“The hardest thing to understand in the world is the income tax”- Albert Einstein.
Taxation stands as one of the most crucial domains that every business needs to deal with and thus turns out to be unavoidable. The payment of tax positions as a mandate and therefore, one needs to deal with it carefully. Unlike the other countries, the United Arab Emirates stands as a suitable business platform as the government has exempted the personal tax payment, which usually stands as a compulsion based on an individual’s earnings. This feature stands as a driving factor that grabs the attention of foreign investors to come forward and start a company in the UAE. This guide will help you to understand the complete tax scenario in the region.
Tax Scenario in the UAE
As mentioned above, income tax is wholly exempted in the region of UAE. However, by the start of Jan 2018, the concept of VAT has been implemented, which stands as another source of generating revenue for the nation. Now, the VAT rate has been fixed at 5%, which will have an impact on every entity involved in the ultimate corporate chain. The business entities need to take utmost care regarding the charges to be paid and should refer to a tax and VAT expert who can help them with VAT Return Filing and can guide them effectively.
Another vital domain that the UAE holds in its region is the involvement of the Double Taxation Agreement or Tax Residency (Domicile) Certificate. Currently, the corporate world is performing business operations beyond the geographical boundary. Now, when a business entity shows such operations tax gets imposed on both the ends, from the supplier as well as the buyer side. By holding a double taxation certificate, these taxes get an exemption and builds up more opportunities for any business to perform global operations. At present, the UAE holds more than 100 DTAs. This helps the business owners to come ahead and initiate their business operations in the region.
Why Is Tax Consultation Important for Business Entity?
By now, you have got a clear idea regarding the core base of what tax scenario is all about in the arena of UAE. If you are dealing with any business, it turns out to be profitable if you can have a consultation with a tax expert. Ignoring this might lead you to many unwanted issues in the future. The corporate tax will be based on the income generated by the business entity, and to get clarity on that, you need to make sure that your accounting and bookkeeping records turn out to be error-free. Some of the reasons why tax consultation turns out to be important are stated below:
- Understand the process of Tax Return Filing and implement it
- Becomes easier during the Audit Process
- Validates business operations as legal activities
- Helps you to understand the global business scenario and tax brackets involved
- Essential to know if you are planning to expand in the future
- Prevents financial losses
Since you are aware of the core reasons, you need to understand that dealing with an experienced professional will help you to carry out the task in a much easier way. Professional experts can guide you accordingly at every step and provide you the market insights that turn out to be valuable for your company. Wondering whom to approach? Well, don’t worry. Your guide is just below.
JAXA Chartered Accountants| Your Tax Guide
JAXA Chartered Accountants turns out to be one of the best tax consultants in the UAE. Being recognized as JAFZA and DAFZA Approved Auditors, the entity has helped numerous clients in solving out their tax concerns. Our business experts are well-versed with the taxation policies prevailing in the UAE and can cater to your business needs accordingly. In case you hold any doubt, feel free to have a word with our experts. Contact us today-we’d be glad to assist.