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From its implementation in 2018 to October 2021, the total value-added tax revenue distributed in the UAE at the state level has exceeded AED 95.4 billion (US$ 26 billion).
Nizam Deen, founder and CEO of CS Events.
The UAE business community is awaiting the new UAE federal corporate tax law, which will help companies start preparing for the new corporate tax regime, officials said at the UAE Corporate Tax Forum organised by Dusit Thani Cogent Solutions Events Management (CS Events). . The nearest hotel.
The UAE government said in January that it would impose a 9% corporate tax on businesses with a net profit of more than Dh375,000 from June 2023, about five and a half years after the introduction of the 5%. Value Added Tax (VAT) for January 2018. This requires the company to provide a proper accounting system and publish an annual financial audit report, based on which the corporate tax is calculated. The company must then submit an audited corporate tax financial report to the UAE Federal Tax Authority (FTA).
From its implementation in 2018 to October 2021, the total value-added tax revenue distributed in the UAE at the state level has exceeded AED 95.4 billion (US$ 26 billion).
The Government has so far issued a public consultation paper on the matter. The new UAE federal corporate tax law, which will govern the corporate tax system, has yet to be released. Officials at the UAE Corporate Tax Forum said the law could be published as early as this month and as late as October this year.
“We expect the UAE Federal Corporate Tax Code to be published by next month at the latest, if not September, which will help businesses, tax advisors and accounting software providers prepare for implementation by June next year,” said the group head Hany Elnaggar, direct and international tax, told delegates at the UAE Corporate Tax Forum.
“The introduction of any new tax was initially a concern for taxpayers as it would affect a company’s bottom line until it became routine and part of the corporate culture. However, concerns have grown due to a lack of preparation and compliance issues. “
Of the approximately 650,000 registered businesses in the UAE, around 85% fall under the UAE’s Micro, Small and Medium Enterprise (MSME) category, which is transitioning from a tax-free environment to an unprepared or under-prepared tax regime as the countdown continues. Profits of up to Dh375,000 will not be taxed, a move that will help small businesses.
Most companies are probably outside the scope of the corporate tax system. However, these companies may have to maintain proper audited balance sheets and profit and loss statements to determine if they are exempt from the corporate tax regime.
Allaying public concerns and fears, Seema Sharma, head of tax group at Network International, said: “The UAE tax system is very competitive. You only pay 9% corporate tax on net profits over AED 375,000. If the profit is less than The prescribed Dh375,000, then companies have nothing to declare or fear. Initially, there were concerns about the introduction of corporate tax. But now the fears and concerns are fading.”
According to the latest estimates from the International Center for Taxation and Development, about half of the world’s countries account for more than 80% of total government revenue, and almost every country exceeds 50%. The GCC countries are the exception – basically exempt from corporate or personal income tax.
Compared to 2019, EU revenue from tax and social contributions fell by EUR 215 billion in 2020 to EUR 5.53 trillion. U.S. corporate income tax revenue will reach $372 billion in 2021. Forecasts predict that corporate income tax revenue will increase to $505 billion in 2032.
However, as a country, the UAE is new to taxation, as are the people and active businesses living in the country.
Although businesses that fall under the MSME category may therefore not fall within the scope of the 9% UAE corporate tax applicable to businesses generating profits of at least AED 375,000 in the reporting year, however, they still have to accept that even if this means “0”, experts say Taxes are due, as well as proper financial reporting and tax filing processes.
Most of them do not have proper accounting systems, let alone financial reporting processes, which can make it difficult for them to file corporate tax returns.
To examine the situation, raise awareness and help the private sector prepare for UAE corporate tax, CS Events organised the UAE Corporate Tax Forum.
Nizam Deen, founder and CEO of CS Events, organizer of the UAE Corporate Tax Forum, said: “Emirati companies will initiate formal accounting and auditing processes to transition from a tax-free environment to a tax-free environment. Regime – Culture for the next nine months Shift. They must first adapt to new ways of thinking and new ways of thinking before they can adapt to proper accounting and financial reporting processes – first.
“However, for larger companies, this is just in addition to their already robust accounting and auditing processes.”
The event was attended by 200 senior representatives, including chief financial officers, chief executive officers, tax executives, audit executives, treasurers, accounting executives from the region, to get business insights from the region’s top industry leaders and experts. Knowledge and insights on taxation and its challenges.
The UAE Corporate Tax Forum features interactive panel discussions that delve into insights from experts such as Hany ElNaggar – Head of Group Direct and International Tax, Basel Abughazaleh, MENAT, Regional Head of Business Tax, HSBC; Seema, Head of Tax Group, Network International Sharma; Nauman Asif Mian, CFO, Bayt.com; Francisco Sousa Soares, VP Tax, Taqa Group; Manish Arora, Regional Tax Manager, Schneider Electric; Faizan Dar, Tax Specialist for a leading FMCG company; Aparna Lakshminarasimhan, GFG Alliance Group Transfer Head of Pricing; Zeeshan Humayun, Director of Transfer Pricing, PwC, Moderator.
The UAE Corporate Tax Forum also provides opportunities for tax advisors, law firms and enterprise resource planning (ERP) solution providers to showcase their products and services and meet industry needs.
business@khaleejtimes.com
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