Welcome to our Frequently Asked Questions (FAQ) page. We know that with any new financial or accountant service, there can be a lot of questions and confusion, but our goal is to provide you with clear, concise, and helpful answers to the most common questions we receive.
We have strived to anticipate and address every possible question, but if you still have concerns or queries after reading this page, please don’t hesitate to contact us. Our team is always here to help and support you.
This FAQ page will provide all the information you need to get started and make the most of your experience.
Corporate Tax
Frequently Asked Question
CORPORATE TAX
Corporate Tax is a tax on the net income or profit of corporations and businesses, also known as “Corporate Income Tax” or “Business Profits Tax.”
To establish a competitive regime aligned with international standards, enhancing UAE’s global business hub status and fulfilling strategic objectives.
No, most countries, including the GCC Member States, have comprehensive Corporate Tax regimes at higher rates than the UAE.
It will be effective for financial years starting on or after 01 June 2023.
Yes, being a federal tax, it applies across all Emirates.
The Authority is responsible for administering, collecting, and enforcing Corporate Tax.
It remains the competent authority for international tax agreements and information exchange.
All UAE businesses, except for natural resource extraction, will be subject to Corporate Tax.
Any activity requiring a business license or permit falls within the scope of corporate tax.
It’s based on accounting net profit as calculated using International Financial Reporting Standards as per UAE Corporate Tax law.
0% for income up to AED 375,000, 9% above that, and a special
rate for large multinationals.
A corporation with over EUR 750 million in global revenues is
considered ‘large.’
No, individual salary and employment income do not fall under
the scope of Corporate Tax.
Yes, it falls within the scope of corporate tax.
No, real estate investments by individuals are not taxed unless a commercial license is required for the activity.
No, dividends and capital gains from personal securities are not taxed.
Yes, if annual income exceeds AED 1,000,000.
No, income from bank deposits or saving schemes is not subject to Corporate Tax.
Taxable at 0% for AED 0 – 375,000 and 9% on the excess, total corporate tax payable is AED 2,250.
Businesses involved in natural resource extraction are exempt and
subject to Emirate-level taxation. Government Organizations, Investment Funds/ Public Benefit Entities as approved by Ministry, Family Foundations with certain conditions are also exempt. Further exemptions can
be announced later.
Taxable Persons will be required to apply the
International Financial Reporting Standards (“IFRS”). In case their Revenue does not exceed AED 50,000,000, they are allowed to use IFRS for SMEs.
A Person can use Cash Basis of Accounting if their Revenue does not exceed AED 3,000,000.
Dividends and capital gains from qualifying shareholdings are exempt.
It’s an ownership interest in a company meeting specific UAE CT law conditions.
Yes, provided they meet certain conditions.
Only if they conduct regular business in the UAE.
Generally, their income from dividends and other investment returns is not taxed.
Yes, but with current CT incentives, if they meet regulatory requirements and do not conduct business with mainland UAE.
Yes, they are required to register and file returns.
No, they remain under Emirate level taxation.
Yes, they are subject to UAE CT.
Yes, losses incurred can offset future taxable income.
Yes, under certain conditions.
Yes, subject to specific conditions.
Yes, they can elect to form a tax group, if they meet certain conditions, and file a single return.
It’s a tax collected at source, not applicable under UAE CT for now.
Yes, as a credit against UAE CT liability.
Rules ensuring transactions between related parties are at arm’s length terms.
Yes, in line with OECD guidelines.
Yes, CT registration is mandatory for all the businesses in UAE, with further details on registration and compliance to follow.
Annually, with no provisional filings required.
Within 9 months after the end of tax year.
Yes, further guidance will be issued.
No, advance payments are not required.
Penalties will apply, similar to other UAE taxes like VAT.
Businesses having Revenues of AED 3 million or below in a relevant Tax Period and previous Tax Periods is a small business.
Small businesses relief means that they can elect not to pay corporate tax for Tax Periods that end on or before 31 December 2026.
VAT
Frequently Asked Question
VAT - VALUE ADDED TAX
Businesses whose taxable supplies and imports exceed AED 375,000 in the preceding 12 months must register for VAT and will be issued a TRN by the FTA.
A business may voluntarily register for VAT if its supplies and imports are at least AED 187,500, half of the mandatory registration threshold.
VAT registration allows businesses to claim input VAT on purchases, aiding in cost savings. Non-registration could result in fines and loss of competitiveness due to increased selling prices..
Businesses must submit in-house financial statements, certified by management, as proof of turnover for VAT registration.
Yes, LLCs must disclose their UAE national sponsor’s (51%) shareholding details in all other companies sponsored, including trade license copies, during VAT registration.
The Reverse Charge Mechanism requires the recipient of goods or services to account for VAT instead of the supplier in cases like imports from outside the UAE and GCC countries.
Non-residents making taxable supplies in the UAE must register for VAT unless a UAE resident is responsible for VAT accounting on their behalf.
A ‘Taxable Person’ is anyone registered or obligated to register for VAT with a turnover exceeding AED 375,000.
What constitutes ‘Taxable Supplies’ in the UAE?
No, high seas sales (HSS) are not taxable as the place of supply is not the UAE.
No, cost or reimbursement billed to customers is not a taxable supply, but goods or services supplied for a price are subject to VAT.
Personal assets unrelated to business activities are not considered taxable supplies or subject to VAT.
Yes, annual maintenance service charges for any property are taxable supplies and are subject to VAT.
Yes, transport-related services for exportation are taxable supplies but are charged at a zero rate.
A Deemed Supply is treated as taxable under certain conditions, such as transferring business assets without consideration or for non-business use. Yes, tax is charged on deemed supplies.
Yes, samples and gifts to customers are deemed supplies and are subject to VAT as they are supplied without consideration.
Non-taxable supplies include selling or issuing vouchers at face value and transferring a business as a going concern.
Exempt supplies are those on which no VAT is charged, like the supply of bare land, local passenger transport, certain financial services, and some residential properties.
Zero-rate supplies are taxed at 0%, including items like primary education and healthcare services, exports outside GCC, and new residential properties sold within three years of completion.
No, special medical services such as cosmetic surgery are not zero-rated and are subject to VAT.
Zero-rated suppliers can reclaim input VAT, while suppliers of exempt goods or services cannot reclaim their input VAT.
A business is any ongoing, regular, independent activity, such as industrial, commercial, agricultural, professional, service, excavation, or use of tangible or intangible property. Isolated transactions are not considered business.
Consideration is anything received or expected for supplying goods or services in money or other forms. Loans are not considered as they aren’t for supplying goods or services.
Input VAT is the tax added to the price when purchasing VAT-liable goods or services for business use.
Output VAT is the tax charged on sales of goods or services by a business.
For goods, it’s the location where the supply occurs; for services, it’s where the supplier is established. Special rules apply for categories like cross-border supplies.
It determines VAT liability jurisdiction in Intra GCC transactions, identifying if a supply is made in the UAE or outside.
Persons are not separated on economic, financial, or regulatory levels, where one controls the others by law or shares/voting rights.
A tax group is formed by related business persons with establishments in the state, allowing joint tax registration.
A registered individual with the FTA who represents and assists another person, typically a taxable person, in tax matters.
Yes, if the debt is written off, the recipient is notified, and six months have passed since the supply date.
Penalties are due to failures like not registering for VAT, not submitting tax returns or payments on time, not keeping required records, or tax evasion.
If the business is a taxable person, the VAT is correctly charged, documentation is held, and the goods/services are used for taxable supplies.
Yes, transitional rules apply to scenarios like payments received before VAT introduction but goods delivered after or contracts made before VAT without VAT clauses.
Records must be retained for a minimum of 5 years as per FTA requirements.
VAT on used goods is based on the profit margin between purchase and selling price when bought from an unregistered person.
All businesses, including Freezone companies, must register for VAT if taxable supplies exceed AED 375,000 annually.
Yes, fines apply for losing original VAT documents, starting at AED 10,000 for the first occurrence.
Individuals with extra business activities exceeding the AED 375,000 threshold must register for VAT.
Tourists not residing in implementing states can claim VAT refunds if goods are taken within 90 days of purchase, subject to conditions.
Schools providing recognized curriculum services are zero-rated for tuition and books, but other services like uniforms are VAT applicable at Standard Rate.
Yes, water, electricity, and telephone charges are subject to VAT.
Residential parts are zero-rated or exempt; commercial parts are VAT-liable. VAT incurred needs apportionment for mixed supplies.
Yes, a VAT return already filed can be revised or edited for any changes by filing a voluntary disclosure.
The due date to file a VAT return is 28 days after the end of the VAT return period.
AML
Frequently Asked Question
ANTI MONEY LAUNDERING (AML)
Anti Money Laundering (AML) refers to laws and regulations that prevent illegally obtained money from entering the financial system.
AML Compliance refers to the measures and processes businesses implement to prevent, detect, and report money laundering activities in line with regulatory requirements.
Designated Non-Financial Businesses or Professions (DNFBPs) include sectors like brokers and real estate agents, dealers of precious metals and gemstones, independent accountants and auditors, Lawyers, and corporate service providers.
A VASP, or Virtual Asset Service Provider, offers services related to digital assets, including exchanges, transfers, and wallet services.
Compliance helps Banks, DNFBPs, and VASPs prevent illegal financial activities, maintain business integrity, and avoid severe regulatory penalties.
DNFBPs and VASPs can help counter money laundering by taking specific measures to perform due diligence procedures.
Key AML compliance measures include KYC (Know Your Customer), performing risk
assessment procedures, CDD (Customer Due Diligence), screening customer’s names, and reporting suspicious transactions to relevant authorities.
KYC involves verifying a customer’s identity and assessing their risk profile to prevent business relationships with individuals involved in money laundering.
CDD is a broader process encompassing KYC, involving ongoing monitoring of customer activities and updating customer information regularly.
EDD is a more detailed form of CDD applied to high-risk customers, involving a deeper investigation into customer backgrounds and transaction purposes.
Red Flags are warning signs of suspicious activities, like unusual transaction patterns, inconsistent information, or transactions involving high-risk countries.
Best practice suggests annual or more frequent training if there are significant changes in AML regulations or business operations.
It involves assessing the level of money laundering risk customers or transactions pose and applying appropriate controls based on this risk.
Penalties can include hefty fines, reputational damage, and, in severe cases, criminal charges against the company or individuals.
SAR involves reporting suspected money laundering or terrorist financing activities to relevant authorities.
MLRO means Money Laundering Compliance Officer (MLRO), who monitors all money laundering procedures and policies.
Typically, a designated AML compliance officer, senior management, and all employees play a role in ensuring AML compliance.
TMS continuously observes customer transactions to detect unusual or potentially
suspicious activities.
Internal audits assess the effectiveness of AML programs, ensuring they align with regulatory requirements and identifying areas for improvement.
Apply EDD, increase monitoring, and establish stricter transaction controls for high-risk customers.
CFT means Counter Financing of Terrorism (CFT), which aims to stop illegal cash flow to terrorist organizations.
PEPs, or Politically Exposed Persons, hold prominent public positions and are, therefore, at higher risk for involvement in corruption.
An AML Program is a set of policies, procedures, and practices a business implements to comply with AML regulations and prevent money laundering.
Compliance officers must conduct due diligence on clients, monitor transactions, and report suspicious activities to prevent money laundering.
Real estate transactions can involve large sums and complex structures, making it easier to disguise the origins of illicit funds.
Blockchain provides transparency in transactions but poses challenges due to its anonymity and cross-border nature.
Small businesses should establish basic AML policies, conduct regular staff training, and perform customer due diligence.
Outsourcing to experts ensures compliance with evolving regulations and reduces the burden on internal resources.
They must perform due diligence to uncover the actual owners of assets or businesses, especially when corporate structures obscure ownership.
Sanctions screening involves checking customers against lists of sanctioned individuals and entities to prevent illicit activities.
Challenges include dealing with decentralized, anonymous transactions and staying updated with rapidly evolving regulatory landscapes.
A Compliance Culture is an organizational ethos that prioritizes adherence to legal and ethical standards, which is crucial for effective AML practices.
VASPs must implement robust KYC processes and utilize advanced technologies to trace and verify transaction origins.
Senior management must endorse and support AML policies, ensuring adequate resources and a culture of compliance.
Through information sharing and joint efforts, global cooperation enhances the
effectiveness of AML measures across borders.
Expect increased use of technology like AI, tighter regulations, and a greater focus on global cooperation and compliance standards.
Company Formation
Frequently Asked Question
BUSINESS SET-UP
Dubai presents diverse investment opportunities across real estate, technology, tourism, and renewable energy sectors. Investors can capitalize on the city’s strategic location, business-friendly environment, and government initiatives to foster economic growth.
The registration and licensing process duration can vary based on the type of business activity and jurisdiction. Generally, with all necessary documents and fees in order, the process can be completed within two to three days.
Costs for business setup in Dubai may include initial approval requests, trade name reservations, trade license issuance, and license renewal fees. The exact expenses depend on business type, location, and required permits.
Essential documents for license issuance typically include the initial approval receipt, copy of the lease contract, attested memorandum of association, valid passport copies, and approvals from relevant government entities.
Dubai offers various business setup categories, including general partnership, limited liability company (LLC), joint venture, sole proprietorship, and civil company. Each category has specific requirements and capital investment thresholds.
Mainland companies enjoy unrestricted business activities with other mainland entities, access to vast business opportunities, the ability to work with governmental bodies, and financial viability.
It’s recommended that a comprehensive business plan outlining essential requirements and considerations be created. Determine business structure, target market, location preference, and regulatory compliance needs.
The ideal company entity depends on business activity and ownership preferences. Options include LLC, foreign/local branch, sole establishment, or civil partnership, each offering unique advantages.
Mainland companies operate within the jurisdiction regulated by the Department of Economic Development (DED) and can conduct business locally and internationally. Free Zone companies are only used within designated zones or for international trade.
Freezone companies can benefit from having 0% corporate tax, subject to certain conditions
The timeline for setting up a company in Dubai varies depending on the business structure and regulatory procedures involved. With the expertise of a PRO, the process can be expedited significantly. Our PRO services include planning, efficient documentation, and proactive coordination with authorities, reducing the setup time and ensuring a swift establishment of your company.
Golden Visas types are:
1) Golden Visas for Investors/ Real Estate Investors,
2) Golden Visas for Entrepreneurs,
3) Golden Visa for Exceptional Talents,
4) Golden Visas for Outstanding Students,
5) Golden Visas for Scientists,
6) Golden Visas for Skilled Workers.
At First Link, we can offer comprehensive insights into the different types of Golden visas available and support you throughout the application process. From document preparation to submission and follow-up, our PRO services ensure a hassle-free experience for obtaining your Golden visa.
The UAE offers various types of visas, including tourist visas, employment visas, and investor visas, each with specific requirements. A PRO can provide expert guidance on visa types, assist with documentation, and liaise with immigration authorities to ensure timely processing and approval of visas tailored to your needs.
PRO services encompass comprehensive support for trade license renewal in Dubai. Our team manages the renewal process efficiently by tracking expiration dates, preparing necessary documents, and liaising with relevant authorities. Our proactive approach ensures timely renewals, minimizing disruptions to your business operations.
Freelancing in Dubai requires obtaining a freelancer permit, which involves specific documentation and approvals. Our PRO services streamline the application process by guiding you through the requirements, preparing necessary documents, and liaising with relevant authorities. With our assistance, you can easily navigate the freelancer permit process and start your freelancing career in Dubai.
Protecting trademarks and intellectual property is crucial for safeguarding your business assets in Dubai. Our PRO team offers expert assistance with trademark registration, guiding you through the application process and liaising with regulatory authorities. With our proactive approach, you can legally protect your intellectual property rights, mitigating the risk of infringement and unauthorized use.
To obtain an offshore license, you’ll need to choose a free zone offering offshore company formation services (like JAFZA/ RAK), and using a registered agent, you should submit the required documentation, pay the relevant fees, and comply with the regulations set by the free zone authority.
Offshore companies offer benefits such as tax efficiency, asset protection, simplified business operations, and confidentiality. They are ideal for international trading, investment holding, and asset management.
To obtain a work permit in Dubai, you typically need an offer of employment from a company registered in the UAE, a valid employment contract, educational qualifications attested by the UAE embassy, and a medical fitness certificate.
Working illegally in Dubai can have serious consequences, including fines, deportation, and a ban from entering the UAE in the future. Ensuring your employment status is legal and compliant with UAE labor laws is essential.
If you hold a valid employment/ investor visa in Dubai and meet specific requirements, you can sponsor your family members for residence visas. This allows them to live with you in Dubai, enroll in schools, or seek employment.
To sponsor dependents, you must meet specific criteria, including minimum salary, suitable accommodation, attested marriage or birth certificates, and providing the other necessary documents to the immigration authorities.
Yes, under certain conditions, you can sponsor your parents for residency in Dubai. Requirements may include proof of relationship, financial stability, and medical insurance coverage.
Yes, you can form a Trust or Family Foundation, but it can only be formed in recognized freezones like ADGM, DIFC, RAKICC, etc.
Yes, you can avail of tax exemptions for Family Foundations and Trusts, but certain conditions must be fulfilled.