The introduction of corporate tax in the UAE: consequences for business

Programme

Getting ready for the introduction of corporate tax and setting up the system:

• what measures should business take before the first tax period commences;
• how to take into account business parameters of your activity and configure the system from the standpoint of the most advantageous ones:

(a) models of building activity within these parameters,

(b) legally formalising this model,

(c) its accounting and tax accounting.

If the settings are incorrect, all subsequent accounting and anything declared will contain errors. With unfavourable settings, accounting will be correct, but there will be superfluous fiscal payments. Unfavourable and incorrect settings will combine both of these unpleasant factors. We will consider how to configure the system so that this does not happen.  

Corporate tax for free zone residents:

• what conditions need to be complied with, and what implications arise for a free zone resident if the resident fails to comply with these conditions;
• what is the qualifying income of a free zone resident and what corporate tax rates apply to different types of income;
• what difficulties may arise for a business when qualifying types of activity are determined;
• what are the de minimis requirements, why is it important to comply with them and how should one calculate them; 
• how to comply with the adequate substance requirement in a free zone;
• when it makes sense to select the ordinary corporate tax regime.

The corporate tax regime for free zones allows you to apply a zero tax rate. But its application is significantly limited by the UAE Ministry of Finance and, in addition, is associated with various interpretations and uncertainty of corporate tax legislation. At the seminar, we will look into the current rules in order to avoid mistakes in applying the zero rate.

Suspension of DTTs with hostile countries. Can the Emirates become the new Cyprus for Russian business?

• comparing tax implications of transactions with hostile countries and the UAE;
• pros and cons of having a UAE company present in a holding structure

The suspension of double tax treaties with the majority of European countries, the USA, Canada, Australia, the United Kingdom, and Japan in many cases makes the tax implications of cross-border transactions with companies from hostile countries similar in comparison with companies from the UAE. At the same time, the absence of withholding tax in the UAE and the "double guarantee of exemption" of dividends (zero rate and participation exemption) received by Emirati companies makes the UAE attractive for tax structuring of holding activities.