as follow:
1. Meet Global Tax Standards
The United Arab Emirates lags far behind the global tax standards. This new tax implementation is carried out to meet the global tax standards.
- Source of Revenue
While the UAE is rich in oil deposits, the government recognizes that the country cannot rely solely on the oil and gas industry for its overall revenue. Corporate tax implementation has provided the government with a new source of revenue. This is a consistent source of revenue for the government, allowing it to provide better services to the people of the country. As a result, the long-term objective of corporate tax implementation in the UAE is to provide economic support to the country.
- Minimize Burden on Small Businesses
The government said it will minimize the burden on small businesses while shielding them. Corporate tax is mainly implemented on multi-national companies or companies with high annual income so, small businesses will be less burdened in the longer run.
Rates of Corporate Tax in UAE
The UAE, which was once known as a tax haven, still does not impose high corporate tax rates. The UAE government’s proposed rates are quite reasonable when compared to rates around the world. The following are the various corporate tax rates based on the business scale:
- 0% or no corporate tax on small-scale businesses earning up to AED 375,000 (approximately 102,000 US dollars).
- The corporate tax rate will be 9% for businesses earning more than AED 375,000.
- Multinational corporations with revenues exceeding 1.2 billion AED will face a corporate tax percentage of roughly 15%. This rate is calculated by Pillar Two of the OECD Base and Erosion and Profit-Sharing Project.
Corporate Tax Training in Dubai
Because the UAE Ministry of Finance will impose a corporate tax on business profits beginning from or after June 1, 2023, companies with earnings exceeding AED 375,000 will be subject to a standard statutory tax rate of 9%. Understanding the new corporate tax rules and tax filing practices will assist medium and large businesses in avoiding corporate tax compliance violations. Different consulting and training companies like Lynchpin are providing Corporate Tax Training in Dubai on the New UAE Corporate Tax Taxation Policies and Procedures for corporate businesses.
- Contents of Corporate Tax Training in Dubai
At Training and Consulting Institutes like Lynchpin in Dubai, everything you need to know about preparing your company for the new corporate tax regime is covered, which is set to take effect at the end of 2022. Corporate Tax training short course delves into many key sections of UAE federal corporate tax law. The following topics are covered in the Corporate Tax training in Dubai course:
- Introduction to federal income taxation in the UAE for businesses and their stockholders.
- Relevant Internal Revenue Code provisions, corporate tax filing procedures, required documentation, and corporate tax return filing
- Review the fundamentals of tax law, including the roots of taxation, the three sources of tax law, the tax law hierarchy, and judicial dogmas.
- How to Determine Corporate Income Tax Liability and the Corporate Alternative Minimum Tax
- Various tax planning approaches and methods for minimizing tax burden within the legislative structure.
- Enrolling Criteria for Corporate Tax Training in Dubai
The Corporate Tax Training course in Dubai is best suited for the following professionals:
- Professionals seeking in-depth knowledge of corporate taxation
- Professionals holding a prominent authoritative position within an organization with functional, managerial, or both responsibilities.
- Anyone in a corporate audit department (with a profit margin of more than AED 375,000) who wants to handle his own corporate tax returns filing
- Anyone interested in learning more about corporate taxation
- Outcomes of Successfully Completed Corporate Tax Training in Dubai
Participants should be able to fulfill the following outcomes after completing the Corporate Tax training course:
- Understand the principle of the Corporate Tax in UAE and how it affects different businesses
- Recognize the implications of the Corporate Tax in UAE on the business’s performance and profitability.
- Distinguish between the various types of businesses that are free from corporate tax in Dubai or the UAE
- The scope of corporate taxation in the UAE and how it is calculated.
- Corporate Tax Return Submission
- Identify and eliminate potential errors in Corporate Tax calculations
Businesses in which Corporate Tax is implemented
The implemented corporate tax will apply to the following businesses and individuals:
- Revenue generating commercial, industrial, and other types of professional businesses and industries
- On an individual level. On individuals having a business license or permit to work and perform any kind of commercial or professional activities on UAE premises.
- Freelancers requiring any kind of permit license
- On local banking services (foreign banks are exempted because they are already giving tax on their profits)
Exemptions from Corporate Tax
According to the Ministry of Finance, the new corporate tax in the UAE will not apply to the following businesses and incomes:
- Businesses fully owned by the UAE government that carry out work for the country’s revenue generation
- Businesses that are involved in the extraction and refining of natural resources like oil and gas
- Charity and other government-based organizations listed by the Cabinet on the request of the Ministry of Finance
- Also, individuals not working under any business or freelancing license will be exempted from the corporate tax
- Foreign investors who earn their income through different investments in UAE-based companies
Failure to comply with the tax reforms
People will look to avoid these tax deductions to avoid deductions from their income, as in many other countries. The government will undoubtedly enact strict policies against tax evasion, and those who commit fraud will face financial penalties. Under the worst scenario, they may have their business license revoked. So, people should stop performing these scams and prepare for tax reforms ahead of time through Corporate Tax Training in Dubai.
Why Choose Lynchpin for Corporate Tax Training in Dubai?
Lynchpin Training and Consulting is one of the most well-known institutes in Dubai for providing all types of accounts and finance-related training courses and consultancy services. As we all know new corporate tax will be implemented in the UAE starting from 1st June 2023 so, our training and consultancy services will help you to train the businesses for the upcoming corporate tax. We will provide in-depth knowledge and training about the new corporate tax regime in the UAE and will help your business grow in this new financial dilemma.
Our new Corporate Tax Training in Dubai course is designed to facilitate business owners and other professionals about the practical knowledge and training of corporate tax. After successful completion of our training course, individuals will be able to handle all the filing procedures of the corporate tax independently. Individuals if interested can get in-depth knowledge of corporate tax to start their career in the field of Corporate Tax training and Consultancy. We guarantee you that we provide one of the best Corporate Tax Training courses in Dubai.