FAQ
Who needs to register for VAT in the UAE?
Mandatory registration is required if taxable supplies exceed AED 375,000 in the past 12 months or are expected to exceed this in the next 30 days. Voluntary registration is available for businesses with supplies between AED 187,500 and AED 375,000. Businesses with only exempt supplies cannot register for VAT.
What is the Corporate Tax rate in the UAE and who needs to pay it?
UAE Corporate Tax is 0% on taxable income up to AED 375,000 and 9% above that threshold, effective from June 1, 2023. All UAE mainland companies, Free Zone entities, and branches of foreign companies must register and file annual returns, though some may qualify for 0% rate.
What are the deadlines for filing VAT and Corporate Tax returns in the UAE?
VAT returns must be filed quarterly within 28 days after the period ends, with payment due simultaneously. Corporate Tax returns are due within 9 months after financial year-end. Late filing incurs penalties starting from AED 500-1,000.
Can I recover VAT paid on business expenses (Input VAT)?
Yes, if you make taxable supplies (standard or zero-rated), you can recover 100% of input VAT with proper documentation. Businesses making exempt supplies cannot recover input VAT, while those with mixed supplies can only recover proportionately. Special restrictions apply to entertainment expenses and motor vehicles.
Are Free Zone companies exempt from UAE Corporate Tax?
Not automatically – only Qualifying Free Zone Persons (QFZP) with adequate substance and qualifying income benefit from 0% rate. Non-qualifying income is taxed at 9%, and all Free Zone entities must register and file annual returns regardless of rate.
When should I consider tax due diligence services?
Tax due diligence is essential before acquisitions, business restructuring, or exits to uncover liabilities, compliance issues, and optimization opportunities. It helps identify risks, remedy issues proactively, and increase business valuation by demonstrating clean tax history.
Can I switch tax consultants? How does the transition work?
Yes, switching is straightforward – grant new consultant FTA portal access, transfer historical documents, and conduct a compliance review. White Circle ensures seamless takeover with no downtime, ideally transitioning between filing periods with no additional onboarding charges.
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