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Tax Planning
The Importance of Tax Planning for Companies
Tax planning plays a key role in the successful operation of any company. It allows for the optimization of tax obligations, minimizes risks, and ensures the financial stability of the business. Effective tax planning helps companies not only comply with legal requirements but also take advantage of available tax benefits and incentives to enhance their competitiveness.
Advantages of Tax Planning:
- Optimization of Tax Obligations: proper tax planning allows for the reduction of tax payments by utilizing legal tax benefits, deductions, and credits. This helps increase profits and free up additional resources for business development.
- Reduction of Tax Risks: planning tax obligations helps avoid errors in tax returns and minimizes the risk of tax audits and penalties. This ensures the financial security and stability of the company.
- Strategic Financial Management: tax planning enables companies to better manage their finances, budget, and investments, as well as forecast financial results. This contributes to more effective resource allocation and the achievement of long-term goals.
- Compliance with Legislation: in the context of constantly changing tax laws, it is important to stay informed of all changes and adapt to them in a timely manner. Tax planning helps the company comply with all requirements and avoid legal issues.
Our company offers professional tax planning services tailored to the needs of your business. We conduct detailed case analyses, examine financial data, and develop individualized tax optimization strategies.
Our services include:
- Comprehensive analysis of your company’s current tax situation;
- Development of a tax planning strategy tailored to the specifics of your business;
- Preparation and submission of tax returns in accordance with current legislation;
- Consultations on tax accounting and reporting issues;
- Support and assistance during tax audits.
Our specialists possess deep knowledge and experience in tax planning and are ready to help your company achieve financial success. Contact us today to learn more about our services and begin the journey to optimizing your tax obligations.
Get in touch with us for a consultation and start effective tax planning with our experts.
The United Arab Emirates (UAE) has a value added tax (VAT) rate of 5%. This rate is significantly lower than in most countries, where VAT rates can reach up to 25%. Therefore, the UAE falls within the lower range of global VAT rates.
For comparison, typical VAT rates around the world are as follows:
- European Union: VAT rates range from 17% to 27%, depending on the country;
- Canada: the standard GST (Goods and Services Tax) rate is 5%, but combined with provincial sales taxes (PST), the total rate can reach up to 15%;
- Australia: the GST rate is 10%;
- China: VAT rates range from 6% to 13%, depending on the type of goods and services.
The VAT rate in the UAE is one of the lowest in the world, making it attractive for business operations and stimulating economic activity in the country.
If your company operates within the UAE and your revenue exceeds 375,000 AED, be sure to register as a VAT payer and submit tax returns on time to avoid penalties.
*Not all companies in the UAE are required to register for VAT purposes. Contact our specialists to find out if your company needs to register.
RAI Star Consulting specialists have thoroughly studied Law No. 8 of 2017 and nearly 40 subsidiary laws to help your business in the UAE!
Starting from June 1, 2023, Law No. 47 of 2022 on “Corporate Tax,” also known as profit tax, came into effect in the UAE, imposing a 9% tax on net profits exceeding 375,000 AED.
According to Ministerial Decision, which came into effect on March 1, 2024, all companies in the UAE must register for corporate tax purposes to avoid a penalty of 10,000 AED.
Companies registered in free zones may qualify for a 0% corporate tax rate if deemed eligible. There are also legal opportunities for mainland companies to apply a 0% rate. Our specialists will consult you on tax optimization and planning to make the most of the available benefits for your company.
Excise tax in the United Arab Emirates (UAE) was introduced in October 2017. It aims to reduce the consumption of harmful products and increase government revenues to fund public services.
Goods Subject to Excise Tax:
- Sugary beverages: taxed at 50%;
- Energy drinks: taxed at 100%;
- Tobacco products: taxed at 100%;
- Electronic cigarettes and their liquids: taxed at 100%.
How It Works:
- Importers, manufacturers, and suppliers are required to register for excise tax;
- The tax is levied at the production or import stage, meaning it is paid before the goods reach the retail market;
- Reporting and payment: Companies liable for excise tax must submit monthly reports and make corresponding payments to the UAE tax authorities.
Which Taxes Are Not Present in the UAE?
- Income Tax: the UAE does not have personal income tax. This means that citizens and residents are not taxed on their salaries, investment income, or other forms of income.
- Capital Gains Tax: there is no tax on the profit from the sale of assets, such as real estate or stocks, in the UAE.
- Dividend Tax: dividends paid to shareholders are not subject to tax.
- Inheritance Tax: the UAE does not impose an inheritance tax or tax on the transfer of property through inheritance.