Activities that receive preferential state treatmentin the UAE
Find out which business activities are VAT-exempt, what you need to know about the UAE VATsystem, and what benefits you will enjoy by starting your business in the region's largest financial hub.
Given that businesses operating in the local UAE market are highly profitable, the introduction of VAT has had a negligible impact on the business community. At the same time, many types of business in the Emirates are not affected at all and VAT is not applicable to a large number of foreign and local companies. Find out which areas of activity have received state support and an exemption from 5% VAT, and what unique opportunities are open to investors as well as the many advantages they can enjoy.
Business areas not affected by the introduction of VAT
Many investors mistakenly assume that taxation depends on where the company was incorporated and choose Free Trade Zones, believing that activities outside the FTZ will be taxed. This is a misconception, since the tax system applies both to the FTZ and to the rest of the country. Having said that, Mainland (local) companies are a more flexible and creditable tool for doing business without restrictions
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VAT reporting in the UAE
If you are confident in the prospects of your business in Emirates market, act quickly. Incorporate, obtain a license, open a bank account and office. Only having established a presence in the UAE market will you find your "anchor customer".
- Quarterly submission of reports to the FTA (Federal Tax Authority)
- Monthly submission - for a large number of bank account transactions
- Submission of tax reports and timely payment of VAT due
- Submission of tax invoices to clients upon the provision of the service
The basis for calculating value added tax in the United Arab Emirates is the difference between outgoing and incoming VAT. That is, the amount of value added tax can be calculated using the formula: "VAT on sales" (charged by the company to consumers) minus "VAT on purchases" (paid by the company when purchasing goods or services for subsequent use) is equal to "VAT payable to the FTA".
What benefits do taxpayers get in the UAE?
The UAE government is doing everything to protect international business from global pressure. The introduction of VAT is one such measure. By introducing VAT, the UAE eliminated the risk of becoming the object of another international wrangle against tax-free jurisdictions, thereby guaranteeing geopolitical stability for its markets.
Things to take into account when registering
To form a Tax Group, members must be residents of the Emirates and operate related businesses. Such a group can submit consolidated financial statements to the Federal Tax Authority and receive a single taxpayer number.
They are awarded to onshore(mainland) companies that operate in Dubai and are registered with the FTA. In addition to the advantages of jurisdiction, a TRN having protects against the payment of an “offshore fee” by counterparties and from “withholding tax".
Grounds for registration
Even if your business activity is amongst those that enjoy preferential rates or are exempt from VAT, you still need to register as a taxpayer, get a TRN number and a certificate confirming the exemption from tax obligations.
Despite the fact that there is no requirement for mandatory accounting in the UAE, all companies are legally required to submit financial reports and keep primary documentation for 5 years.
Understanding the business environment is the key to the success of your business in the UAE
When choosing a service company, you should look for a highly trustworthy organization that understands your business and knows how to use all the advantages of the jurisdiction to achieve your goals
SORP specialists will help you resolve all issues with organizing your business in the UAE
The UAE is an ideal base for your business
The CORP Group of Companies provides the widest possible range of consulting services in the United Arab Emirates. As experts in the analysis and selection of business strategies in the UAE, we will tell you how to implement your idea most effectively and quickly. We provide our clients with recommendations on choosing the best jurisdiction in which to incorporate and ensure you avoid the typical mistakes people make when setting up a business here.
SORP Group will become your reliable long-term business partner in the UAE
We are the UAE’s leading consulting group providing a full range of services for the incorporation, support and management of business in the UAE and abroad. We have an impeccable reputation, broad capabilities and deep asset base.
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Successfully setting up a company in the UAE
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