The Federal Tax Authority (FTA) is in charge of enforcing tax laws in the United Arab Emirates (UAE). To oversee the imposition of all federal taxes in the UAE, the FTA was set up in 2016.
Individuals are not subject to income tax in the UAE. However, it imposes corporate taxes on foreign banks and energy firms. Specific products that are particularly damaging to the environment or human health are subject to excise taxes.
The value added tax (VAT) system was implemented in the UAE in 2018. Most goods and services sold in the UAE are subject to VAT, which is a type of consumption tax.
The primary taxes imposed in the UAE are as follows:
● Corporation tax: The UAE imposes a 9% corporation tax rate. Profits from businesses with UAE registrations are subject to this tax.
● Excise tax: Depending on the type of items, the UAE’s excise tax rate varies. Tobacco items, for instance, are subject to an excise tax of 50%, while sugary beverages are
subject to an excise tax of 50 fills/litter.
● VAT: Value-added tax in the UAE, the VAT rate is 5%. The majority of goods and services sold in the UAE are subject to this tax. In the UAE, there are several tax exemptions.
For instance, the following are free from corporate tax:
● The earnings of small enterprises with annual sales of less than AED 375,000.
● The revenue earned by government organizations.
● The proceeds from charities.
It’s crucial to comprehend the applicable tax regulations if you’re thinking about making an investment or conducting company in the UAE.
To make sure you adhere to the law, you should get advice from a taxation or financial lawyer or expert.
