Tax is a mandatory contribution that is paid by the citizens of any nation to the government so that the government can provide the essential public services to its people. These services include infrastructure, better management, roads, buildings etc. It is applicable to both nationals as well as ex-pats. When a business gets established in a foreign nation, payment of corporate tax by the businesses is necessary and mandatory. Similarly, individuals earning within the tax slab of any nation needs to pay individual income tax based on the rules of that specific country. At this point, opting for a tax consultant acts as a better option that makes us aware of the taxation policy of the specific nation and also helps in identifying the best possible route for making savings.
A tax consultant is a person or an organization who helps business entities and individuals to understand and deal with the taxation structure, and reveal the legal ways of paying less tax. This can either be an individual or a group of individuals depending upon the size and nature of the business.
Dubai has established itself as one of the fastest developing cities in the world and the heart of the UAE and as a result, it has been a centre of attraction for businesses on a global scale. Be it a start-up, or an established business, one of the first cities that clicks in the mind of a businessman in Dubai and the reason for this is that the emirate offers various tax-free zones that attract investors from every corner of the world. Let’s have a deeper look at taxation in the United Arab Emirates.
Taxation in Dubai
Dubai is known for being a tax exempted business zone. In reality, different types of taxes get applied in companies, which include:
- Direct Taxes
- Companies operating in oil and gas industry in Dubai and the rest of the UAE: 55%
- Branches of foreign banks operating in Dubai and the rest of the UAE: 20%
- Indirect Taxes
- Municipal tax on hotels and entertainment facilities: 10%
- Municipal tax on the rental of commercial space: 10%
- Municipal tax on the rental of residential property in Dubai and the rest of the UAE: 5%
- Value Added Tax (VAT): 5% (in most cases)
Double Taxation Treaties
Since the business at a global level takes between different nations, entering into a double tax treaty becomes an advantage for the businesses. A double tax treaty is an agreement that is signed by two countries to avoid double taxation on both sides and encourages the development of business relations between two or more nations. The Emirates have got more than 70 tax treaties with different countries that becomes an added value to contribute to the centre as a business hub.
Tax Consultants in UAE
Dealing with tax and filing tax returns is a complex process. The increasing number of businesses in the UAE has resulted in the rise in the number of tax consultants which are required by the businesses in each of the Emirates. Tax advisors in Dubai have increased to a great number as compared to the earlier years. These tax consultants advise the management of the businesses about the various tax rules and prepare a plan for them.
Benefits of Opting for a Tax Consultant
Opting for a tax consultant for any firm is a decision of relief as they take the responsibility of dealing with the tax structure of your business. If you have just started your business or is planning to expand it in the international market, it turns out to be an advantageous option. Tax advisors plan and provide essential information and look into every aspect of the business while dealing with tax returns. Some of the benefits that an organization enjoys by opting for a tax consultant include:
- Tax advisors help to identify legal ways to pay less tax
- Saves time in preparing the tax returns
- Sorts the complicated computations
- Strategies are built to minimize the tax to be paid
- Up-to-date information is received regarding any changes in the taxation policy
JAXA Taxation Services
At JAXA, we dive into the business activities of our clients to understand the business structure, its dealings, and the quality of sustainability. A proper understanding of the business environment helps us to deliver the services and fulfil clients’ needs at a faster pace. Some of the services provided by us include:
- Evaluation of tax returns
- Filing of VAT returns
- Tax investigation
- Tax structuring and transfer pricing
- Corporate tax compliance
- Review and analysis of cross-border transactions and payments
JAXA is one of the top tax consultants in Dubai. We understand the company requirements and tailor solutions according to business needs. Our team of experts consists of individuals having high industry experience on the taxation front. We keep in mind the international tax standards while dealing with the taxation process and deliver the optimum service to our clients. To file your tax returns, do contact us – we’d be glad to assist you and help you in framing your business tax structure.