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The UAE Federal Tax Authority (FTA) has published an October 2024 guide explaining corporate tax rules for natural persons engaged in real estate investment. This new guide clarifies how natural persons can benefit from tax exclusions when their real estate activities are deemed personal investments, rather than taxable business income, under Cabinet Decision No. 49 of 2023. Key Highlights: - Definition and Scope: Real estate investment for tax exclusion includes leasing, selling, or sub-leasing properties by individuals, provided these activities don’t require a business license. - Tax-Exempt Income: The guide specifies that income from personal real estate investments, such as rentals and capital gains from property sales, is generally not subject to corporate tax. - Thresholds and Licensing Requirements: Natural persons must only register for corporate tax if their business activities surpass an AED 1 million turnover threshold. Real estate income earned without a business license remains outside the scope of corporate tax. - Arm’s Length Transactions: Transactions with related parties, such as family members, must follow the arm's length principle to ensure fair tax treatment. - Jointly Owned Properties: For co-owned real estate, each owner's share of income may qualify for the exclusion if they do not require a business license.   This guide provides essential clarification for UAE residents on the tax treatment of real estate investments, helping natural persons navigate corporate tax obligations effectively. #UAERealEstate #CorporateTaxGuide  #FTAGuidelines #TaxExemption #PersonalInvestment  #RealEstateInvestment  #CorporateTaxUAE  #NaturalPersonsTax #TaxComplianceUAE #FTAUAE

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UAE Corporate Tax Guide Published for Filing Requirements The UAE Federal Tax Authority (FTA) has issued a comprehensive Corporate Tax Guide detailing the filing and compliance requirements under Federal Decree-Law No. 47 of 2022, which mandates corporate tax filings for companies operating in the UAE. Key Highlights: - Tax Return Composition: Taxpayers must complete various sections and schedules that capture data specific to their operations, including income, deductions, exemptions, and any relevant business activities. - Special Provisions and Exemptions: Certain entities like government bodies, government-controlled entities, and Free Zone businesses may qualify for specific tax exemptions, with particular schedules and filing requirements for each type. - Elections and Reliefs: The guide offers provisions for Small Business Relief, Business Restructuring Relief, and Foreign Permanent Establishment exemptions, each impacting the calculation of taxable income. - Documentation and Deadlines: Companies are required to file returns online via the FTA’s EmaraTax portal within nine months of the tax period's end, including any supporting documents based on entity type and applicable elections. Transfer Pricing Rules and Disclosure Requirements The guide also includes significant updates on transfer pricing and disclosure requirements, aimed at ensuring fair taxation for entities engaged in transactions with related or connected parties: - Transfer Pricing Compliance: All transactions with related parties must adhere to arm’s length principles, meaning that pricing should align with market rates. Recognized methodologies—such as the Comparable Uncontrolled Price or Cost-Plus methods—should be used to establish arm’s length prices. If an alternative method is used, this must be clearly disclosed. - Detailed Disclosure Obligations: The guide mandates specific thresholds for disclosure: - Related Party Transactions: Must be disclosed if they exceed AED 40 million, with any single category of transactions over AED 4 million requiring separate disclosure. - Connected Person Transactions: Transactions with Connected Persons over AED 500,000 must be reported, detailing each Connected Person’s name, type of transaction, and financial information. - Documentation and Adjustments: Companies are responsible for maintaining documentation that supports their transfer pricing methods. If a transaction deviates from the arm’s length standard, adjustments may be required, especially when claiming downward adjustments in taxable income, which need FTA approval. These transfer pricing and disclosure rules enhance transparency and compliance with UAE corporate tax law, particularly for multinationals and entities with intercompany transactions. #UAECorporateTax #FTAGuidelines #CorporateTaxGuide #TaxCompliance #TaxFiling #TransferPricing #RelatedPartyTransactions

The Federal Tax Authority (FTA) has announced a new decision aimed at helping businesses more effectively meet their tax obligations, offering a grace period to tax registrants who have delayed in updating their tax records from 1 January 2024 through 31 March 2025. This initiative allows businesses that have not yet updated their records to make necessary adjustments and avoid administrative penalties associated with failing to notify the FTA of updates to their tax information. The Cabinet issued this Decision, granting a grace period for registrants to address any outstanding administrative penalties resulting from untimely updates to their tax records. If registrants had previously paid penalties for failing to update their records within the grace period, they may be eligible for a refund under the Penalty Refund Procedures specified in Cabinet Decision No. (105) of 2021, which outlines protocols for penalty instalment payments, waivers, and refunds. The FTA emphasized that the initiative encourages registrants to keep their tax information up to date. According to Cabinet Decision No. (74) of 2023 on the Executive Regulation of Federal Decree-Law No. (28) of 2022 on Tax Procedures, registered taxpayers must notify the FTA within 20 working days of any changes in their registered information. This includes updates to details like name, address, email, business activity, legal form, partnership agreements for joint ventures, and other essential business information. In its ongoing efforts to raise awareness, the FTA also issued a clarification on the grace period for updating tax records, which is available via the Public Clarifications service on the FTA’s official website. This service provides detailed information on tax-related matters, aiming to help taxpayers understand and comply with tax legislation. #UAE #FTAUAE #TaxCompliance #GracePeriod #BusinessSupport #TaxRelief #AdministrativePenalties #UAEEconomy #CabinetDecision #TaxUpdates #BusinessGrowth #TaxpayerSupport #PublicClarifications #TaxLaw

UAE Federal Tax Authority Issues Updated Guide on Tax Residency and Certificate Application Procedures In October 2024, the UAE’s Federal Tax Authority (FTA) published an updated guide on tax residency procedures, providing general guidance and examples of tax residency as per UAE domestic law and Double Taxation Agreements. The guide also explains how to apply for a Tax Residency Certificate (TRC) in the UAE for both individuals and entities. The guide outlines key criteria for obtaining a TRC, with notable updates including: Updated TRC Application Timelines TRCs can now be applied for during the relevant tax period, which was previously only allowed after the period concluded. The application timing varies as follows: - For Entities (Juridical Persons): After three months from the start of the relevant tax period. - For Individuals (Natural Persons): As soon as the criteria for tax residency are met, either under domestic law or through a Double Tax Agreement. - For Government Entities or Government-Controlled Entities: One day into the relevant year. TRCs cannot be issued for a future period since residency status cannot be confirmed in advance. Newly incorporated companies that haven’t yet filed a tax return must be established for 12 months before applying for a TRC. Documentation Requirements for TRC Applications For individuals applying for a TRC under a Double Taxation Agreement, physical presence in the UAE for more than 183 days within a 12-month period is required. Supporting documents include: - Proof of Residency: This may include an Emirates ID and residence visa, or a copy of a passport with an entry/exit record. - Income Documentation: Such as a salary certificate or other proof of income. - Bank statements are no longer needed. For TRC applications under UAE domestic law, additional documentation is required: - Physical Presence in UAE (90-182 Days): Proof of employment or business activity, or evidence of a permanent residence in the UAE. - Primary Residence and Financial/Personal Interests in UAE: Proof of the primary residence, financial interests, and source of income in the UAE. TRC Application Requirements for Juridical Persons (Entities): Corporate documentation required for entities includes a trade license, certificate of incorporation, Memorandum of Association, UAE corporate tax registration number, and proof of authorized signatories. Notably, audited financial statements are no longer required, as TRC applications can now be submitted during the tax period. #UAE #FederalTaxAuthority #TaxResidency #TaxResidencyCertificate #TRC #TaxGuidance #DoubleTaxationAgreement #UAECompanies #TaxPolicy #UAEResidents #TaxPeriod #Documentation

Issuance of Amendments to Federal Decree-Law on Tax Procedures and Federal Decree-Law on Value Added Tax to Support the elnvoicing System The new Federal Decree-Law have been adopted: * Federal Decree-Law No. 17 of 2024 on tax procedures introduces: - A definition for the "einvoicing system"* Authority for the Minister of Finance to issue the necessary decisions to implement the system - The effective dates of the system, as well as the requirements and entities subject to it. * Federal Decree-LawNo. 16 of 2024 on VAT introduces: - Expanded definitions of "tax invoice" and "tax credit note" - New definitions for electronic invoices and electronic credit notes the requirements and entities subject to it. #taxsystem #UAE #Dubaitaxes #Dubaiaccounting #taxuae #VAT #taxinvoice #VATUAE #UAEVAT

The Ministry of Finance Announces Changes to Economic Substance Regulations Following the Cabinet Decision No. (98) of 2024, which amends the earlier Decision No. (57) of 2020 concerning the requirements of Economic Substance Regulations, the #MoF announced the cancellation of the requirements for companies to submit Economic Substance Notifications and Reports for financial years ending after 31 December 2022. #taxsystem #UAE #Dubaitaxes #Dubaiaccounting #taxuae #ESR #UAEESR #ESRUAE

Tax News – Updates to UAE VAT Executive Regulation No 100 of 2024 On October 2, 2024, the Federal Tax Authority (FTA) released Cabinet Decision No. (100) of 2024, amending the Executive Regulation of the Federal Decree-Law No. (8) of 2017 on Value Added Tax (VAT). The Updated Executive Regulation will take effect on November 15, 2024, incorporating over 30 amendments across various sectors. Below are the key changes. 1. Definitions (Article 1)   - Virtual Assets: Newly defined as digital value that can be traded or transferred and used for investment, excluding digital representations of currencies or securities. 2. Supply of Goods (Article 2)   - Expanded to include all disposals leading to the transfer of ownership of real estate, beyond just sales and tenancy contracts. 3. Exceptions from Supply of Services (Article 3 bis)   - New exceptions include transfers of rights related to government buildings and real estate assets between governmental bodies, applicable from January 1, 2023. 4. Deemed Supplies (Article 5)   - Introduced a threshold of AED 250,000 for output tax exemption on deemed supplies for government bodies or charities. 5. Voluntary Registration (Article 8)   - Applicants must prove intention to make taxable supplies or those treated as taxable if made in the UAE. 6. Tax Deregistration (Article 14 bis)   - FTA may issue deregistration for entities if their ongoing registration threatens tax system integrity. 7. VAT Group Membership (Article 15)   - Clarified that a member must be removed from a VAT group if they cease to make taxable supplies. 8. Profit Margin Scheme (Article 29)   - Purchase price for profit margin calculations now includes all costs related to purchasing goods. 9. Zero Rating for Exports (Article 30)   - Clarified documentation requirements for direct/indirect exports and customs suspension situations. 10. Zero Rating for Services (Article 31)    - New condition added: services must not be subject to special place of supply rules to qualify for zero-rating. 11. International Transportation Services (Article 33)    - Clarification that transportation of goods within the UAE as part of international transport must be provided by the same supplier to qualify for zero-rating. 12. Zero Rating of Transport Means (Article 34)    - Applies to both supplies and imports of means of transport. 13. Financial Services (Article 42)    - New exempt services include investment fund management, virtual asset transfers, and exchanges, with retroactive effect from January 1, 2018. 14. Composite Supplies (Article 46)    - New VAT rule for assessing the treatment of composite supplies based on the nature of all components. 15. Input Tax Recovery (Article 52)    - Updated conditions for determining the status of individuals for input VAT recovery on financial services supplied outside the UAE. continuted in the comments...

The Federal Tax Authority (FTA) has issued Decision No. 7 of 2024, postponing the deadline for filing Corporate Tax Return and settling the Corporate Tax payable for certain Tax Periods. The new deadline for filing Tax Return and settling Corporate Tax is 31 December 2024 for: - Businesses established on or after 1 June 2023, and - Businesses whose first Tax Period ended on or before 29 February 2024. #dubai #dubaiaccounting #uaeaccountant #corporatetax #accountantdubai

Registration deadline for Corporate Tax with License issued in July is 30 September 2024 without incurring any Administrative Penalties As per Federal Tax Authority Decision No. 3 of 2024 on the Timeline specified for Registration of Taxable Persons for Corporate Tax purposes issued on 26 February 2024, the FTA urges Taxable Persons subject to Corporate Tax to register as soon as possible in order to avoid Administrative Penalties. Resident Juridical Persons that were incorporated or otherwise established or recognised before 1 March 2024 Registration application deadline without incurring any Administrative Penalties - 30 September 2024 If a Resident Juridical Person's Licence was issued in July (irrespective of the year of issuance of the Licence), the deadline to submit a Tax Registration application without incurring a late registration Administrative Penalty is 30 September 2024 Example 1: Where a Resident Juridical Person was incorporated, established or recognised on 1 July 2022, and their Licence was issued on 13 July 2022, they must submit a Tax Registration application to the FTA by 30 September 2024 in order not to incur a late registration Administrative Penalty. Example 2: Where a Resident Juridical Person was incorporated, established or recognised on 10 June 2020, and the Person had more than one Licence - one issued on 6 July 2020 and the other on 3 May 2023 - the earlier date is considered, i.e. 6 July 2020. The Person in question is required to submit a Tax Registration application to the FTA by 30 September 2024 in order not to incur a late registration Administrative Penalty. Please get in touch with you should you need assistance with the corporate tax registration. #dubai #dubaiaccounting #uaeaccountant #license #corporatetax #accountantdubai #tradelicense