December 11, 2023

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UAE Company Tax: Taxable individuals with Dh50m in annual revenues ought to preserve audited statements

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“Qualifying Free Zone Individuals (QFZP) are required to keep up audited monetary statements regardless of their gross income or internet income,” mentioned Deepak Bansal from AskPankaj Tax Advisors. “Being entitled for 0% tax charge on their qualifying earnings, it’s crucial free zones will not be used as a route for tax evasion.

“A statutory audit of the monetary statements will be sure that the enterprise transactions are accurately reported and ample information are maintained.”

The Ministry has additionally clarified the state of affairs the place a non-resident particular person may find yourself staying within the nation because of unexpected circumstances. The Ministerial Resolution No. 83 of 2023 pertains to conditions the place the presence of ‘pure individuals’ within the UAE may or couldn’t give rise to a everlasting institution for the non-resident. It accounts for a presence because of ‘unexpected non permanent and distinctive circumstances, and the place they don’t have any intention of staying within the UAE as soon as these circumstances stop’.

“The choice additional specifies what constitutes a short lived and distinctive presence within the UAE,” The Ministry mentioned within the assertion. “It goals to supply readability and forestall tax avoidance and double non-taxation, in alignment with world finest practices.”

The Undersecretary of the Ministry of Finance, Younis Haji Al Khouri, mentioned “The choices carry transparency, simplicity, and readability to the UAE’s Company Tax regime which facilitates compliance and minimizes dangers of tax avoidance and double non-taxation, making certain a good and well-regulated tax setting for all.”

It’s seemingly that the QFZPs could lose the good thing about 0% tax charge in entirety if in addition they earn ‘disqualifying earnings’. Sustaining audited statements will assist tax authorities of their future verifications to make sure taxability. It turns into vital at no cost zone corporations now to guage the tax advantages of being QFZPs, or of relocating their operations right into a free zone

– Deepak Bansal of AskPankaj Tax Advisors

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