1. Legal Structure Evaluation
Businesses must choose the right entity type to optimize tax efficiency and compliance.
- LLC (Limited Liability Company): Subject to 9% corporate tax on profits exceeding AED 375,000.
- Branch: Foreign branches may be taxed based on Permanent Establishment (PE) rules.
- Free Zone Entities: Qualifying Free Zone Persons (QFZPs) can benefit from 0% corporate tax on eligible income, provided they meet specific conditions.
2. Review of Agreements
Contracts and transactions must be assessed for potential tax implications.
- Taxable Transactions: Certain agreements, such as royalty payments, service contracts, and intercompany loans, may trigger tax liabilities.
- Permanent Establishment Risk: Improper structuring of agreements can lead to PE classification and increased tax exposure.
- Compliance Measures: Businesses must ensure contracts align with UAE tax laws to avoid penalties.
3. International Tax Advisory
Cross-border businesses must comply with international tax regulations to minimize risks.
- Permanent Establishment (PE) Rules: Companies with a fixed place of business in the UAE may be subject to local taxation.
- Double Tax Treaties: The UAE has over 100 tax treaties to prevent double taxation and reduce withholding tax rates.
- Transfer Pricing Compliance: Businesses must follow OECD guidelines to ensure fair pricing in cross-border transactions.