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Corporate tax regime to boost UAE economy, say experts

Taxation Society, IBPC and India Club hold joint awareness session

The impending introduction of corporate tax in the UAE will further enhance the country’s position as a global business hub, experts said at a session on Monday.

A joint session was conducted on corporate tax at India Club on May 15 by India Club, IBPC and Taxation Society, which was attended by over 450 businessmen and professionals.

Siddharth Balachandran, chairman of India Club, said the new corporate tax legislation is an important milestone in UAE’s March towards holistic excellence and becoming a major financial megalopolis. “We at the India Club are united in our efforts, with the Government of Dubai and the UAE, in making the implementation of this landmark development a seamless and successful one. This series of seminars is one such effort and I hope it goes a long way in the complete understanding of the proposed tax legislation,” he added.

Suresh Kumar, chairman IBPC highlighted that the corporate tax will impact several sectors. “Given its implications, what is also needed apart from these awareness educational series is a constant dialogue and some level of policy advocacy. We are gearing ourselves up to create a task force that can take care of policy advocacy,” he said.

Naveen Sharma, chairman of Taxation Society and director events of India Club, said that the UAE has one of the lowest tax rates. “Coupled with minimal compliance requirements and a crystal clear law, it will further enhance UAE’s position as a global business hub,” he added.

Nimish Makvana, senior partner of Crowe UAE and president & co-founder of Taxation Society, stressed on compliance in the new corporate tax era, set to begin on June 1, 2023. “The business houses — who have grown in this prosperous country — it’s time for them to remain compliant with the expectations of the authority and support the initiatives by the government,” he said.

Nilesh Ashar, senior managing director and head of Middle East tax, FTI Consulting, highlighted the relief measures in the new law. “The UAE CT law provides significant administrative relief for UAE taxable persons by allowing taxable persons that are part of 95 per cent direct, indirect and common ownership that meet certain additional criteria to form a single tax group and file one tax return, thereby simplifying the compliance burden,” he said.

T.P. Anand, chief strategist, Leap Business Excellence Advisory FZE elaborated how the small business relief package is a great boon for start-ups and SMEs in the UAE, which constitutes a large majority in the country. “The relief is available to business entities with less than Dh3 Million annual revenue subject to certain conditions,” he said.