Dubai fz tax

[uranium]

I have a marketing fzco in dubai
Registered with IFZA
I read many posts about tax in dubai but until now I do not understand
I don't even understand what they mean by qualified business activity
Do I have to pay taxes or not
Plz advise me

 

[Bharat Bajaj]

As long as you are in Freezone and doing business overseas (abroad) i.e. not doing business inside UAE. You won't be liable to pay any Corporate Tax in UAE. As we speak Federal Tax Authority (FTA) has put a paper in public consultation for not taxing such income which is most likely to be implemented shortly to not tax such income which is not earned from inside UAE to maintain UAE tax Free status among Free Zones which is the biggest business puller for UAE. If your turnover is less than 3 Million AED you can opt for Small Business Relief and no need to pay any tax untill end of 2026. Corporate Tax is still new in UAE and a lot of practices' are getting evolved but one thing is pretty sure that Free Zone businesses will find a way to stay out of the Corporate Tax as long as they are doing business outside UAE. Please let me know know if you have any specific question.

 

[Mr Gus]

Yes they recently introduced a regressive tax system to embark Sheik Mohammed bin Rashid Al Maktoum vision to only atract the best of the best.

Starting from 2023 you will be paying the following rates

9% 0 - 10m AED
4.5% 10m - 50m AED
0% above 50m AED

 

[Bharat Bajaj]

Yes they recently introduced a regressive tax system to embark Sheik Mohammed bin Rashid Al Maktoum vision to only atract the best of the best.

Starting from 2023 you will be paying the following rates

9% 0 - 10m AED
4.5% 10m - 50m AED
0% above 50m AED

Hi Mr. Gus there is no progressive rate in UAE its only 1 rate of 9% on Net Taxable profit more than 375,000 AED.

 

[uranium]

As long as you are in Freezone and doing business overseas (abroad) i.e. not doing business inside UAE. You won't be liable to pay any Corporate Tax in UAE. As we speak Federal Tax Authority (FTA) has put a paper in public consultation for not taxing such income which is most likely to be implemented shortly to not tax such income which is not earned from inside UAE to maintain UAE tax Free status among Free Zones which is the biggest business puller for UAE. If your turnover is less than 3 Million AED you can opt for Small Business Relief and no need to pay any tax untill end of 2026. Corporate Tax is still new in UAE and a lot of practices' are getting evolved but one thing is pretty sure that Free Zone businesses will find a way to stay out of the Corporate Tax as long as they are doing business outside UAE. Please let me know know if you have any specific question.

I have fzco
My business makes more than 375.000 aed a year.
I do not do business with mainland and I do business only outside of UAE
Do I need to pay taxes or not ?

 

[Clank]

I have fzco
My business makes more than 375.000 aed a year.
I do not do business with mainland and I do business only outside of UAE
Do I need to pay taxes or not ?

Most likely yes.

 

[uranium]

Most likely yes.

But they said that qualified activities do not pay tax
I have marketing business
Do I pay taxes ?

 

[Clank]

But they said that qualified activities do not pay tax
I have marketing business
Do I pay taxes ?

Yes

 

[Bharat Bajaj]

But they said that qualified activities do not pay tax
I have marketing business
Do I pay taxes ?

Though marketing is not a qualified activity but it depends on who your clients are if all your clients are based out of UAE? How much is your turnover going to be?

I have fzco
My business makes more than 375.000 aed a year.
I do not do business with mainland and I do business only outside of UAE
Do I need to pay taxes or not ?

No You won't pay any taxes most likely we are closely watching FTA's announcement. Is your Turnover more than AED 3 Million? or expect to go up beyond this figure?

 

[uranium]

Though marketing is not a qualified activity but it depends on who your clients are if all your clients are based out of UAE? How much is your turnover going to be?


No You won't pay any taxes most likely we are closely watching FTA's announcement. Is your Turnover more than AED 3 Million? or expect to go up beyond this figure?

All my clients are based out of UAE.
Turnover is more than 3 million AED

 

[Bharat Bajaj]

All my clients are based out of UAE.
Turnover is more than 3 million AED

Please wait for few days there will be a clarification from FTA brining clarity on this. If all your income from outside UAE most likely it won't be taxable in UAE. Will keep you posted on this.

 

[uranium]

Please wait for few days there will be a clarification from FTA brining clarity on this. If all your income from outside UAE most likely it won't be taxable in UAE. Will keep you posted on this.

Plz update this thread when you get update. Thx

 

[Au999]

Please wait for few days there will be a clarification from FTA brining clarity on this. If all your income from outside UAE most likely it won't be taxable in UAE. Will keep you posted on this.

I've heard this is coming too from several sources now.

Looks like Fred will have been right all along

 

[uranium]

I've heard this is coming too from several sources now.

Looks like Fred will have been right all along

50% of people say I have to pay tax
50% say I don't have to pay tax
I don't know who to believe
Others say I have to wait for news
I don't want to run my business now and then all of sudden they say I have to pay 9% taxes

 

[Au999]

50% of people say I have to pay tax
50% say I don't have to pay tax
I don't know who to believe
Others say I have to wait for news
I don't want to run my business now and then all of sudden they say I have to pay 9% taxes

You've already got the marketing company at ifza (I have one too) so that's done.

Keep trading, and have a potential of only 9% tax on profits minus expenses and salary - could be practically zero if you're smart - or they'll announce you're exempt/qualified anyway and you pay zero.

Either way it's low tax and zero on salary, cap gains etc.

 

[uranium]

You've already got the marketing company at ifza (I have one too) so that's done.

Keep trading, and have a potential of only 9% tax on profits minus expenses and salary - could be practically zero if you're smart - or they'll announce you're exempt/qualified anyway and you pay zero.

Either way it's low tax and zero on salary, cap gains etc.

If I keep running my business now and after 1 month they announce that my business is not qualified, do I pay tax for previous profits or only for future profits?

 

[Sols]

If I keep running my business now and after 1 month they announce that my business is not qualified, do I pay tax for previous profits or only for future profits?

No one knows. UAE is a total mess right now.

 

[uranium]

No one knows. UAE is a total mess right now.

That is why I ask. I don't want that later they come and ask me to pay 9%.
I want to be on safe side from now.
Wish if Fred could join this thread to clarify..

 

[Sols]

That is why I ask. I don't want that later they come and ask me to pay 9%.

Easy solution: keep 9% of your company's profits as cash reserve until UAE gets its act together and finalizes the tax law.

Normally when countries change tax rates, the new does not apply retroactively. It applies only on income from when the new tax law takes effect. But UAE is a monarchic dictatorship that's showing phenomenal incompetence, so we can't be sure standard practices apply.

 

[Asmodeus]

That is why I ask. I don't want that later they come and ask me to pay 9%.
I want to be on safe side from now.
Wish if Fred could join this thread to clarify..

Chill.
Your company's fiscal year is important actually. And it's probably from 1. January to 31. December.
Until then you are still tax free for this year and after some more clarification you can start to decide if you want to liquidate your company or not.