FAQ

Tax consultants in Dubai, UAE, are professional experts often from accounting, auditing, or financial advisory firms who help individuals and businesses navigate the complexities of the UAE's tax system, primarily focusing on Corporate Tax , Value Added Tax (VAT), and Excise Tax.
A Free Zone (or Free Trade Zone) in the UAE is a designated geographical area that operates under its own special set of rules and incentives, separate from many of the general regulations applicable in the rest of the country (the mainland).
The primary purpose is to encourage foreign investment and boost the national economy.
Key Features of a Free Zone:
  • 100% Foreign Ownership: Foreign investors can own their company completely without needing a local partner (sponsor).
  • 0% Corporate Tax: Businesses that qualify (Qualifying Free Zone Persons) can benefit from a 0% Corporate Tax rate on their income derived from international trade.
  • No Customs Duties: Companies enjoy 100% exemption from customs duties on imports and exports within the Free Zone.
  • Repatriation: Investors have the freedom for 100% repatriation of capital and profits back to their home country.
  • Independent Authority: Each Free Zone is governed by its own independent Free Zone Authority, which handles licensing, visa processing, and regulation for that area.
The main reason governments collect taxes is to raise revenue to fund their operations and provide public goods and services.
  1. Revenue Generation: To pay for essential public services and infrastructure, such as:
    • Public health (hospitals, medical care)
    • Education (public schools, universities)
    • Defense and Security (military, police, fire services)
    • Infrastructure (roads, bridges, public transit)
    • Social welfare (pensions, unemployment benefits)
  2. Wealth Redistribution: Taxes, especially progressive income taxes (where higher earners pay a higher percentage), can be used to reduce income inequality by funding social programs that benefit lower-income groups.
  3. Economic Regulation/Deterrence: Taxes can be used as a tool to influence behavior.
    • "Sin Taxes" (like the UAE's Excise Tax on tobacco and sugary drinks) discourage the consumption of harmful goods.
    • Tax breaks or incentives can encourage investment or growth in certain industries.
  • Mandatory (Compulsory): Taxes are not voluntary payments. They are required by law, and failure to pay (tax evasion) results in penalties.

  • Non-Earmarked: When you pay a tax, you generally do not receive a specific, direct service in return for that payment (this distinguishes it from a fee, like paying for a passport). The money goes into a general fund.

  • Imposed by Authority: Only a government or recognized public authority has the power to impose and collect taxes.
  • Free Zones: Businesses designated as Qualifying Free Zone Persons can maintain a 0% CT rate on their Qualifying Income (generally income from international or intra-Free Zone activities), provided they meet substance requirements.
  • Individuals: Salaries, wages, personal investment income (e.g., from bank deposits, real estate), and capital gains are exempt and not subject to CT.
  • Mandatory Compliance: All taxable entities, even those expected to pay 0% tax, must register with the Federal Tax Authority (FTA) and file an annual CT return within nine months after the end of their financial year.
  • International Alignment: The law includes provisions for Transfer Pricing rules and will subject large Multinational Enterprises (MNEs) with global revenues over €750 million to a higher tax rate (up to 15%) to align with OECD Pillar Two standards.
Our advice aims to ensure your business achieves full tax compliance and financial improvement within UAE tax laws.

It focuses on two main objectives:

Compliance: Properly fulfill all mandatory obligations of corporate tax (CT), value-added tax, and consumption tax.

Optimization: Structuring your operations (especially free zone status and income thresholds) to legally benefit from the lowest possible tax rates (0% or 9%).
Our consultants offer services focused on Compliance, Optimization, and Risk Management :
  1. Compliance: Handling mandatory CT and VAT registration, ensuring accurate bookkeeping, and submitting all annual tax returns and filings to the FTA.
  2. Planning & Optimization: Strategically structuring your business to utilize the 0% Corporate Tax threshold and advising Free Zone entities on meeting "Qualifying Income" and substance requirements to maintain the 0% rate.
  3. Risk Management: Conducting Tax Health Checks to identify and fix compliance gaps, and serving as your registered Tax Agent for all FTA representation and dispute resolution.
The difference is that basic return filing is transactional, while consultancy is strategic and risk-focused.
  • Basic Filing: This is the administrative task of calculating the difference between your Output VAT (collected on sales) and Input VAT (paid on purchases) and submitting the VAT Return Form (VAT 201) by the deadline. It's focused on recording past activities.
  • Consultancy Services: This goes far beyond filing to focus on optimization, risk mitigation, and savings. It includes:
    • Classification: Correctly classifying goods and services as 5%, 0%, or Exempt to avoid under- or over-paying tax.
    • Refunds: Identifying all eligible Input VAT and managing the complex process of claiming VAT refunds from the FTA.
    • Advisory: Providing guidance on the VAT implications of complex transactions, such as real estate deals or international services.
  • Tax Health Check: This is backward-looking. It's a review of your past financial records (usually the last 3-5 years) to identify existing compliance errors, assess current tax risk, and fix any discrepancies before an official FTA audit finds them.
    • When to use: Annually, before a major acquisition, or if you suspect past non-compliance.
  • Tax Planning: This is forward-looking. It involves developing strategies for future transactions and operations to legally minimize tax liabilities (e.g., maximizing the 0% CT threshold or structuring contracts for optimal VAT treatment).
    • When to use: Before starting a new project, entering a new market, or implementing significant organizational changes.
Qualifying Income is the income earned by a Free Zone business that is eligible for the 0% Corporate Tax rate. This income is mainly profits derived from:
Transactions with other Free Zone companies (except for excluded activities).
Specific Qualifying Activities (like manufacturing, logistics, or trading commodities) with clients outside the UAE mainland.