Tax Advice for Your Company in Dubai

Updated on Tuesday 03rd May 2022

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As part of the seven emirates of the UAE, Dubai hasn't imposed any income tax legislation for resident companies, no matter if they are small or big businesses. However, regardless of the line of activity or the company size, businesses must keep their accounts updated and structured by professional accountants for permanent accurate reports on their profitability and steadiness, as well as for proper preparation when they need financing. Our tax agents in Dubai are at your disposal with in-depth information about the necessary financial services for your business in Dubai and with tax consulting in Dubai, linked to your operations.
 
 Quick Facts  
Who needs tax advice in Dubai

- business owners,

- high net worth individuals

Financial services offered

- tax compliance and advice,

- expert financial consultancy,

- financial planning,

- saving & investments advice,

- tax minimization

Wills & real estate planning advice (YES/NO)

Yes 
Trusts & tax planning support (YES/NO) Yes
VAT registration support (YES/NO) Yes
Monitoring the financial status of a firm

On request

Financial analyses for companies (YES/NO)

Yes

Financial plan and implementation

On request

Tax efficiency solutions offered (YES/NO) Yes 
Support for taxation declarations (YES/NO)

 Yes

Business valuation report

On request

Business consultancy

On request

Annual statements and reporting

With the help of our accountants

Wealth management advice (YES/NO)

Yes

Auditing services On request


Companies with residency in the UAE


It is good to know that registered companies in the UAE are considered residents if the following elements are proved:
 
  1.  All the shares are owned by residents of the UAE or,
  2.  The entire or the majority of the company’s income comes from a trade or a business other than an investment company in the UAE and,
  3.  The total or most of the value of the company’s property is attributable to the property utilized in that particular trade or business.
     

General taxation information for resident companies in Dubai


We provide tax consulting in Dubai for both small and large companies. Here is the main tax information  which concerns a resident company in Dubai:
 
  •     taxable income:

There are no taxes on the income of companies, with the exception of oil and gas exploration and production businesses and branches of foreign banks.

The branches of foreign banks are generally taxed at a 20% fixed rate. Income tax decrees have been given out, however, they are applied only to the income of oil and gas exploration and production companies, at flat rates of 50-55%. If you wish to find out more details on our tax advice for your company in Dubai, as well as the bookkeeping services we can provide for you in this safe haven, please get in touch with our tax agents in Dubai.  Feel free to solicit tax consulting in Dubai at any time.
 
  •   fiscal year:

The financial year is from January to December, with the exception of the first year of a company which will be calculated since the incorporation. 
 
  • dividends:

There is no taxation on dividends for companies in Dubai. Yet, it is recommended to consult a tax agent in Dubai for further advice.
 
  • capital gains:

There is no taxation on capital gains in Dubai. Nevertheless, accounting services are needed for the preparation of financial statements for distribution to banks, government bodies and shareholders. 
 
  • real property tax:

A transfer fee is applied on the transfer of real property, according to the local jurisdiction.
 
  •  social security:

The UAE doesn’t apply social security taxes for foreign workers. The employer’s contribution is 12.5% of the contribution calculation salary.
 
  •  V.A.T.:

Since January 2018, the VAT is imposed for the first time and it is set at a rate of 5%.
 
  •  other taxes:

Other taxes include municipal taxes applied to some hotels, leisure services, and real estate rentals. The yearly rental income of residential and commercial tenants is taxed at a 5% and 10% rates.
 

VAT in the UAE


Starting with January 2018, the countries part of the GCC (Gulf Cooperation Council) are subject to VAT. This tax is set at 5%, the lowest rate on an international plan, and is applicable for luxury goods, tobacco, luxury vehicles, and home appliances. The same VAT is already implemented for certain oil & gas products. As for the real estate sector, the VAT rate of 5% is issued for commercial buildings when sold or rented.  As for the VAT exemptions in the UAE, the following categories should be observed:
 
  •     export of goods; 
  •     the health care services;
  •     transportation (bus, metro);
  •     basic foods (dairy, meat, soft drinks);
  •     residential real estate buildings.

Besides the VAT introduction in the UAE, an excise tax was also imposed on several types of products. These are the non-essential goods like tobacco, jewelry, beverages, and luxury vehicles which already suffered changes. The excise tax varies between 50% and 100% from the product's price, depending on the type of item levied. We remind that the VAT implementation for the GCC countries was a solid recommendation on behalf of the International Monetary Fund (IMF) which considers that such tax will sustain these countries and their already fruitful economies. More than USD 3 billion are expected to be generated in 2018 from VAT in the UAE. If you want to register your company in Dubai, it is strongly suggested to bear in mind that VAT registration is mandatory. Our team of advisors can help entrepreneurs understand the new taxation regime in the UAE and can direct business people throughout the registration process of the value added tax. Also, you can ask our team for audits in Dubai.
 

Business entities in Dubai


A crucial issue when opening a company in Dubai is choosing the right business entity. The choice of such an entity can vary depending on the location, objectives, your particular line of business, as well as other factors. The form of the company should be chosen keeping in mind the markets where it will operate – local or international. 

The types of business entities in Dubai (United Arab Emirates) are:
 
  •     the limited liability company; 
  •     the private/joint stock company;
  •     the branch or representative office.

Foreign investors, in general, own a maximum of 49% of a Dubai registered company, although owning 100% of the entire business is possible in the free trade zones, the most popular one being the Dubai International Financial Centre (DIFC). Investors who open a company in Dubai, therefore, need accounting services and taxation consultancy. We can help foreign entrepreneurs with expertise in tax consulting in Dubai, and with personalized accounting services when you decide to open a business in the UAE.
 

Support from our audit companies in Dubai


Our services offered to companies established in Dubai, UAE also include those offered by qualified auditors with experience in this field. The financial status of a company with economic activities in Dubai may be supported by an appropriate audit, in accordance with applicable law, including IFRS or International Financial Reporting Standards. Here is what an audit for a company in Dubai entails:
 
  •  All the financial documents of a company, resulting in a year of activities, can be verified by an auditor specialized in this field.
  •  Objectivity and transparency are the basis for financially accurate reporting, with the help of an internal or external audit.
  •  Any problems or inconsistencies related to the company's financial documents can be discovered through an audit.
  •  A qualified auditor will propose a series of measures designed to change any financial problems in the company.

Small, medium, and large companies can be subject to an audit, internal or external. So, if you want to know more about these services needed by a company with activities in the UAE, do not hesitate to talk to our team of accountants in Dubai. We are at your disposal with advice and support for the smooth running of the company you own.
 

Accounting services in Dubai - How we can help you


Complete bookkeeping services can be offered by our team with experience in this field. All transactions that take place in the company come to the attention of a specialist. Cash books, income statements, issuing invoices, daybooks, and many other financial journals are checked and completed, where appropriate, by an experienced accountant. Companies with economic activities in Dubai must comply with local and international accounting rules, so it is recommended that you turn to our team of tax agents in Dubai and make sure that everything is fine from this point of view.

Payroll tax calculations, salary reports, direct deposits, paychecks, and payroll records are a few of the payroll services our firm can offer. The same accounting firm in Dubai can handle such aspects for a company in Dubai, mentioning that our specialists have experience in this important field. You can benefit from personalized offers if you get in touch with us and send your requests.

Verification of annual financial statements is important in a company before submission to the relevant authorities. According to the UAE legislation, companies with operations in this country must prepare annual financial statements for submission. These documents reveal the financial status of a firm, in detail, therefore, a specialist is required for this task. You can benefit from comprehensive services offered by our accountants in Dubai, if you request a call back and if you ask for a free case evaluation.
 

Investing in Dubai


Dubai is not only attractive from a real estate point of view, but also for many other possibilities in terms of business for international entrepreneurs. We present you a few of the reasons why Dubai should be on top of your list for future investments:
 
  1. The tax regime is appealing - Even though the VAT was recently implemented in UAE, the tax regime continues to be quite attractive. There is no corporate tax, no capital gains, and no property tax imposed in Dubai.
  2. A stable economy – the government allows 100% ownership in more than 122 economic activities in UAE. In terms of total FDIs for 2019, UAE registered more than USD 154 billion.
  3. Great return on investments – UAE attracts many international entrepreneurs who want to generate profits in this country. The investment returns are as expected, presenting confidence in front of financiers.
  4. A great infrastructure – The business climate in Dubai is also sustained by the proper and well-developed infrastructure. Therefore, one of the key strengths of the UAE is the infrastructure, an important aspect attentively measured by an entrepreneur from overseas.

You can also analyze the following facts and figures about the economy of UAE:
 
  • The greenfield investment sector registered around USD 13 billion in 2019.
  • The 2020 Doing Business Report ranked UAE 16th out of 190 worldwide economies in terms of simplified business conditions.
  • Around USD 154 billion was the total FDI stock for UAE in 2019.

We are accountants in Dubai committed to assisting you in an efficient manner with accounting services for your business in this safe haven, finding the most proficient methods so that you save as much as possible from your company’s income. Please contact us if you need more detailed and personalized tax advice for your company in Dubai.