Under UAE law, taxpayers who meet certain conditions can choose to form a “Tax group”, allowing them to be treated as a single taxpayer for tax purposes. This arrangement is beneficial for companies that have a relationship or ownership or management relationship because it allows them to consolidate their tax liabilities and qualifications. By creating a tax team, a company can improve its tax compliance process and potentially reduce its overall tax burden. To qualify as a tax group, two or more taxpayers must meet specific requirements set out in UAE tax Dubai laws. response time will be longer than usual.  Taxpayers are therefore advised to consult a UAE tax advisor to determine their tax liability and comply with the rules and regulations of the Financial Services Authority.  

How Do Taxpayers Form Tax Groups? 

To create a tax group, the parent company and its subsidiaries must be the same legal entity, have the same fiscal year and prepare the same financial information.  

• Own at least 95% of the organization’s equity capital. 

How to Calculate the amount of  Taxable income? 

To determine the amount of taxable income from the tax group, the parent company must prepare consolidated financial statements that include the relevant tax tables for all entities that are members of the tax committee.  

• When calculating group tax revenue, transactions between the parent company and group members and change of members within the group are excluded. 

Does a non-participating partnership need to pay UAE Corporate Tax?  

However, the foreign partnership will be considered as a partnership without legal entity if the following conditions are valid: 

• The foreign partnership will not be taxed according to the laws of the foreign country. 

• When a foreign partnership receives or earns income, each partner in the foreign partnership must pay a separate tax on the foreign partnership’s distribution of income.  

Are Group Changes Tax Deductible?  

Two taxpayers may be considered members of the same qualified group in the following cases: 

• The taxpayer is a legal entity that resides permanently in the nation, whether it is a resident or non-resident. 
• A minimum of 75% (seventy-five percent) of the shares of other taxpayers are either directly or indirectly owned by a third party, or at least 75% (seventy-five percent) are owned by each taxpayer. 
• None of these people are exempt. 
• All taxpayers’ fiscal years end on the same day. 
• Both taxpayers prepare their financial statements using the same accounting standards.  

Are payments to connected persons exempted?  

Deductions should be paid only if the payments or benefits correspond to the market value of services, benefits or other things provided by the relevant person and used entirely and exclusively for the taxpayer’s business.  

Looking for Experts UAE Tax Consultants?  

Crucially, taxpayers risk severe fines if they fail to comply with Federal Tax Authority rules and regulations and seek the advice of a UAE tax expert to ascertain their tax liability. 

UAE Business Tax Consultants are the experts who have all the knowledge about new laws. They make sure that your business follows all the rules and regulations. Hiring one would be very beneficial for your business. You will not have to worry about anything, all the complexities are taken care of. ebs Chartered Accountants are one of the leading firms in Dubai providing the top UAE tax consultancy dubai. The team is comprised of experts in this field. They will help you step by step, from corporate tax registration to the calculation of the tax and filling of the tax. for further information regarding corporate tax, you can make use of the website uaetaxgpt.ae, all the information is available there on one click away.   

FAQS

What are the tax categories in UAE Business Tax Dubai?

The tax categories in UAE Business Tax Dubai include corporate tax, value-added tax (VAT), excise tax, and customs duty.

Do all businesses in Dubai need to pay taxes in all of these categories?

Not all businesses are subject to all tax categories in Dubai. The tax obligations of a business depend on various factors such as the type of business, its activities, and its annual revenue. 

 How is corporate tax calculated in Dubai?

Corporate tax in Dubai is currently not applicable for most businesses. However, certain industries such as oil and gas, banking, and tobacco may be subject to corporate tax at a rate determined by the government.

Are there any exemptions or incentives available for businesses in Dubai?

Yes, the UAE government offers various exemptions and incentives to attract and support businesses in Dubai. These include tax holidays, reduced tax rates, and exemptions for certain industries or activities. Businesses should consult with tax advisors to determine eligibility for such incentives.