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UAE clarification of Freezone Qualifying Income

#642
Cloudbanck said:
If it's treated as pass-through by the UAE doesn't that mean it's like a natural person doing business. Then UAE corp tax applies but only if turnover is above 1M AED.

Just to add to how unclear things are! I think I'll stay below 91 days in the UAE until we know what happens in practice with the UAE corp tax.
Click to expand...
You may very well be right about that. If UAE mirrors US law, income from an LLC would be personal income (i.e. no tax). But if they view the LLC as a corporation or if UAE views personal income as "doing business", it's possible corporate tax would apply.

If it's the former and LLC profits count as personal income, it'd probably just be a matter of time before they close that loophole.
 
#643
I think turning back to the UAE is a bad decision for most people with existing setup.

dls-dubai.com

99% of Freezone Companies formed by DLS Dubai remain 0% Corporate Tax – Why?

From June 1, 2023, the UAE authorities have introduced a corporate income tax, for taxable individuals and companies with a tax rate of 9%. What does this mean for you?
dls-dubai.com dls-dubai.com

Nothing has changed since then and I strongly recommend to follow 1.-3. from this blog article as I gonna do the same for me as a Private Individual and the Paid Consulting Service I gonna offer for a strong core of former DLS Dubai Clients.

Another issue is unfortunately the fact that a lot and I really mean a lot of Dubai Corporate Service Providers are not honest and even some Authorities are talking bulls**t. This lead for me to the conclusion that it's impossible to provide upcoming clients in the next 3 Years the same Client Experience like for the Clients the past 3 Years.

I understand a lot of clients have questions but preparing such a transit as well takes time and energy. For everyone who is now disappointed or maybe even pissed, for whatever reason, a full for DLS Dubai dedciated Consulting and Accounting Department is setup and shared with you as part of that E-Mail.

Yes it's true DLS Dubai was basically from Consulting Point of View a Freeride as I gave so much input here and in personal Conversation because it just did add up. Please have understanding that I can't give up my health for Business even when I would really like to provide further such a service as it gave a lot of good feelings and happiness.
 
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#645
Checkmelater said:
Can we ask an exemption to FTA ? It means, if I think I can be exempted can I ask FTA if I’m exempted and obtain an exemption tax certificate ? Because if I think I’m exempted and I’m not I will get fine …….
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There was the possibility to fill in a direct Questionnaire to get Clarification from the FTA - this was at least how it was promoted not sure what the response did look like at the end of the day.

I recommend to assume 9% for your Business and to follow the Tipps from our Blog Article which remains Online to maximise the Tax Free Amount of Money you can take out of your Company.
 
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#649
Check 00:46. It shows exceeding 1 milion AED per year will pay 9% corporate tax. Less than that is 0% corporate tax. This was 375k AED before.


Can anyone tell me if this is true and where we can find this information?

Couldn’t find it on the internet.
 
#650
Well, the text he shows is correct, but what he says is not quite correct.
The text says there is no corporate tax for a resident or non-resident natural person with a turnover above 1M AED. This is not a recent change, this has been known a while. See Cabinet Decision 49, Article 2: https://mof.gov.ae/wp-content/uploads/2023/05/Cabinet-Decision-No.-49-of-2023.pdf

But for a company, ie a "juridical person" there is still corporate tax on profits above 375K AED. This hasn't changed.
 
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#651
Cloudbanck said:
Well, the text he shows is correct, but what he says is not quite correct.
The text says there is no corporate tax for a resident or non-resident natural person with a turnover above 1M AED. This is not a recent change, this has been known a while. See Cabinet Decision 49, Article 2: https://mof.gov.ae/wp-content/uploads/2023/05/Cabinet-Decision-No.-49-of-2023.pdf

But for a company, ie a "juridical person" there is still corporate tax on profits above 375K AED. This hasn't changed.
Click to expand...
You mean what he said applies only to personal income?
 
#653
Cloudbanck said:
Applies to turnover, not profit, for business income earned as an individual. So not all personal income, like not a salary, and real estate income is also excluded I think.

But the interesting question is if income from a US LLC counts as income earned as a natural person.
Click to expand...
Could be, but they wrote specifically about that and you even have to file if you run an unincorporated business as a natural person.
Have these paragraphs been deleted recently?
 
#656
drumtraks said:
Can someone enlighten me about what happens if an FZCO does absolutely nothing? Will it not be compliant or will it be compliant but treated as a mainland company?
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What do you mean by „compliant“?

As I understand it, there are qualifying FZCO (qualifying for 0% CT) and non-qualifying FZCO, depending on the activities.
Non-qualifying FZCO fall under the normal tax regime.
If a FZCO does not have any activities I assume it is still necessary to make a tax report with zero income. You don‘t want to declare your company as qualifying, as you don‘t want to submit an audit report.
 
#657
I mean exactly what I have written on my original question. What happens if a company does not do anything different than what it has always done so far? This means just probably internal accounting or no accounting, no tax returns, no anything.
 
#658
Looks like you can opt for small business relief if your turnover (not profit) is under 3 million AED. Plus, very simplified accounting and no auditing by the looks of it. This includes Freezone businesses.

www.khaleejtimes.com

UAE corporate tax: Small businesses can opt for tax relief and submit simplified tax return

The UAE government has provided a privilege, called the Small Business Relief (SBR), to small businesses in the UAE to ease the implementation of corporate..
www.khaleejtimes.com


Looks like very good news for a lot of people :)
 
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#659
Nickster said:
Looks like you can opt for small business relief if your turnover (not profit) is under 3 million AED. Plus, very simplified accounting and no auditing by the looks of it. This includes Freezone businesses.

www.khaleejtimes.com

UAE corporate tax: Small businesses can opt for tax relief and submit simplified tax return

The UAE government has provided a privilege, called the Small Business Relief (SBR), to small businesses in the UAE to ease the implementation of corporate..
www.khaleejtimes.com


Looks like very good news for a lot of people :)
Click to expand...
Yes, until 31.12.2026.
Thanks for the link, didn‘t know there is a new guide for it.
 
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