Tax and Compliance in UAE

Tax and Compliance

The UAE’s shift towards a tax economy in accordance with rising competitiveness is both commendable and essential since it stimulates economic diversity and increases transparency. There have been several developments in the tax economy that seeks attention in terms of improving international tax compliance. Following the laws and regulations established by an authority have become crucial, and if a company wants to avoid future headaches, they should choose a reputable organization to provide regulatory tax and compliance services.

• Value Added Tax (VAT)

  The implementation of VAT in the UAE on the majority of goods and services offered a new stream of revenue that may be used to continue providing high-quality public services. It will also help the government achieve its aim of decreasing dependency on oil and other hydrocarbons as a revenue source. VAT will undoubtedly affect your firm regardless of where it operates in the UAE. As a result, VAT auditing and consulting services have become essential for businesses to function.

• Tax Agent

  In most cases, a tax agent is appointed on behalf of another individual to represent him before the Federal Tax Authority (FTA). A tax agent manages a client’s tax responsibilities and conducts a variety of legal tasks as required by law. Tax agents also serve as a liaison between the Federal Tax Authority and taxable individuals. HLB HAMT is a registered tax agent in UAE.

• Excise Tax

  Introduced in 2017 across UAE, it is a form of indirect tax levied on certain goods that are generally dangerous to human health or the environment. The purpose of the excise tax is to limit the use of unhealthy and hazardous items such as carbonated beverages, tobacco products, and energy drinks while also raising revenue for the government to spend on public services.

• Economic Substance Regulations (ESR)

  The UAE government implemented Economic Substance Regulations in 2019 as a reaction to being blacklisted by the European Union (EU) for tax reasons. The objective of regulation is to ensure that UAE firms declare genuine earnings that are proportional to the amount of economic activity they engage in or undertake within the UAE.

• Country by Country Reporting (CbCR)

  As per Country by Country Reporting (CbCR) regulations implemented in the UAE with effect from the year 2019, large Multinational Enterprises (MNE) within the UAE have to file a report with the competent authorities at the end of every financial year providing details of the amount of revenue, profit or loss before tax, income tax accrued, income tax paid, tax residence of the constituent company etc.