Tax experts at a conference highlighted the misconception surrounding zero per cent tax eligibility for businesses in the UAE. Mahar Afzal, CEO at Kress Cooper, clarified that simply being based in a free zone does not automatically exempt a company from corporate profit tax. Businesses need to assess their status and activities to determine if they are eligible for a zero per cent corporate tax rate. The Federal Tax Authority in the UAE provides guidelines and support to ensure businesses are aware of local tax laws. The 9 per cent corporate tax regime in the UAE has been implemented from June 1, 2023, making it one of the lowest in the world to attract businesses.
Jai Prakash Agarwal, vice-chairman of ICAI Dubai, mentioned that free zone entities may not have to pay taxes if they meet certain conditions, but they still need to register and file returns. Aatish Shah, head of tax at DP World, added that free zone entities engaged in qualifying activities can benefit from zero per cent taxation. However, it is essential for companies not engaged in qualifying activities to analyze their operations to determine if they are eligible for tax exemptions. The decision to operate in a free zone or the mainland should be based on the nature of the business activities.
The role of technology in modern tax compliance was discussed during the conference. Harsh Doshi, group tax manager at Dubai Investments, emphasized the importance of technology solutions for tax compliance as tax technology becomes integral in organizations. Kalaiarasan Manoharan, group tax director at Noon, suggested aligning technology strategy with business strategy and maintaining a dashboard for ease of tax compliance. Joao Cabral, group head of tax and treasury at Dutco Group, highlighted the changing tax landscape due to technological advancements adopted by tax authorities and regulators globally.
Basel Arafe, partner in UAE Corporate Tax at Deloitte, presented on navigating tax accounting in the first year of corporate tax. He advised businesses to establish a tax accounting policy, analyze consolidated adjustments, liaise with auditors to avoid surprises, and prepare all necessary working papers. Nirav Shah, director of Fame Advisory, delivered closing remarks at the conference, emphasizing the importance of staying informed about tax regulations and requirements in the UAE.Overall, the conference provided valuable insights for businesses in the UAE to navigate corporate tax laws effectively and ensure compliance while leveraging technology for enhanced tax management.
