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UAE corporate tax: Experts urge companies to upgrade systems

Organisations are also reminded to review the law and the guidelines and make necessary adjustments

Published: Fri 7 Jul 2023, 7:45 PM

Updated: Sun 9 Jul 2023, 1:03 PM

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Supplied photo

Supplied photo

More than 300 businessmen, professionals and other stakeholders took part in tax awareness event held at India Club in Dubai recently.

The event — which focused on the UAE's corporate tax scheme — was jointly organised by India Club, IBPC and Taxation Society.

The guest honour, Dinesh Kothari, vice-chairman and managing director of Delhi Private Schools, said the introduction of corporate tax in the UAE is "a very progressive step" for the country.

Bharath Chachara, CEO of India Club, said that the UAE corporate tax law is "so simple that even a non-professional can understand easily".

"It is also one of the lowest tax rates, and minimal compliance requirement will further enhance UAE’s position globally," he added.

Naveen Sharma, chairman of Taxation Society and director for events and culture at India Club, lauded the start of the corporate tax implementation.

"Companies should carefully go through ministerial decisions, the law and explanatory guide and start ensuring compliance," Sharma said.

He also urged firms to review the transitional rules involved in the scheme and improve their IT systems, and quality of documentation.

Nimish Makvana, president of Taxation Society and senior partner at Crowe UAE, said: “The UAE Corporate Tax law is effective. Business leaders and professionals need to keep in mind the General Anti-Abuse Rule (GAAR) [Article 50] before any restructuring or reorganisation takes place at the entity level. It is the responsibility of all business houses and professionals to support the initiative of the government by following the laws. “

Jay Krishnan, senior partner at HLB HAMT, said: “The recent government decisions supports all small, medium and large-sized companies by fixing a high turnover threshold for mandatory transfer pricing compliances, etc."

Sahitya Chaturvedi, head of accounts and finance at Ajmal Perfumes, said the corporate tax in UAE is "a bright cultural shift towards globalisation and transparency in transactions".

Harsh Bhojani, associate director at AJMS Tax, said “it would be critical for multinational businesses to evaluate the tax impact in light of international taxation laws including tax treaties."

Thomas Scaria, GM Finance and board member, Joyallukas Jewelry, said that the implementation of the scheme for the gems and jewellery sector should pave the way for "more professionalism, self-regulation and better compliance in sourcing and supply chain management".

Manu Palerichal, founder partner and CEO, Emirates Chartered Accountants Group, said: “To determine the tax treatment for free zone companies, three steps need to be followed. First, assess if the entity qualifies as a qualifying free zone person (QFZP). Then, analyse the type of customers it deals with. Lastly, consider the nature of the business/activity."

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