Shuraa Tax Blog

Author: Kajol Kanojia

  • Tax Invoice Format UAE – FTA VAT Invoice Format

    Tax Invoice Format UAE – FTA VAT Invoice Format

    A tax invoice is a written or electronic document that documents the occurrence and specifics of a taxable supply and is defined as such by the UAE VAT Law.  Article 65 of the VAT Law requires the tax registrants making taxable supplies to issue an original Tax Invoice Format in the UAE and send it to the recipients of the goods and services. In cases where the provisions exceed AED 10,000, all tax registrants must produce tax invoices on taxable deliveries to other registrants with all mandatory details.

    Businesses that don’t send out tax invoices are subject to administrative fines. The UAE VAT Law has established several requirements for issuing tax invoices. Businesses in the UAE must strictly adhere to these requirements to avoid administrative VAT penalties.

    Requirements for Tax Invoice Format UAE

    Understanding the Tax Invoice Format in UAE is essential for businesses. To comply with the requirements, a UAE tax invoice must include the following details:

    1. Title: The words “Tax Invoice” must be displayed.
    1. Invoice Number: A unique sequential number for each invoice.
    1. Date of Issuance: The date the invoice was issued.
    1. Seller Information:
    • Name
    • Address
    • Tax Registration Number (TRN)
    1. Buyer Information:
    • Name
    • Address
    • TRN (if applicable)
    1. Description of Goods/Services: Detailed description of the goods or services provided.
    1. Quantity and Unit Price: Breakdown of the quantity and unit price of the supplies.
    1. Tax Details:
    • Applicable Tax rate
    • The exact amount of Tax charged

    Meeting these requirements ensures that your tax invoices are clear, comprehensive, and legally compliant, facilitating accurate VAT calculation and reporting. This helps protect businesses from potential penalties and legal issues in the UAE.

    UAE Requirements for Issuing Tax Invoices

    To issue a tax invoice in the UAE, businesses must meet certain requirements according to Article 59 of the Executive Regulations. Here are the key points:

    Tax Invoice Requirement:

    • Companies must provide a tax invoice whenever a supply is made.
    • The recipient of the supply must receive the tax invoice.

    Simplified Tax Invoice:

    • Only eligible suppliers can issue a simplified tax invoice.
    • A simplified tax invoice does not require a net value (amount excluding tax).

    Full Tax Invoice:

    • Each line item’s tax value and net value must be displayed.
    • Gross value is not required.

    Mandatory Details:

    • Date of issuance.
    • Unique invoice number.
    • Description of the goods or services supplied.

    VAT Amount:

    • Indicate the amount of VAT being charged.
    • This should be separate from the total amount being charged.

    Zero-Rated or Exempt Supplies:

    • Clearly state that no VAT is charged for zero-rated or exempt supplies.

    Record Keeping:

    • Keep a record of all VAT invoices issued and received.
    • Helps in staying on top of VAT reporting requirements.

    Compliance:

    • Ensure the VAT invoice format complies with UAE VAT regulations.
    • The format should include all mandatory information and be easy to understand.

    Proper Signing and Dating:

    • Ensure VAT invoices are properly signed and dated to avoid disputes.

    Following these guidelines ensures your tax invoices comply with UAE regulations and helps avoid potential issues.

    UAE’s Issuance of a Simplified Tax Invoice for VAT

    The Federal Tax Authority permits the tax invoice’s contents to contain less information than is customary in certain circumstances. In the United Arab Emirates, these invoices are simplified tax invoices, which are permitted by Article 59(5) of the Executive Regulations. It is possible to issue a simplified tax invoice in the following situations:

    • If the recipient is a VAT-registered party and the supply’s consideration is AED 10,000 or less.

    VAT Invoice Format UAE

    VAT invoice Format in UAE is an important activity for all organisations registered for VAT. When a taxable supply of goods or services is made, a registrant must issue a tax invoice, a crucial document.

    All firms must adhere to the VAT invoice format established by the FTA to avoid VAT fines and penalties in the UAE. For all organisations, knowing how to create a tax invoice in the UAE is a crucial duty and question.

    VAT Invoice Format UAE
    Source: www.tax.gov.ae

    UAE FTA Tax Invoice Format

    Maintaining the correct VAT invoice format in the UAE is important for complying with the UAE VAT regulations. The Federal Tax Authority (FTA) has specific requirements for VAT invoices that businesses must follow. These requirements help ensure accurate reporting and payment of VAT.

    Why Proper VAT Invoice Format is Important

    • Compliance: Avoid penalties and fines from the FTA for non-compliance.
    • Accurate Record-Keeping: Helps businesses track VAT transactions and calculate VAT liabilities accurately.

    Types of Tax Invoices

    • Simplified Tax Invoice
    • Full Tax Invoice

    By following the FTA’s requirements, businesses can stay compliant and manage their VAT transactions effectively.

    Simplified Tax Invoice

    Line items will be displayed at the gross value in a streamlined tax invoice.

    The following information must be included in a simplified tax invoice format UAE:

    • The invoice plainly states that it is a “Tax Invoice”.
    • The supplier’s name, address, and Tax Registration Number (TRN).
    • The day the tax invoice was sent out.
    • A summary of the products or services offered.
    • The total consideration was received, and the taxes were paid.
       

    The whole consideration (or total gross value) is displayed at the bottom of the simplified tax invoice, and the tax included in that value is shown on a separate line.

    Full Tax Invoice

    Businesses are typically required to provide a complete tax invoice. The following information should be included in a comprehensive tax invoice format UAE:

    • A clear depiction of the text Tax Invoice.
    • The supplier’s name, address, and tax identification number.
    • The recipient’s name, address, and tax identification number.
    • Tax invoice number in order.
    • When the invoice was first issued.
    • Supply date.
    • A summary of the products or services.
    • Total amount due in AED.
    • Each line must contain net value and tax amount

    Tax Invoices Issued in Foreign Currencies

    When issuing a tax invoice in a foreign currency, the following details are required:

    1. Tax Amount: The tax amount payable must be expressed in AED.
    1. Exchange Rate: The exchange rate applied, as per the rates published by the UAE Central Bank on the date of supply, must be included.

    Tax Invoice Rounding

    When a tax invoice must be made, and the tax owed on the supply is expressed as a fraction of a Fils, the amount may be rounded mathematically to the closest Fils.

    As previously stated, the tax amount should be calculated line by line. In practice, any rounding should also be done line by line.

    Mathematical logic should be used to round the tax value on the tax invoice to the closest whole Fils or two decimal places. This is meant by “rounding the value on a mathematical basis.”

    For instance: 9.862 AED would change to 9.86, while 2.357 AED would become 2.36.

    VAT for Discounted Bills

    VAT will be applied to the value that is calculated after taking the discount into account. After the discount, VAT will be added to the pricing.

    Only if the following requirements, which are outlined in UAE VAT Executive regulations, are satisfied will the discount be permitted to be deducted from the value of supply:

    • The price drop has been advantageous to the buyer.
    • The discount was funded by the supplier.

    For example, if the supply value is 10,000 AED and the discount is 500 AED. In this instance, after considering the discount value, the value of the supply is determined to be AED 9,500. VAT will be applied to AED 9,500.

    Tax Invoice-Related Administrative Penalties format

    The UAE Tax Procedures Law makes it illegal to disregard tax invoice standards. According to the amended VAT penalties regime, firms that fail to produce a tax invoice when making any supply will receive an AED 2,500 fine for each case.

    Businesses that issue tax invoices electronically, if they do not follow the rules and regulations for the UAE’s issue of electronic tax invoices, will be subject to a fine of AED 2,500. Dubai’s VAT advisors can help companies avoid fines.

    FTA Approved Tax Agents in the UAE

    Businesses that fail to send tax invoices will be subject to severe fines, but VAT consultants in Dubai, like Shuraa Tax Consultants, can help you avoid the penalty. One of the top FTA-approved tax agents in the UAE, our knowledgeable staff can assist you with requirements such as UAE VAT registration, VAT deregistration, VAT compliance / VAT Return, excise tax services, and services linked to VAT reconsideration, Corporate Tax filing, etc. Get in touch today at +971508912062. You can also email us at info@shuraatax.com.

  • FTA’s VAT Administrative Exceptions in UAE

    FTA’s VAT Administrative Exceptions in UAE

    UAE VAT Administrative Exception is a way to provide registrants with concessions or exceptions allowed by the Federal Decree-Law No. 8 of 2017 on Value Added Tax (“Law”). UAE VAT Administrative Exception also stands under the Cabinet Decision No 52 of 2017 on the Executive Regulations of the Federal Decree-Law No. 8 of 2017 on Value Added Tax (“Executive Regulations”)

    The UAE VAT Administrative Exception is under mechanism if difficult circumstances prevent businesses and companies from following certain procedural aspects of the Law or the Executive Regulations.

    Eligibility Criteria for UAE VAT Administrative Exception

    Three conditions describe the eligibility for UAE VAT Administrative Exception for companies and businesses in the UAE: 

    1. It is crucial that the applicant is registered as a commercial entity with the Federal Tax Authority in the UAE.
    1. Fulfil the requirements regarding the relevant Exception Request, as outlined by your tax agent in Dubai or as advised by the FTA.
    1. Be sure to submit all the supporting documents related to the UAE VAT Administrative Exception.

    Categories of UAE VAT Administrative Exceptions

    Only specific categories can make UAE VAT Administrative Exception FTA Requests. Such categories and the fundamental conditions for the exceptions, along with reference from the Law

    UAE VAT Administrative Exceptions are grouped into the following categories –

    Tax Invoices

    The registrant must demonstrate the available records describing the particulars of any supply. The records must also prove that issuing a tax invoice per Article 59(1) or Article 59(2) of the Executive Regulations for UAE Tax Invoices would be impractical.

    Tax Credit Notes

    It is crucial for the registrants or applicants to show the records available to ascertain the particulars of any supply. They also must prove that it would be impractical to issue a Tax Credit Note as per Article 60(1) of the Executive Regulations for UAE Tax Credit Notes.

    Length of the Tax Period

    The registrant should provide the reasons for requesting a change in the length of the Tax Period. The FTA considers the request to change the length of the tax periods in UAE to only for certain categories.

    Nevertheless, while requesting a change, the applicants will have to provide the required information depending on the categories segregated, those are as follows –

    • Individuals: Board members, property owners, and others, such as freelancers, can apply to change the Tax Period. The FTA will consider all the supplies made by persons on these designations before deciding. These commercial individuals must submit the number of invoices issued in the preceding 12 months, including the total tax paid in the preceding 12 months.
    • Constant Tax Refunds: Businesses are in a continual refund position throughout the tax period in the preceding 12 months and expect to remain in the same position. UAE VAT Administrative Exception Requests here are conditioned on whether the registrant expects any change in the business model that may result in a change of refund position.
    • SMEs with funding: Registered SMEs receive official financing approved by the government and can apply for a change in their tax period. You must submit the documentation for the total tax paid and the taxable supplies for the past 12 months.
    • SMEs without funding: Registered SMEs that do not receive official funding approved by any government entity provided the total value of taxable supplies in the preceding 12 months was equal to or less than AED 5 million. The SMEs without Government funding can submit their UAE VAT Administrative Exception requests after displaying total tax paid, taxable supplies or any penalties paid in the last 12 months.

    Change Stagger

    An applicant or registrant who files UAE taxes quarterly uses a stagger. The applicant may request a change in the stagger assigned to him when the Tax Period ends, depending on the month he requests. However, the condition here is that the registrant must provide the reasons for requesting the change in stagger.

    How do you submit a VAT administrative request in the UAE

    Once you have completed the VAT Administrative Exception Application Form, you can view the status of your application on the Emaratax portal. The status will be updated to reflect the current stage, such as “in review,” “approved,” “rejected,” or “additional information requested.“

    Who Can Submit the VAT Administrative Exception Application Form on Your Behalf?

    The VAT Administrative Exception Application Form can be submitted by:

    • The authorised signatory of the registrant.
    • The registrant’s appointed tax agent.
    • The registrant’s appointed legal representative.

    If you are a member of a tax group, the request should be submitted by the tax group’s representative.

    Guidance for Completing the VAT Administrative Exception Application Form

    This guidance is designed to help applicants understand the questions in the VAT Administrative Exception application form and ensure accurate completion. A separate Emaratax user guide provides detailed instructions on submitting the exception request.

    Selecting the Relevant Category

    • Once you select the relevant category for your Administrative Exception, the system will direct you to the appropriate form.

    Completing the Form

    • In addition to filling out the form, you must describe why you seek a VAT Administrative Exception. This should include:
    • A description of why you are requesting based on the outlined criteria.
    • A supporting letter detailing your request’s background and facts, including reasons why you cannot meet the legal requirements and therefore need an exception.

    Providing Supporting Documents

    • You must also submit any documentary proof supporting your request’s factual and legal grounds. This may include alternative documents, sample invoices, contracts, payment slips, or other relevant documents.
    • The type of documents required will depend on the exception category.
    • Accepted file types are PDF, DOC, XLS, XLSX, JPG, PNG, and JPEG, with a total file size limit of 15 MB.

    Following this guidance, you can ensure your VAT Administrative Exception in UAE application is complete and accurate.

    Time Extension for the export of goods

    The FTA can extend the 90 days from the date of supply. In case, if the FTA has determined after the supplier has applied in writing, then the time extensions proceeded in the way segregated below:

    • Due to the nature of the supply, it is not practicable for the supplier to export the goods, or the class of goods, within 90 days of the date of supply.
    • The registrant must provide the actual reasons/circumstances, as prescribed under the law, to seek an extension of time to export goods.

    Need to know more about UAE VAT Administrative Exception or get through your UAE VAT Administrative Exception Requests? Speak to Shuraa Tax Consultants and Accountants in Dubai, we will solve all your problems related to UAE taxation. Get your free VAT consultation by Getting in touch today at +971508912062. You can also drop us an email at info@shuraatax.com.

  • VAT Exempt Supplies in UAE

    VAT Exempt Supplies in UAE

    Exempt supplies in UAE are defined as the supply of goods and services where no Value-added Tax (VAT) is charged, and no claim on the related Input tax is allowed except as stated by the UAE decree-law. According to UAE executive regulations, certain goods and services are free from VAT, meaning such goods or services are not subject to VAT and are exempt from VAT charges.

    Businesses dealing with the supply of such exempted goods and services cannot claim Input tax related to the exempt supply. Any VAT on expenses related to the exempt supply becomes part of the supplier’s cost.

    For example, a company pays 4% of the VAT when purchasing raw materials. Let’s assume the final goods created from that raw material are exempt goods. Since it is an exempt supply, the Company cannot claim the 4% input tax that it paid at the time of purchasing the raw material. Hence, it will become part of the cost of the product.

    What are Exempt Supplies in UAE VAT?

    Exempt supplies in UAE VAT refer to goods and services not subject to VAT, meaning businesses do not charge VAT on these transactions. However, businesses providing exempt supplies cannot recover the VAT they incur on their purchases related to these supplies.

    Exempt supplies include certain financial services, residential properties, and local passenger transport. This means that while these transactions are free from VAT, the businesses involved cannot claim back the VAT on their related expenses.

    List of exempted goods and services in the UAE

    For goods and services to be exempt, they should be as specified by the UAE’s VAT Law and Executive Regulations. Here is a list of certain VAT-exempted goods and services in UAE which every person dealing in business should know:

    1. Financial Services

    Financial services are money-centered services. Credit services, loans, insurance, deposits, investments, etc., are all finance-related services. It is important to know that not all financial services are VAT-exempt supplies, and only certain financial services fall under this category.Following are the financial services which are VAT-free: 

    • There will be no VAT charge on Financial Services not conducted in return for discounts, commissions, explicit fees and rebates, or similar benefits.
    • Issuing, allocating or transferring the ownership share in any corporation or entity is VAT-exempt.
    • Transferring the ownership of a life insurance contract or provision of reinsurance due to such a contract is VAT-exempt

    2. Residential Buildings

    Supply of residential buildings is VAT-exempt under the following conditions: –

    • Supply of residential buildings which is not zero-rated supply
    • If the duration of the lease period as per contract is more than 6 months; or a tenant holds a legal ID proof card issued by the Federal Authority for Identity and Citizenships.

    The first supply of residential buildings within three years of completion, or those converted from non-residential to residential as mentioned in the executive regulation on VAT Decree-Law, is zero-rated.

    Residential buildings are constructed solely for human inhabitation, such as apartments, student accommodations, police or armed forces, nursing homes, orphanages, etc. Any building not built to accommodate people, such as hospitals, hotels, or serviced apartments, will not be treated as a residential building. VAT will apply to the supply of non-residential buildings.

    3. Bare Land

    It is empty land with no buildings or other things built or designed. These are VAT-exempt supplies.

    4. Local Passenger Transport Services in the UAE

    Local passenger transport services in the UAE are exempt from VAT when transporting people within the country by land, water, or air. This includes vehicles like taxis, buses, trains, trams, monorails, ferry boats, abras, and similar means of transport designed for passenger use. Helicopters and aeroplanes approved for passenger transport under the Civil Aviation Act are exempt.

    However, pleasure trips and any local passenger transport service by aircraft that constitutes “international carriage” as per UAE executive regulations are not exempt and are subject to a 5% VAT.

    With Shuraa Tax!

    Shuraa Tax and Accounting Services LLC is Dubai’s best-known brand for effective VAT services. We are the best VAT consultants in Dubai. If you wish to gain more detailed knowledge about VAT-exempt supplies in the UAE, contact our team of qualified accountants and consultants. Get in touch today at +971508912062. You can also drop us an email at info@shuraatax.com.

  • How to Download VAT Certificate in UAE

    How to Download VAT Certificate in UAE

    In the UAE, businesses exceeding an annual turnover of AED 375,000 must register for VAT. Upon registration, these companies must levy VAT on taxable goods and services provided to customers, alongside submitting regular VAT returns to the FTA. The VAT certificate in UAE adherence to UAE VAT laws and regulations.

    Are you prepared to obtain your VAT certificate in the UAE? Knowing the correct procedure is essential for businesses operating in the region. At Shuraa Tax, we’ve streamlined the process to make sure you can effortlessly download your VAT certificate in the UAE. Let’s explore further!

    VAT Certification in UAE

    Opting for a VAT certification in Dubai is not mandatory, but it offers significant advantages to businesses by providing comprehensive transaction details. The certification process involves completing a VAT training course offered by various agencies. This training covers essential operational aspects such as purchasing, selling, importing, exporting, and understanding input and output VAT.

    Due to its high demand, getting this certificate typically takes 2-3 weeks. Once acquired, the UAE VAT certificate equips businesses with the necessary information and skills to manage VAT compliance challenges effectively.

    The VAT Certificate in UAE includes:

    • Applicant details
    • Estimated registration date
    • First VAT return deadline
    • Dates marking the beginning and end of the tax period

    Facts About Value Added Tax (VAT) in Dubai

    Here are some essential details about VAT in the UAE:

    • VAT is applied at a rate of 5% across the UAE.
    • The FTA imposes a 0% tax rate on specific goods and services.
    • Companies with annual expenditures exceeding AED 187,500 can opt for VAT registration.
    • Businesses earning over AED 375,000 annually are required to register for VAT with the Federal Tax Authority (FTA).
    • Registered sellers with the FTA are eligible for tax credits or reimbursements on VAT paid during purchases.

    Benefits of VAT Certificate in UAE

    The VAT certificate in Dubai is highly sought as compared to others. It offers significant advantages:

    • Possession of a VAT certificate demonstrates a commitment to VAT compliance, aiding in building trust with clients seeking reliable business partners.
    • The rigorous training required to get the VAT certificate equips individuals with detailed knowledge of calculations, bookkeeping, and filing returns. This knowledge minimises errors and improves productivity.
    • Holding a VAT certificate provides different advantages, such as reducing the risk of FTA penalties and developing better decision-making skills for business growth.

    How to get a VAT Certificate via EmaraTax

    EmaraTax, the UAE’s new digital tax platform, streamlines obtaining your VAT Registration Certificate. Here’s how:

    Existing FTA account users have their tax certificates automatically transferred from e-services upon migrating to EmaraTax.

    New taxpayers can follow these steps:

    1. Log in to EmaraTax using your Emirates ID, UAE Pass, or taxpayer account credentials.

    2. Navigate to the dashboard and locate the VAT registration certificate in the “My Correspondences” section of your Taxable Person account.

    3. Click on the certificate and download it in PDF format.

    For detailed guidance, watch this video: [VAT Registration on EmaraTax https://www.youtube.com/watch?v=bvb3AQLFXv4.

    Note: If your tax registration certificate wasn’t previously accessible in PDF format on the system, it won’t appear on your EmaraTax dashboard.

    How to Download VAT Return in EmaraTax?

    The FTA allows you to download an acknowledgement exclusively for submitted returns in EmaraTax. Here’s how to download a VAT certificate in UAE:

    1. Log in to EmaraTax.

    2. Submit your VAT Returns, ensuring all required documents are included.

    3. Complete the payment process.

    4. After submitting your VAT return, find the acknowledgement screen.

    5. Click to download the acknowledgement screen.

    Additionally, the FTA will send an email to confirm the submission of your refund in EmaraTax.

    How do you get a VAT Registration Certificate for newly registered taxpayers?

    After registering for VAT in EmaraTax, you can view the payment in your Transaction History and download the receipt. Follow these steps to obtain a hard copy of the VAT Certificate:

    1. File an application: Apply form through the FTA VAT Certificate service.
    1. Receive Request Number: The FTA will provide you with a Request Number, which you’ll use to pay the fees on the EmaraTax portal.
    1. Pay the Service Fee: The FTA service fee for a VAT Certificate is AED 250. Pay this fee through the EmaraTax portal using an E-Dirham or debit/credit card. Obtain a payment reference number.
    1. Payment Confirmation: After you make the payment, you’ll receive a confirmation email. The FTA will print and mail your VAT Certificate to your registered company address.

    Alternatively, you can get the VAT Certificate service from Dubai Customs for AED 100 plus additional charges.

    How do you download a VAT registration certificate for previous taxpayers?

    Below are the points which will help you download the VAT registration certificate for the previous taxpayers:

    1. Access the EmaraTax platform using your Emirates ID, UAE Pass, or taxpayer account credentials.
    1. In the dashboard, find your VAT registration certificate under “My Correspondences” in your Taxable Person account.
    1. Click on the certificate and download it as a PDF.
    VAT registration certificate

    Note: If you are a previous user and your tax registration certificate was unavailable as a PDF document in your old account’s dashboard, you cannot find it in your EmaraTax dashboard.

    How to Register for VAT in UAE

    VAT registration is optional for businesses in the UAE. However, businesses must register for VAT if their taxable supplies and imports exceed AED 375,000. Additionally, businesses can voluntarily register for VAT if their taxable supplies and imports surpass AED 187,500.

    According to the UAE Federal Tax Authority (FTA), taxable supplies are defined as:

    “Goods or services provided by a business in the UAE, taxable at either 5% or 0%, including imports under similar taxable conditions.”

    Businesses gather VAT from customers and remit it to the government. VAT-registered businesses can also reclaim any VAT paid to their suppliers from the government.

    Required Documents and Forms for VAT Registration in UA

    When applying for VAT registration in the UAE, make sure you compile the following information in the appropriate format for your online application:

    1. Valid trade license(s)
    1. Passport/Emirates ID of the authorised signatory(s)
    1. Proof of authorisation for the authorised signatory(s)
    1. Contact information
    1. A bank letter confirming the applicant’s bank account details

    Additional documents may be required based on the nature of your registration:

    For Taxable Supplies (excluding Federal and Emirate Government)

    1. Audit report (audited or non-audited financial statement)
    1. Self-prepared calculation sheet detailing taxable/zero-rated supplies based on financial records
    1. Projected revenue with supporting documents such as a Local Purchase Order or Contract
    1. Monthly turnover declaration for specified periods, signed and stamped by the authorised signatory on the entity’s printed letterhead
    1. Supporting financial documents (e.g., invoices, LPOs, contracts, title deeds, tenancy contracts)

    For Taxable Expenses (excluding Federal and Emirate Government)

    1. Audit report (audited or non-audited financial statement)
    1. Expense budget report

    Additional Documents

    1. Articles of Association/Partnership Agreement (if applicable)
    1. Certificate of Incorporation (if applicable for Legal Person)
    1. Documents showing ownership information of the business
    1. Customs details (if applicable)
    1. Power of Attorney documents (if applicable)
    1. Club, charity, or association registration documents and supporting evidence (if applicable for “Legal person – Club, Charity, or Association”)
    1. Copy of the Decree (if applicable for “Legal person – Federal UAE Government Entity” or “Legal person – Emirate UAE Government Entity”)
    1. Other relevant documents providing information about your organisation, its activities, and size (if applicable for “Legal person – Other”)
    1. Scanned copies of the Emirates ID and passport for the manager, owner, and senior management
    1. Scanned copy of the land/property title deed (if applicable for “Legal Person – Incorporate/Legal Person – Club or Association/Legal Person – Charity/Legal Person – Federal UAE Government Entity/Legal person – Emirate UAE Government Entity/Natural Person”)

    Read more: Tax Residency Certificate in UAE

    Shuraa Tax in UAE

    Shuraa Tax sets the standard for VAT registration services in the UAE, utilising FTA FTA-registered tax agents with direct access to EmaraTax. Our expert team is well-versed in guiding clients through VAT registration and obtaining VAT Certificates via the EmaraTax portal.

    Do you need assistance downloading your VAT Certificate from EmaraTax? Shuraa Tax Dubai is here to help! Call +971 50 891 2062 or email info@shuraatax.com today.

    FAQs

    Q1. What are the Consequences of Operating Without VAT Certification in Dubai?

    Operating without VAT certification in Dubai can lead to severe penalties, including hefty fines, suspension of services, and even business closure. It also risks damaging your reputation and losing customer trust.

    Q2. How to Get VAT Certified in Dubai?

    To get a VAT certification in Dubai, businesses need to:

    1. Register for VAT with the FTA.

    2. Ensure compliance with VAT regulations.

    3. Maintain accurate financial records.

    4. Undergo periodic audits.

    Q3. Who Needs VAT Certification in Dubai?

    Any business operating in Dubai or the UAE that meets the mandatory VAT registration threshold must obtain VAT certification to legally conduct taxable activities and comply with tax regulations.

  • Brief Information About the Federal Tax Authority in UAE

    Brief Information About the Federal Tax Authority in UAE

    The Federal Tax Authority (FTA) in the UAE is the government body responsible for managing and collecting taxes in the country. Established in 2017, the FTA oversees the implementation of value-added tax (VAT) and excise tax. It ensures businesses and individuals adhere to tax laws. The main goals of the FTA are to improve the UAE’s financial stability and support its economic growth.

    By creating a fair and transparent tax system, the FTA helps to build a strong foundation for a sustainable and diversified economy. The FTA also provides guidance and support to taxpayers. It helps them understand their obligations and makes it easier to comply with tax regulations. Through its efforts, the FTA plays an important role in the development and prosperity of the UAE. In this blog, Shuraa Tax will help you to know more about the Federal Tax Authority UAE.

    What is the Federal Tax Authority UAE?

    The Federal Tax Authority UAE (FTA) is the government entity responsible for managing, collecting, and enforcing federal taxes and related fines. It also handles the distribution of tax-generated revenues and oversees the application of tax-related procedures nationwide. The FTA was established under Federal Law by Decree No. 13 of 2016.

    How the Taxation System Works in Dubai?

    Dubai, as part of the United Arab Emirates (UAE), follows the federal taxation system established by the Federal Tax Authority (FTA). The main types of taxes implemented are Value-Added Tax (VAT) and Excise Tax. Here’s a brief overview of how the system works:

    Value-Added Tax (VAT)

    • The standard rate is 5%.
    • VAT applies to most goods and services, with some exceptions, such as healthcare, education, and certain financial services.
    • Businesses collect VAT from consumers on behalf of the government and remit it to the FTA. Businesses can also claim credits for the VAT paid on their purchases, ensuring tax is paid only on the value added at each stage of production and distribution.

    Excise Tax

    • The excise tax was introduced in October 2017.
    • Rates vary depending on the product, typically 50% on sugary drinks and 100% on tobacco and energy drinks.
    • This tax applies to products harmful to human health or the environment.
    • Excise tax is levied at the point of import or production, and businesses pass this cost on to consumers.

    Corporate Tax

    Like the rest of the UAE, Dubai does not impose corporate tax on most businesses. However, the UAE government has announced plans to introduce a federal corporate tax starting in 2023. Companies operating in Dubai’s many free zones often benefit from tax exemptions, including those from corporate tax, customs duties, and import/export taxes.

    Compliance and Filing

    • Businesses with an annual turnover above a certain threshold must register for VAT and excise tax. Registered businesses must file periodic tax returns with the FTA, detailing their tax collected and paid.

    Overall, Dubai’s taxation system is designed to be straightforward and business friendly. It focuses on indirect taxes like VAT and excise tax while maintaining a tax-free environment for personal income and most corporate profits.

    What is VAT Return in the UAE?

    At the end of each tax period, VAT-registered businesses in the UAE must submit a VAT return to the Federal Tax Authority (FTA). This VAT return summarises the total value of the supplies and purchases made during that tax period and calculates the business’s VAT liability.

    The VAT liability is determined by the difference between the output tax (VAT charged on sales of goods and services) and the input tax (VAT paid on purchases) for that period. If the output tax exceeds the input tax.

    The business must pay the difference to the FTA. Conversely, if the input tax exceeds the output tax, the business will have excess input tax, which can be carried forward and set off against future VAT liabilities.

    How Do I Pay FTA Tax Online?

    Once your business is registered with the Federal Tax Authority UAE (FTA) online portal, you can pay your due taxes using several convenient options available on the portal. To avoid penalties, ensure you pay the total amount of tax before the due date. Payment methods include:

    • e-Dirham or credit card
    • Local bank transfer
    • International bank transfer

    How Much is the VAT Rate in the UAE?

    The VAT rate in the UAE is 5%, applicable to most products and services. VAT-registered businesses in the UAE charge and pay this 5% VAT. While most supplies are subject to the standard 5% rate, certain products and services and specific types of supplies may be classified as exempt or zero-rated.

    How Do I Contact the FTA?

    The Federal Tax Authority (FTA) encourages inquiries and requests through multiple communication channels. You can reach the FTA using any of the following methods:

    • Dial 600599994 to speak with an agent to assist you with your query or request.
    • Email info@tax.gov.ae and typically receive a reply within 2 business days.
    • Visit the FTA support centre during working days/hours at the Emirates Property Investment Company Building, P.O. Box 2440, Abu Dhabi, UAE.

    How Shuraa Tax can help you with Federal Tax Authority UAE

    Shuraa Tax is a leading expert in the Federal Tax Authority UAE, specialising in providing VAT refund services to businesses and business tourists across the UAE. Our team helps companies identify eligible expenses and prepares the necessary documentation for the FTA.

    The tax regulations can be confusing. Contact us today at +971508912062 or info@shuraatax.com to learn more about how we can assist with your VAT refund needs.

  • How to Claim VAT Refund in UAE 2026?

    How to Claim VAT Refund in UAE 2026?

    You can reclaim 85% of the VAT you paid through the VAT Refund in Dubai and the UAE. Importantly, this process does not incur the AED 4.80 fee per Tax-Free Dubai Tag. Furthermore, the VAT Refund Procedure automatically calculates the total refund amount, which helps ease the process for travellers and businesses. Overall, this scheme is designed to make it easier for visitors and residents to recover a significant portion of their expenses.

    Moreover, understanding the intricacies of this procedure can maximise your refund potential and ensure compliance with UAE regulations. In this blog, Shuraa Tax will provide a comprehensive guide to claiming your VAT refund in the UAE for 2026.

    From the eligibility criteria and documentation requirements to the step-by-step process of filing your claim. Stay informed and fully utilise the VAT Refund Scheme to recover your expenses effectively.

    What is VAT?

    Dubai VAT (Value Added Tax) is a 5% consumption tax introduced in the UAE on January 1, 2018, and is applied to most goods and services at every stage of production or distribution as part of the country’s move to diversify revenue beyond oil.

    While many items fall under the standard rate, some, like exports and international transportation, are zero-rated, and others, including certain financial services and residential properties, are exempt. Businesses must register for VAT if their taxable supplies and imports exceed AED 375,000 annually, with voluntary registration available from AED 187,500, making VAT a key component of building a more sustainable and stable economic model for the UAE.

    How to Claim a VAT Refund in UAE for Tourists?

    Tourists can claim a VAT Refund in UAE through a system developed by the Federal Tax Authority (FTA) in collaboration with global operator Planet. The Planet VAT Refund system is fully automated, allowing tourists to get their VAT refunds quickly. To use this service, tourists must shop at one of the 13,800.

    It can also participate in retailers and request a Tax-Free tag when purchasing. This electronic system connects various entry and exits points across the UAE. It includes 13 airports, land borders, and seaports.

    When departing from the UAE, tourists can visit a refund kiosk at the airport, border, or port and present their purchases for a refund. This will help them receive their VAT refund. This efficient process ensures that tourists can quickly recover the VAT they paid on their purchases.

    Related Insights: VAT Refund Dubai for Tourists

    Eligibility Criteria for VAT Refund

    If you’re visiting the UAE and planning to claim a VAT refund before you fly out, here’s what actually makes you eligible. These are the rules tourists must meet:

    1. You Must Be a Visitor, not a Resident

    Only genuine tourists can claim a refund.

    • If you don’t live in the UAE, you’re good to go.
    • GCC nationals can also claim a refund, provided they are not UAE residents.
    • UAE nationals who live abroad for studies may not always qualify; it depends on their residency status.

    2. You Must Be 18 or Older

    The VAT refund system is meant for adult travellers. Anyone below 18 or anyone working as crew on flights or ships leaving the UAE cannot apply.

    3. The Shop Must Be Registered in the Tourist Refund System

    Not every store in the UAE offers VAT refunds. Your purchases must be from a retailer that officially participates in the Tax Refund for Tourists Scheme. Look for the sign at the store or ask before you buy it.

    4. Minimum Spend Rule: AED 250

    To submit a VAT refund claim, your total bill must be AED 250 or more from participating retailers.

    5. Items Must Leave the UAE With You

    You can’t claim a refund on products you already used in the UAE.
    This means:

    • The goods must be unused.
    • They must be with you at the airport when you depart.
    • Some items are never eligible, including vehicles, boats, aircraft, services, and anything you’re not physically carrying when leaving.

    How to Request a VAT Refund in Dubai, UAE  

    To request and claim a VAT Refund in UAE, log in to the EmaraTax portal and request a VAT Refund form. Fill in the necessary details on the form and submit the required documents. Following these steps will help you request a VAT refund in the UAE:

    1: Sign in to EmaraTax

    • Access your EmaraTax account using your login credentials or UAE Pass.
    • If you do not have an EmaraTax account, click the signup button to create one.
    • Upon successful login. You will be directed to your User Dashboard.

        2: Request the VAT Refund form

        Request the VAT Refund form
        • Choose the user type as Taxable Person.
        • Then click on the proceed button to access the Home page by clicking the View button.
        • You can select ‘Tax Agents’, ‘ Tax Agencies’, and ‘Special Refunds’ if applicable.
        • Direct to the VAT Module in the left sidebar.
              click on VAT
              • Click on “New” to create a new VAT Refund Request. You can view your previous VAT 311 refund requests.
              • Use the ellipsis icon to edit the Refund request.
              • Initiate your refund by clicking the “New Refund Request” button.
              • Confirm your understanding of the instructions and guidelines by clicking ‘Next’.
              • Initiate the Refund request process by clicking on the Start button.
                      initiate vat refund by clicking new refund request button

                      3: Fill in the necessary VAT Refund in UAE

                      • Verify your bank details before submitting the form.
                      • Enter the refund amount, ensuring it does not exceed the “Excess Refundable VAT Amount.”
                      • Click on ‘Add Supporting Details’ to view the corresponding VAT refund.
                      • Tap on the download button to download the template. Fill it out.
                      • Then upload the completed template.
                              tap on the download button to download the template
                              • Use the edit button to enter contact information and VAT supplies.
                              • Click on the add button to upload the required document.
                              • It will turn green upon successful upload.
                                  upload bank details
                                  • Click the “Add Transaction” button to input transaction details.
                                  • Then click “Add Transaction” to confirm.
                                    • Use the ‘Save and Back’ button to save your progress.
                                    • Click ‘Next’ to proceed to the completed Refund Request. You can review it before submission.
                                    • Review each section by clicking on the respective step.

                                        After filling out the VAT refund form. Mark the checkbox to confirm your agreement with the terms and conditions before submitting it using the ‘Submit’ button. Make sure to note down the application number provided upon submission for future reference.

                                        Once successfully submitted, you can conveniently access and manage your refund request. This process makes sure that your VAT refund application is processed efficiently and by UAE tax regulations, allowing you to track its progress and manage any further actions as needed.

                                        Documents Required for Claiming VAT Refund in UAE

                                        The documents required for claiming a VAT Refund in UAE include:

                                        • Top five tax invoices for outputs, sales, and other transactions.
                                        • Supporting evidence for excess credit refunds or erroneous payments.
                                        • Top five tax invoices for standard-rated purchases.
                                        • Bank account validation letter (for foreign banks).
                                        • Top five tax invoices for untaxed sales (with export evidence if applicable).

                                                Steps to Update the Bank Details in VAT Refund Request

                                                To update bank details in your VAT refund request:

                                                • Follow the initial steps for applying for a VAT refund on the EmaraTax dashboard up to Step
                                                • Identify the application entry marked with the status ‘Payment Failed’.
                                                • Click on the ellipsis (…) and choose the ‘Update Bank Details’ option.
                                                • Select “Enable Editing” to make the bank details section editable.
                                                      update bank details
                                                      • Enter all required bank details.
                                                      • Upload the necessary document.
                                                      • Click the “Next Step” button to proceed.
                                                      • Follow the same application steps as when applying for a VAT refund on EmaraTax.

                                                            VAT Refunds for Non-Tax Residents in the UAE

                                                            VAT refunds for non-tax residents of the UAE are available at Abu Dhabi International Airport. The UAE Federal Tax Authority announced this initiative on November 18, 2018. Current regulations allow GCC nationals and other non-residents of the UAE to benefit from Tax-Free Shopping.

                                                            This includes purchasing goods in the UAE for export, subject to specific limits and conditions. Customers who comply with regional regulations and authenticate their purchases may qualify for refunds on eligible goods.

                                                            Process of VAT Refund for Non-Tax Residents in the UAE

                                                            The process of VAT Refund for Non-Tax Residents in the UAE is as follows:

                                                            • Present a valid passport to make a tax-free purchase as a tourist.
                                                            • Shop employees record tourist information using the system.
                                                            • Affix the Tax-Free sticker to the back of the sales receipt.
                                                            • Visitors must authenticate the purchase at the airport, where a Tax-Free digital form has been prepared.

                                                                  What is the Refund Period?

                                                                  You must validate your tax-free tag within 90 days from the date of purchase. For example, a form issued on January 1 remains valid until April 1. Kindly validate within this period to avoid the expiration of the Tax-Free tag, which will make you ineligible to claim the VAT refund.

                                                                  Collecting Your VAT Refund in UAE

                                                                  To collect your VAT refund in UAE, follow these steps:

                                                                  • Bring the items and the receipt to the airport with you.
                                                                  • Visit a validation station where your purchases and receipts will be verified.
                                                                  • Choose your preferred refund method. You may undergo a secondary validation check and must present your goods for inspection.
                                                                  • Each traveller can receive a maximum of 10,000 AED in cash for cash refunds. Amounts exceeding this limit must be refunded via credit or debit card.

                                                                        Terms and Conditions for VAT Refund

                                                                        To claim a VAT refund:

                                                                        • You must be at least 18 years old and not a UAE resident.
                                                                        • You must enter the UAE with a tourist visa.
                                                                        • Have your tax invoice, tax-free tags, and purchased items ready if requested by Planet staff.
                                                                            • Validate your tax-free transactions within 90 days of receiving the tax invoice before leaving the UAE.
                                                                            • Retailers must be registered with the tourist refund scheme.
                                                                            • You can request a refund within one year of validating your tax-free transactions for export. With a maximum cash refund limit of AED 35,000.
                                                                            • VAT refunds apply only to items under the Tourist Refund Scheme.
                                                                            • The minimum purchase amount eligible for a refund is AED 250.
                                                                            • Ensure purchased items are not consumed fully or partially while in the UAE.
                                                                            • Perishable items used in the UAE.
                                                                                        1. Services.
                                                                                        2. Items used within the UAE are not in the original packaging.
                                                                                        3. Items not in possession upon departure.
                                                                                        4. Motor vehicles, watercraft, and aeroplanes.
                                                                                        5. Internet purchases.

                                                                                        Goods For Which VAT is Not Refundable Include:

                                                                                        • Products consumed, either wholly or partially, within the UAE.
                                                                                        • Items such as cars, boats, airplanes, and other goods intended solely for use within the UAE, are left behind by tourists before departing the country.

                                                                                          VAT Refund Point Locations in the UAE

                                                                                          VAT refund points are available at various locations across the UAE when exiting the country, including airports, seaports, and land borders. Visit Planet’s self-service kiosks at the following locations:

                                                                                          Seaports

                                                                                          • Zayed Port, Abu Dhabi
                                                                                          • Port Rashid, Dubai

                                                                                            Airports

                                                                                            • Dubai Airport (Terminals 1, 2, 3, and 3 Business)
                                                                                            • Abu Dhabi Airport (common area between all terminals)
                                                                                            • Al Maktoum Airport
                                                                                            • Ras Al Khaimah Airport
                                                                                            • Sharjah Airport
                                                                                            • Al Ain Airport

                                                                                                      Land Borders

                                                                                                      • Hatta (border with Oman)
                                                                                                      • Al Ain (border with Oman)
                                                                                                      • Al Ghuwaifat (border with Saudi Arabia)

                                                                                                          VAT Refund Services in UAE with Shuraa Tax

                                                                                                          Shuraa Tax is one of the experienced VAT consultants in Dubai. This focuses on providing VAT refund services to businesses and business tourists across the UAE. Our team assists companies in identifying eligible expenses and preparing the required documentation for VAT refund claims.

                                                                                                          Claiming a VAT refund can often be intricate and time-consuming, but with our expertise, businesses can be assured of a streamlined and accurate process. Contact us today at +971508912062 or info@shuraatax.com to learn more about how we can help with your VAT refund needs.

                                                                                                          Frequently Aksed Questions

                                                                                                          Q1. When Should Validation be Done?

                                                                                                          You must validate your tax-free tags within 90 days of receiving them. Additionally, you must depart from the UAE within 6 hours of validation. Failure to do so will result in the validation of approval being cancelled, requiring you to restart the process.

                                                                                                          Q2. Who Can Validate the Process?

                                                                                                          Only the individual whose name appears on the registered passport or GCC national identity card can initiate or complete the validation process. No third party is permitted to do this on their behalf.

                                                                                                          Q3. What if I Don’t Receive the Refund in 9 Days?

                                                                                                          If you have not received your refund within nine calendar days, it is advisable to contact your card issuer or bank promptly to inquire about its status.

                                                                                                          Q4. Which Cards Can Receive Refunds?

                                                                                                          Refunds can be credited to Visa, MasterCard, American Express, and UnionPay cards. Refunds are typically processed in the local currency (AED), with the exchange rate determined by your bank or card issuer.

                                                                                                          Q5. How to Claim a VAT Refund in the UAE for a Business?

                                                                                                          Businesses registered for VAT in the UAE can claim refunds through the FTA (Federal Tax Authority) portal.

                                                                                                          Steps:

                                                                                                          1. Log in to your FTA account (eservices.tax.gov.ae).
                                                                                                          2. Go to VAT → VAT Refunds → VAT Refund Request.
                                                                                                          3. Fill out the VAT Refund Form 311.
                                                                                                          4. Upload supporting documents (VAT returns, tax invoices, audit files if needed).
                                                                                                          5. Submit the request and wait for FTA approval.
                                                                                                          6. Once approved, the refund is transferred to your registered bank account.

                                                                                                          Q6. How to Claim a VAT Refund in UAE for Tourists?

                                                                                                          Tourists can claim VAT refunds on eligible purchases made from retailers participating in the Planet Tax Refund system.

                                                                                                          Steps:

                                                                                                          1. Shop at stores with the “Tax Free Shopping” logo.
                                                                                                          2. Ask the cashier to generate a Tax-Free Tag using your passport.
                                                                                                          3. Before departure, go to the Planet kiosk at the airport, border, or port.
                                                                                                          4. Scan your passport and receipts.
                                                                                                          5. Choose a refund method: cash or credit/debit card.
                                                                                                          6. Tourists must export the goods within 90 days of purchase.

                                                                                                          Q7. How to Claim VAT Refund in UAE?

                                                                                                          VAT refunds depend on whether you are a business, a tourist, or engaged in specific activities (e.g., imports, special cases).

                                                                                                          General process:

                                                                                                          • Businesses: File refund via FTA portal (Form 311).
                                                                                                          • Tourists: Claim via Planet kiosks during departure.
                                                                                                          • Special categories (e.g., diplomats, mission offices): Apply through dedicated FTA procedures.

                                                                                                          Q8. How to Get a Tax Refund at Dubai Airport?

                                                                                                          To claim VAT refund at Dubai Airport as a tourist:

                                                                                                          1. Keep the purchased goods with you (unused).
                                                                                                          2. Go to the Planet Tax-Free kiosk before checking in.
                                                                                                          3. Scan your passport and receipts.
                                                                                                          4. Present goods for verification if asked.
                                                                                                          5. Choose a refund via cash or card.
                                                                                                          6. Cash refunds have a limit; higher amounts are processed via card.

                                                                                                          Q9. How to Claim VAT Refund for a Company in UAE?

                                                                                                          Companies can claim refunds on input VAT that exceeds their output VAT.

                                                                                                          Steps:

                                                                                                          1. Ensure that VAT return filing is complete and accurate.
                                                                                                          2. Log in to the FTA portal.
                                                                                                          3. Submit a VAT Refund Form 311.
                                                                                                          4. Provide IBAN letters, bank details, and supporting invoices.
                                                                                                          5. Wait for FTA review and approval.

                                                                                                          If the FTA requests clarification, respond promptly to avoid delays.

                                                                                                          Q10. How to Claim VAT Refund in the UAE for Imports?

                                                                                                          If businesses pay VAT at customs for imports, they can reclaim it through their VAT return.

                                                                                                          Steps:

                                                                                                          1. Confirm that your Import Declaration is linked to your TRN.
                                                                                                          2. Check the VAT amount in Box 6 of your VAT return (Import VAT).
                                                                                                          3. Report the same VAT amount as recoverable input tax in Box 10.
                                                                                                          4. Submit a return; the import VAT is automatically refunded or adjusted against dues.

                                                                                                          If the TRN is not linked to customs, you must correct it through FTA before claiming.

                                                                                                          Q11. How long do I have to claim my VAT refund in the UAE?

                                                                                                          You have 90 days from the date of purchase to validate your Tax-Free tag and start the refund process.

                                                                                                          Q12. What happens if I don’t validate my Tax-Free tag within 90 days?

                                                                                                          Your Tax-Free tag automatically expires, and you will no longer be eligible to claim a VAT refund for that purchase.

                                                                                                          Q13. Can you give an example of the 90-day validity period?

                                                                                                          Yes. If your Tax-Free form was issued on January 1, it will remain valid until April 1. After this date, the refund cannot be processed.

                                                                                                          Q14. Can I extend the 90-day VAT refund period?

                                                                                                          No. 90 days are fixed and cannot be extended under any circumstances.

                                                                                                          Q15. What if I leave the UAE before validating my Tax-Free tag?

                                                                                                          If you fail to validate it at an official Tax-Free kiosk before departure, you lose eligibility for the refund, no exceptions.

                                                                                                          Q16. Does the 90-day period apply to all purchases?

                                                                                                          Yes, the rule applies to every eligible Tax-Free purchase, regardless of value or store.

                                                                                                          Q17. How Much VAT Do Tourists Actually Get Back?

                                                                                                          When claiming VAT refunds in the UAE, tourists don’t receive the full VAT amount; they get up to 87% of the tax they paid. A small processing fee of AED 4.80 is charged for every tax-free tag linked to a receipt. There’s also a limit on cash refunds, capped at AED 35,000.

                                                                                                          Anything beyond that can still be refunded but only through cards or digital methods. Tourists can choose how they want to receive their refund, cash (within the limit), credit/debit card, or digital wallets like WeChat, offering flexibility based on what’s most convenient for them.

                                                                                                        • A Complete Guide to Corporate Tax Planning in Dubai

                                                                                                          A Complete Guide to Corporate Tax Planning in Dubai

                                                                                                          The new corporate tax in UAE means changes for your business. Get ready! Your systems, tech, processes, and staff may need adjustments. Good planning services can help. Make a strategy for corporate tax planning and management in Dubai. Stay legal and cut your tax bill.

                                                                                                          Intelligent tax planning lets you invest wisely and grow your wealth. It also helps the economy and avoids legal headaches. Corporate tax management lets you manage your spending, investments, and tax savings. This blog, by Shuraa Tax, will help you understand Corporate Tax Planning in Dubai. Continue to read.

                                                                                                          Dubai Steps into a New Tax Era

                                                                                                          Starting June 1, 2023, the UAE Corporate Tax system will impact businesses nationwide. The tax rates for UAE companies range from 0 to 9%, depending on their taxable income.

                                                                                                          To Advocate tax transparency and curb harmful tax practices, the UAE introduced Federal Decree-Law No. 47 of 2022 on taxing Corporations and Businesses. This law helps set the stage for implementing a Federal Corporate Tax in the UAE, effective for financial years beginning on or after the launch date.

                                                                                                          Corporate tax mainly focuses on collecting taxes on net income or profit. This tax introduction aligns with the UAE’s strategic goals, hastens development and transformation, and upholds its commitment to international standards.

                                                                                                          Understanding Corporate Tax and Its Impact on Businesses

                                                                                                          Corporate Tax applies to different groups, like companies based in the UAE, individuals doing business there, and foreign companies with a setup in the UAE.

                                                                                                          If you are a UAE-based company, like an LLC, PSC, or PJSC, you are subject to Corporate Tax because you are seen as a resident entity. Foreign companies get taxed if they are “managed and controlled” from within the UAE.

                                                                                                          The Residents pay taxes on income earned worldwide. The non-residents only pay on income from their UAE setup or earnings sourced in the UAE. Tax rates are 0% for income up to AED 375,000 and 9% for anything above that.

                                                                                                          Who’s Exempt from UAE Corporate Tax Law:

                                                                                                          1. Government Entities and Controlled Entities specified in a Cabinet Decision are exempt from Corporate Tax.
                                                                                                          1. Extractive Businesses and Non-Extractive Natural Resource Businesses are also exempt.
                                                                                                          1. Businesses involved in extracting UAE’s natural resources and certain non-extractive activities subject to Emirate-level taxation are excluded from UAE Corporate Tax, provided they meet specific conditions.
                                                                                                          1. Several entities in the UAE are exempt from Corporate Tax, including the Federal and Emirate Governments, wholly Government-owned companies, businesses involved in UAE natural resource extraction, Public Benefit Entities, Investment Funds, pension or social security funds, and certain UAE juridical persons wholly owned by exempted entities.

                                                                                                          Benefits of Corporate Tax Planning Services in UAE

                                                                                                          The benefits of Corporate Tax Planning Services in UAE are as follows:

                                                                                                          1. Mitigate tax risks effectively

                                                                                                          Tax planning services can help identify and mitigate potential risks by analysing your financial situation and understanding tax laws, make sure your business operates within legal boundaries.

                                                                                                          2. Optimise your tax burden while complying with legal and regulatory obligations

                                                                                                          Through careful planning and strategic tax management, tax planning services can help minimise your tax liabilities while ensuring compliance with all applicable laws and regulations, thus maximising your after-tax profits.

                                                                                                          3. Develop strategies for corporate tax transactions

                                                                                                          Tax planning services can create customised tax strategies to your business’s unique needs and objectives, whether minimising tax liabilities during mergers and acquisitions or optimising tax structures for international transactions.

                                                                                                          4. Submit tax returns with precision and punctuality

                                                                                                          With tax preparation and compliance expertise, tax planning services can make sure that your tax returns are accurately prepared and filed on time, helping you avoid penalties and fines associated with lateness or filings.

                                                                                                          5. Use long-term tax advantages

                                                                                                          Tax planning services can help your business maximise its tax advantages over time by proactively identifying and capitalising on long-term tax-saving opportunities. This can lead to greater financial stability and growth in the future.

                                                                                                          Compliance with UAE Corporate Tax Law

                                                                                                          It can be difficult to deal with UAE Corporate Tax law, but with the right knowledge and strategies, your business can boom while staying compliant.

                                                                                                          Tax Registration and Deregistration

                                                                                                          • Assess your tax position and review financial records.
                                                                                                          • Consult tax Shuraa Tax professionals for guidance.

                                                                                                          Tax Returns and Clarifications

                                                                                                          • Submit accurate tax returns to comply with the law.
                                                                                                          • Maintain detailed records and make better use of depreciation for tax benefits.

                                                                                                          Violations and Penalties

                                                                                                          •  Invest in proper tax planning strategies to avoid penalties.
                                                                                                          • Consider maximising deductions and utilising tax-free zones.

                                                                                                          Anti-Abuse Rules

                                                                                                          • Stay informed about restrictions on tax planning strategies.
                                                                                                          • Work with tax professionals to comply.

                                                                                                          Transitional Rules

                                                                                                          • Understand transitional rules to adapt to new regulations.
                                                                                                          • Stay updated on legislative changes and consult experts for smooth transitions.

                                                                                                          Top-notch Corporate Tax Services in Dubai

                                                                                                          Regarding reliable and highly skilled tax-related services for companies in Dubai, Shuraa Tax stands out as a trusted name with a proven track record. Backed by a team of trained consultants in tax accountants and consultants, Shuraa Tax offers a wide range of tax-related services for corporations, including:

                                                                                                          • Tax Planning and Compliance: Customized tax planning strategies to optimise tax outcomes while ensuring compliance with UAE tax regulations.
                                                                                                          • VAT Advice and Compliance: Expert guidance on VAT implications, including compliance requirements and effective VAT management for businesses.
                                                                                                          • Tax Audit Assistance: Professional support and representation during tax audits, maintaining seamless communication with tax authorities and providing thorough responses to audit-related inquiries.

                                                                                                          What services does Shuraa Tax provide?

                                                                                                          There are many services provided by Shuraa Tax:

                                                                                                          1. Accounting and Bookkeeping: Outsource your accounting and bookkeeping requirements to Shuraa Tax. We ensure compliance with the International Financial Reporting Standards and UAE regulations.
                                                                                                          1. VAT Consultancy Services: UAE businesses have been required to register for VAT since its implementation in 2018. Professionals like Shuraa Tax help with VAT registration, VAT reporting, and other advisory services.
                                                                                                          1. UAE Corporate Tax: With one of the lowest tax rates in the world, entrepreneurs in the UAE can benefit from services like corporate tax registration, filing and consultancy.
                                                                                                          1. Excise Tax Services: Entities involved in the trade, import, export, stockpiling, or production of goods that fall under the excise category must mandatorily register for and comply with Excise tax laws.
                                                                                                          1. ESR Services: Businesses belonging to certain sectors must be compliant with the Economic Substance Regulations (ESR), including ESR notification filing.
                                                                                                          1. Add-On Services: Shuraa Tax Consultants offers several add-on services, such as tax agency, payroll services, MIS reporting, compliance review, and more.

                                                                                                          Seek expert guidance from top corporate tax consultants in Dubai

                                                                                                          Dubai tax consultants’ services are key for achieving business objectives. Shuraa Tax can assist businesses in guaranteeing compliance with constantly developing regulations, financial capabilities, and strategic plans for sustained long-term success.

                                                                                                          As your business is in Dubai’s intricate corporate tax, partnering with a Tax consultant and professional tax advisor is an important step towards continued growth and financial well-being. Don’t hesitate to contact us today to access premier business marketing services; we are here to support you every step of the way. Get in touch today at +971508912062. You can also email us at info@shuraatax.com.

                                                                                                          FAQs

                                                                                                          Q1. What advantages does corporate tax planning offer in Dubai?

                                                                                                          Discover customised tax efficiency and saving tactics suited to your business requirements.

                                                                                                          Q2. How does corporate tax planning benefit my Dubai-based business?

                                                                                                          Corporate tax planning can streamline your tax framework and reduce tax burdens effectively.

                                                                                                          Q3. Why is corporate tax planning important in Dubai?

                                                                                                          It’s vital to adhere to tax laws and make more profits via efficient tax planning strategies.

                                                                                                        • How to Apply for Tax Registration Number (TRN) in UAE?

                                                                                                          How to Apply for Tax Registration Number (TRN) in UAE?

                                                                                                          Do you know the difference between VAT and TRN? And you look further to register yourself as a taxpayer? Don’t worry; Shuraa Tax has your back. Like you, many entrepreneurs in Dubai and investors have no clue about getting a Tax Registration Number or TRN in Dubai. If you are running a foreign-owned business, you must understand the importance of value-added tax, VAT, and TRN. 

                                                                                                          In Dubai, the VAT Registration process is essential for every business. This means getting a TRN number. It’s a 15-digit code that shows you’re registered and helps tax authorities keep track of your finances through your invoices. 

                                                                                                          What’s TRN? 

                                                                                                          TRN is for Tax Registration Number. The UAE’s federal tax authority uses a 15-digit code, FTA, in short form. Each business gets one TRN number, even if it has different parts or branches. 

                                                                                                          Remember, if you have a TRN number, you must include all your invoices, documents, and financial activities, such as VAT Returns Filing, Tax Invoices, Tax Credit notes, etc. Only businesses with a TRN certificate can add VAT charges for their customers. 

                                                                                                          Who Can Get a TRN in the UAE? 

                                                                                                          If the business operates in the UAE, it must follow the country’s rules and laws. They need to follow the VAT regulations too. To be eligible for VAT registration and a Tax Registration Number (TRN) in the UAE, businesses must meet specific revenue criteria outlined below: 

                                                                                                          1. For Voluntary Registration 

                                                                                                          For voluntary registration, you need to follow the points mentioned below: 

                                                                                                          • You can choose whether to register for VAT if your earnings are between 187,000 AED and 375,000 AED. 
                                                                                                          • If your business makes over 187,500 AED, you can sign up for VAT and get a TRN.  
                                                                                                          • If you earn less than 187,500 AED, you don’t have to bother with VAT registration.  

                                                                                                          2. For Mandatory Registration 

                                                                                                          For Mandatory Registration, you need to follow the points mentioned below: 

                                                                                                          • You must get a TRN if your business earns about 375,000 AED. 
                                                                                                          • If you expect to earn this much in the next month or have earned it in the past year, you must register for VAT to avoid fines. 

                                                                                                          How can the validity of TRN in the UAE be checked? 

                                                                                                          To verify your TRN in the UAE: 

                                                                                                          1. Go to the FTA website 
                                                                                                          2. Log in to the e-service portal 
                                                                                                          3. Click on “TRN Verification” at the top 
                                                                                                          4. Enter your TRN and click “validate” to check its validity 

                                                                                                          Documents Needed for TRN Application 

                                                                                                          To get a TRN for your business in the UAE, you’ll need to submit specific documents to the relevant department. A trusted tax consultancy specialist like Shuraa Tax can help in this process, making sure your timely registration is done. Here’s a list of required documents: 

                                                                                                          1. Company’s Memorandum of Association (MoA) 
                                                                                                          2. The company’s trade license 
                                                                                                          3. Import or export declarations 
                                                                                                          4. Company bank account details 
                                                                                                          5. Company’s turnover declaration letter 
                                                                                                          6. Company’s contact details and address 
                                                                                                          7. Emirates IDs of the shareholder/manager 
                                                                                                          8. Passport copies of the shareholder/manager 
                                                                                                          9. Last year’s income statement and bank details 
                                                                                                          10. Sample invoices from suppliers and customers 

                                                                                                          Verifying Your TRN Number 

                                                                                                          Businesses and individuals in the UAE can now register and validate their TRN numbers through the Federal Tax Authority’s online platform. Alternatively, professional tax consultants like Shuraa Tax can assist with TRN number verification. To verify your TRN number in the UAE, follow these steps: 

                                                                                                          1. Visit the FTA’s EmaraTax portal. 
                                                                                                          2. Find and click on the “TRN Verification” option in the menu on the right side of the page. 

                                                                                                          TRN Verification

                                                                                                          1. Enter your TRN number in the designated space. 
                                                                                                          2. Type the code displayed in the image. 
                                                                                                          3. Click “submit” to view your TRN verification status. 

                                                                                                          TRN verification status

                                                                                                          How to Get VAT Tax Registration Number in Dubai, UAE 

                                                                                                          Applying for a Tax Registration Number (TRN) in the UAE is mandatory for businesses exceeding the VAT threshold or planning to conduct taxable activities. The process involves registering with the Federal Tax Authority (FTA) through the EmaraTax portal. Below is a comprehensive guide to help you easily navigate the TRN registration Dubai process. 

                                                                                                          Steps to Apply for a TRN Tax Registration Number in the UAE 

                                                                                                          Step 1: Create an EmaraTax Account 

                                                                                                          • Visit the FTA website: Go to https://tax.gov.ae. 
                                                                                                          • To sign up for EmaraTax, click on the “Sign Up” button and provide your email address, mobile number, and other personal/business details. 
                                                                                                          • Activate your account: A confirmation email will be sent to your registered email address. Click the activation link to proceed. 

                                                                                                          This account is essential for managing all your tax-related services, including applying for your TRN Number UAE. 

                                                                                                          Step 2: Log in and Access the Dashboard 

                                                                                                          • Log in to your EmaraTax account using your credentials. 
                                                                                                          • Once inside, you will be directed to the EmaraTax dashboard, where all your tax activities are managed. 

                                                                                                          Step 3: Create a Taxable Person Profile 

                                                                                                          • Click on “Create Taxable Person”. 
                                                                                                          • Fill in all the required details: 
                                                                                                          • Legal entity name and trade name 
                                                                                                          • Trade license information 
                                                                                                          • Business activity type (commercial, professional, industrial, etc.) 
                                                                                                          • Contact information 
                                                                                                          • Authorised signatory details 
                                                                                                          • This profile will be used to apply for your TRN Tax Registration Number. 

                                                                                                          Step 4: Access the Taxable Person Account 

                                                                                                          • Once your profile is created, return to the dashboard. 
                                                                                                          • Click “View” beside your taxable person profile to manage the account or proceed with TRN registration in Dubai. 

                                                                                                          Step 5: Initiate VAT Registration 

                                                                                                          • Navigate to “Value Added Tax” in the menu. 
                                                                                                          • Select “Register” to begin your VAT application process. 

                                                                                                          Step 6: Fill Out the VAT Registration Form 

                                                                                                          Provide the following information in the online form: 

                                                                                                          • Business turnover for the last 12 months (must meet or exceed AED 375,000 for mandatory registration) 
                                                                                                          • Expected future turnover 
                                                                                                          • Import/export activity 
                                                                                                          • GCC business operations 
                                                                                                          • Bank account details 
                                                                                                          • Customs registration (if applicable) 

                                                                                                          Step 7: Upload Required Documents 

                                                                                                          Prepare and upload scanned copies of the following: 

                                                                                                          • Valid Trade License 
                                                                                                          • Memorandum of Association (MoA) or other legal formation documents 
                                                                                                          • Passport and Emirates ID copies of the owner/partners 
                                                                                                          • Proof of bank account (IBAN letter or bank statement) 
                                                                                                          • Sample invoices issued/received 
                                                                                                          • Income statements and financial records for past 12 months (if applicable) 

                                                                                                          Step 8: Review & Submit the Application 

                                                                                                          • Double-check all entered details and uploaded documents. 
                                                                                                          • Click “Submit” once you’ve confirmed everything is accurate and complete. 

                                                                                                          Step 9: Application Review by the FTA 

                                                                                                          • The FTA will review your VAT application. 
                                                                                                          • You may be asked to provide additional documents or clarifications. 
                                                                                                          • Upon approval, you will receive your VAT Registration Certificate, which includes your TRN number UAE. 

                                                                                                          Final Notes on TRN Registration in Dubai 

                                                                                                          • The TRN (Tax Registration Number) is a 15-digit number issued by the FTA to registered businesses for VAT purposes. 
                                                                                                          • Display your TRN Tax Registration Number on all tax invoices, credit notes, and VAT returns. 
                                                                                                          • Businesses must ensure timely registration to avoid fines and penalties. 

                                                                                                          What Happens After VAT Registration in the UAE? 

                                                                                                          Once you’ve successfully applied for VAT and submitted your documents through the EmaraTax platform, the Federal Tax Authority (FTA) initiates the review process. Here’s a step-by-step breakdown of what to expect after applying for your TRN registration Dubai. 

                                                                                                          1. FTA Review and Approval 

                                                                                                          • The FTA thoroughly examines your application, including all uploaded documents and declared business information. 
                                                                                                          • If your submission meets all requirements, the FTA will issue your Tax Registration Number (TRN)—a unique 15-digit identifier for VAT purposes in the UAE. 

                                                                                                          2. Issuance of the VAT Certificate 

                                                                                                          • You’ll receive an official notification via email once your application is approved. 
                                                                                                          • Log in to your EmaraTax account to download your VAT Certificate, which includes your: 
                                                                                                          • TRN number UAE 
                                                                                                          • Effective VAT registration date 
                                                                                                          • Legal business name and license details 

                                                                                                          This certificate is proof of successful TRN tax registration number issuance and must be displayed or submitted during any VAT-related process. 

                                                                                                          3. Understanding Your Tax Obligations 

                                                                                                          After receiving your Tax Registration Number UAE, your business is legally obligated to: 

                                                                                                          • Display the TRN on: 
                                                                                                          • All tax invoices and credit notes 
                                                                                                          • VAT returns 
                                                                                                          • Business correspondences, where applicable 
                                                                                                          • Maintain accurate financial records, including sales, expenses, and input/output VAT. 
                                                                                                          • File VAT returns quarterly or monthly (depending on your assigned tax period) via the EmaraTax portal. 
                                                                                                          • Pay any VAT liabilities by the due date to avoid penalties. 
                                                                                                             

                                                                                                          4. FTA Follow-ups and Communication 

                                                                                                          • The FTA may reach out through your EmaraTax account or email if they require: 
                                                                                                          • Clarification of submitted information 
                                                                                                          • Additional supporting documents 
                                                                                                          • Promptly respond to any communication to prevent delays in processing or possible rejection of your TRN application. 

                                                                                                          Common Mistakes to Avoid During TRN Registration in Dubai 

                                                                                                          Even though TRN registration Dubai is a digital process, minor errors can cause significant delays or even lead to rejections. Avoid the following common pitfalls: 

                                                                                                          1. Submitting Incomplete Applications 

                                                                                                          All mandatory fields must be completed. Double-check your application before submission to ensure no blanks or missing details. 

                                                                                                          2. Uploading Incorrect or Unsupported Document Formats 

                                                                                                          The FTA accepts formats like PDF, JPG, or PNG; files must be under 2 MB. Incorrect formats or oversized files will be rejected automatically. 

                                                                                                          3. Ignoring Eligibility Criteria 

                                                                                                          Before applying, make sure your business meets the mandatory (AED 375,000 turnover) or voluntary (AED 187,500) registration thresholds. 

                                                                                                          4. Providing Inaccurate or Mismatched Information 

                                                                                                          Ensure accuracy in your: 

                                                                                                          • Trade license number 
                                                                                                          • Bank account and IBAN 
                                                                                                          • Financial turnover 
                                                                                                          • Business name and contact details 

                                                                                                          Inconsistent data can result in application rejection or further scrutiny by the FTA. 

                                                                                                          5. Delaying Responses to FTA Requests 

                                                                                                          Timely responses are crucial. Ignoring FTA queries or taking too long to reply may cause application delays or lead to cancellation. 

                                                                                                          6. Poor Record-Keeping 

                                                                                                          Maintain clean, verifiable documentation of: 

                                                                                                          • Sales and purchase invoices 
                                                                                                          • VAT paid/charged 
                                                                                                          • Financial statements 

                                                                                                          Good record-keeping not only supports your TRN number UAE application but also ensures smooth audits and compliance checks. 

                                                                                                          Who Is Eligible to Get a TRN in the UAE? 

                                                                                                          Eligibility for a TRN in the UAE depends entirely on your business activities and meeting specific financial criteria. Any business engaged in taxable activities should register for a TRN if its annual turnover exceeds the defined threshold. 

                                                                                                          How Long Does It Take to Get a TRN Certificate in the UAE? 

                                                                                                          It takes about 20 business days to process your application and receive your Tax Registration Number (TRN) upon approval. However, the process may take longer if the FTA requires additional information. 

                                                                                                          Can I Register for VAT Using My Excise Tax Registration Number? 

                                                                                                          No, you cannot use your Excise Tax Registration Number to register for VAT. After reviewing and approving your registration, the Federal Tax Authority (FTA) will assign you a specific Tax Registration Number (TRN) for VAT purposes. However, if you have already registered for Excise Tax, the process might be faster since some profile-related information could be prepopulated.  

                                                                                                          VAT Help in Dubai, UAE 

                                                                                                          Shuraa Tax is one of the leading tax consultants in Dubai. Their experts are well-trained in simplifying your company’s tax matters. Our team of professionals, including tax experts, VAT consultants, accountants, and business advisors, supports you every step of the way. 

                                                                                                          With years of experience in their respective fields, they provide solutions to meet your business needs. If you’re looking for VAT services in Dubai, we offer a wide range of solutions, including audit, accounting, VAT registration, and more. Contact us at +971508912062 or info@shuraatax.com. 

                                                                                                          FAQs 

                                                                                                          Q1. What is the full form of TRN in the UAE? 

                                                                                                          The full form of TRN is Tax Registration Number. It is a unique 15-digit identifier issued by the UAE Federal Tax Authority (FTA) to individuals and businesses registered under VAT. A TRN number is essential for issuing VAT-compliant invoices, filing tax returns, and ensuring overall VAT compliance. 

                                                                                                          Q2. Who is required to apply for a TRN in the UAE? 

                                                                                                          Any business whose annual taxable supplies exceed AED 375,000 must register for VAT and obtain a TRN in the UAE. Companies with taxable supplies above AED 187,500 can voluntarily register for VAT and get a TRN. 

                                                                                                          Q3. What are the steps to apply for TRN registration in Dubai or across the UAE? 

                                                                                                          To apply for a TRN number in the UAE, follow these steps: 

                                                                                                          • Visit the [FTA Portal] 
                                                                                                          • Create an account and log in 
                                                                                                          • Fill out the VAT registration form with accurate business and financial details. 
                                                                                                          • Upload the required documents 
                                                                                                          • Apply for FTA review and approval 

                                                                                                          This is the standard TRN registration Dubai process, applicable across the UAE. 

                                                                                                          Q4. What documents are required for TRN registration in the UAE? 

                                                                                                          To complete your TRN application, you will need: 

                                                                                                          • Valid Trade License 
                                                                                                          • A passport copy of the business owner/partners 
                                                                                                          • Emirates ID 
                                                                                                          • Proof of business address 
                                                                                                          • Latest financial statements or revenue details 

                                                                                                          These documents help the Federal Tax Authority (FTA) assess your VAT eligibility. 

                                                                                                          Q5. How long does it take to get the TRN number after applying? 

                                                                                                          Typically, the FTA processes TRN applications within 20 business days. Once approved, your TRN tax registration number will be issued and shared through your registered account on the FTA portal. 

                                                                                                          Q6. How can I verify my TRN number in the UAE? 

                                                                                                          You can verify any TRN number UAE by visiting the official FTA website. Use the VAT verification tool, enter the TRN, and check its validity instantly. 

                                                                                                          Q7. Can I apply for a TRN online in the UAE? 

                                                                                                          Yes, the entire TRN registration process is conducted online through the FTA’s official portal. It’s a simple and efficient digital process accessible to all eligible businesses. 

                                                                                                          Q8. What should I do if my TRN application is rejected? 

                                                                                                          If your TRN application is rejected, carefully review the rejection message from the FTA. Correct any missing or inaccurate information, provide additional documentation, and resubmit your application. 

                                                                                                          Q9. What’s the difference between a TRN number and VAT number? 

                                                                                                          There is no difference between a TRN number and a VAT number in the UAE. They are interchangeable terms that refer to the same Tax Registration Number issued by the Federal Tax Authority for VAT-related purposes. 

                                                                                                          Q10. What is a Tax Registration Number in the UAE? 

                                                                                                          The Tax Registration Number (TRN) is a mandatory identifier for VAT-registered businesses in the UAE. It links your business to your VAT filings and requires you to issue tax invoices, claim input VAT, and maintain compliance. 

                                                                                                        • Best Accounting Firms in Dubai

                                                                                                          Best Accounting Firms in Dubai

                                                                                                          Navigating accounting challenges is no easy task for businesses, especially with the ever-evolving UAE tax regulations and payroll details. Small businesses often need help to keep up, and the costs can quickly increase. That’s why many turn to trusted accounting firms in Dubai for help.

                                                                                                          According to Shuraa Tax, it’s not uncommon for one out of every three companies in Dubai to seek external bookkeeping services. Outsourcing these tasks doesn’t just ensure compliance; it also empowers better financial decision-making. Among these firms, Shuraa Tax shines as a standout choice. If you’re curious to learn more about what sets them apart, keep reading this guide on the best accounting firms in Dubai.

                                                                                                          Audit in Dubai: Why It’s Crucial for Businesses and How to Choose the Right Firm

                                                                                                          As Dubai continues to rise as a global business hub, companies operating in the emirate are expected to maintain financial transparency, accuracy, and compliance with local laws and regulations. This is where audits play a vital role. Conducting regular audits in Dubai not only enhances financial credibility but also ensures legal compliance with the UAE Commercial Companies Law and various free zone regulations.

                                                                                                          Whether you’re a startup, SME, or multinational enterprise, partnering with a reliable accounting firm in Dubai can help streamline your audit process and align your financial operations with international standards.

                                                                                                          What is an Audit and Why is it Important?

                                                                                                          An audit is an independent examination of an organisation’s financial records, internal processes, and compliance with relevant regulations. The objective is to ensure the accuracy and reliability of financial statements, detect fraud, and verify compliance with applicable standards.

                                                                                                          Key Reasons for Conducting an Audit in Dubai:

                                                                                                          • Legal Requirement: Many free zones and the mainland mandate annual audits for business license renewal.
                                                                                                          • Transparency for Investors: Audits build investor confidence, which is crucial for raising capital or entering partnerships.
                                                                                                          • Risk Mitigation: Helps detect financial irregularities early and improves internal control systems.
                                                                                                          • Tax Compliance: With VAT and corporate tax now in place, audits ensure accurate tax reporting and help avoid penalties.

                                                                                                          Role of Accounting Firms in the Audit Process

                                                                                                          Professional accounting firms in UAE play an essential role in the audit process. These firms employ certified auditors and financial experts who utilise global standards, such as IFRS, to examine financial statements, generate audit reports, and provide financial insights.

                                                                                                          A qualified accounting firm Dubai can offer:

                                                                                                          Choosing from among the top accounting companies in Dubai ensures your business complies with legal obligations and maintains operational integrity.

                                                                                                          Choosing the Right Accounting Firm in Dubai

                                                                                                          Given the number of accounting companies in Dubai, selecting the right one for your audit needs can be overwhelming. Here are some tips:

                                                                                                          1. Check for Certification & Licensing

                                                                                                          Ensure the firm is registered with the relevant authorities, such as the UAE Ministry of Economy, and recognised by the free zone regulators.

                                                                                                          2. Industry Experience

                                                                                                          Top bookkeeping firms in Dubai and auditors with experience in your industry are better positioned to understand your unique business processes.

                                                                                                          3. Service Portfolio

                                                                                                          Apart from audits, look for firms that offer tax consultancy, VAT services, payroll processing, and accounting software integration for end-to-end support.

                                                                                                          4. Client Reputation

                                                                                                          Explore reviews, testimonials, and case studies to gauge a firm’s reliability. Leading firms often serve international clients and comply with global standards.

                                                                                                          Benefits of Hiring Top Tax Firms and Bookkeeping Firms in Dubai

                                                                                                          Working with top tax firms in Dubai offers added benefits beyond audits. These firms help you:

                                                                                                          • Prepare and file VAT and corporate tax returns
                                                                                                          • Maintain updated financial records
                                                                                                          • Ensure compliance with FTA (Federal Tax Authority) guidelines
                                                                                                          • Reduce tax liabilities through strategic planning

                                                                                                          Similarly, bookkeeping firms in Dubai play a pivotal role in maintaining daily financial transactions, reconciling bank statements, and ensuring audit readiness.

                                                                                                          Top 20 Audit Firms in Dubai, 2025

                                                                                                          The top 20 audits firms in Dubai are as follows:

                                                                                                          1. Shuraa Tax

                                                                                                          Shuraa Tax Consultants and Accountants, one of the best accounting firms in Dubai, offers various services to support your company’s financial needs. These services include maintaining accurate bookkeeping records, auditing financial statements, providing guidance on investment banking, navigating tax litigation, and staying updated on regulatory policies.

                                                                                                          Additionally, Shuraa’s tax consultants prioritise exceptional client service. In Dubai, Shuraa tax consultants, recognised among the top accounting firms in the UAE, assess your current tax situation for effective planning and oversee your company’s bookkeeping to ensure you always have the required records and registrations.

                                                                                                          Services offered by Shuraa Tax include:

                                                                                                          • Implementation of UAE VAT
                                                                                                          • Registration for UAE VAT
                                                                                                          • Tax agency services registered in the UAE
                                                                                                          • Business setup and tax advisory
                                                                                                          • Various other financial services

                                                                                                          2. A&A Associate LLC

                                                                                                          For accounting services in Dubai, consider A&A Associate LLC. With over 15 years of experience, their team of chartered accountants provides customised services to meet your needs. They offer a range of services, including bookkeeping, tax services, and internal audits.

                                                                                                          Their packages start at AED 999 per month, covering up to 50 monthly transactions and including free VAT and ESR assessments. A&A Associate LLC also provides a free consultation to help you determine if their services are the right fit for your business.

                                                                                                          3. Abdulla Al Mulla Auditing & Accounting (AM Audit)

                                                                                                          Established in 2016, AM Audit serves large corporations and SMEs with a comprehensive suite of accounting services, including financial accounting, payroll, and inventory management. They also offer an Accounting Software Service, which includes installing and supporting popular software packages like Sage, QuickBooks, and SAP.

                                                                                                          Clients can use the website’s live chat function to address any questions. Additionally, AM Audit provides a free information library on UAE tax rules, covering topics from VAT regulations to business laws across different zones.

                                                                                                          4. Aviaan Accounting

                                                                                                          Aviaan Accounting collaborates with multinational corporations across the US, Europe, the Middle East, and India, serving various industries, including retail, trading, oil & gas, construction, and healthcare. They offer a range of services, including basic bookkeeping, financial statement reconciliation, tax filing, and audit preparation. Additionally, Aviaan Accounting assists clients in setting up bookkeeping systems and using accounting software.

                                                                                                          They also conduct feasibility studies to help businesses assess the financial viability of new ventures. Their case studies highlight their success in transforming loss-making companies into profitable enterprises.

                                                                                                          5. BMS Auditing

                                                                                                          MBS Auditing, an international bookkeeping firm headquartered in Dubai, serves clients in diverse industries, including construction and financial services. Adhering to IFRS and GAAP guidelines, it utilises advanced bookkeeping software. Their comprehensive services comprise:

                                                                                                          • Audit services
                                                                                                          • Accounting services
                                                                                                          • VAT services
                                                                                                          • Corporate tax services
                                                                                                          • Excise tax services

                                                                                                          With customer support available 24/7, including weekends, they prioritise client satisfaction. Moreover, their website features an ‘Insights’ section offering free resources, including the latest regional business news and valuable accounting tips for companies.

                                                                                                          6. Creative Zone Tax & Accounting

                                                                                                          Creative Zone Tax & Accounting operates under the umbrella of Creative Zone, a Dubai-based formation specialist firm. Providing a plethora of financial reporting services, their offerings encompass:

                                                                                                          • Basic accounting and bookkeeping
                                                                                                          • VAT registrations
                                                                                                          • Tax filings
                                                                                                          • Company audits

                                                                                                          The standard accounting setup package has an initial fee of AED 1,500 for the first year, which is waived if you continue utilising their accounting services thereafter. Transparent pricing for various services is available online, enabling customers to select a tailored package based on their individual needs.

                                                                                                          7. Emirates Chartered Accountants Group (ECAG)

                                                                                                          Based in Dubai, ECAG boasts branches across the UAE, the UK, Bahrain, and India, with nearly two decades of operational experience. Specialising in serving SMEs across diverse sectors, its chartered accountants provide on-site visits on a weekly or monthly basis and offer daily online communication. Their comprehensive services encompass:

                                                                                                          • Accounting and financial reporting
                                                                                                          • Backlog accounting
                                                                                                          • Fixed asset management
                                                                                                          • Standard operating procedures
                                                                                                          • Inventory verification

                                                                                                          Renowned for its auditing prowess, ECAG offers both internal and external audits. Additionally, it extends its expertise to business setup assistance, including support for mergers and acquisitions.

                                                                                                          8. Hashtag Startup

                                                                                                          Hashtag Startup offers advisory services tailored for corporates and entrepreneurs, with accounting services being just one facet of its comprehensive offerings. Despite their relative portion, their accounting services effectively address most small business accounting requirements. Clients benefit from an online portal that enables access to accounting data and facilitates inquiries.

                                                                                                          Beyond fundamental accounting support, Hashtag Startup stands out for its licensing services. It provides expert guidance throughout the license registration process, encompassing industry-specific licenses to commercial licenses. Moreover, the company extends CFO services to assist clients in financial management.

                                                                                                          9. HLB HAMT

                                                                                                          Top accounting firms in Dubai often provide onsite bookkeeping services, and HLB HAMT is no exception, offering this option alongside online or cloud-based accounting solutions. Additionally, they help with accounting system setup and training.

                                                                                                          With a history dating back to 1999, HLB HAMT is a well-established firm in the UAE and a proud member of HLB International, a global advisory and accounting network. Their expertise spans various industries, including:

                                                                                                          • Logistics
                                                                                                          • Retail sector
                                                                                                          • Hospitality and healthcare
                                                                                                          • Manufacturing and distribution
                                                                                                          • Construction and real estate KGRN

                                                                                                          Among the array of accounting companies in Dubai, KGRN is a prominent choice. Established in the UAE in 2007, it boasts membership in Integra International, a network spanning 74 countries. KGRN’s comprehensive accounting services encompass:

                                                                                                          • Bookkeeping
                                                                                                          • Financial reporting and analysis
                                                                                                          • Compliance regulations
                                                                                                          • Tax filing

                                                                                                          Clients can leverage their cloud accounting service through the FinancialForce Accounting platform, which seamlessly integrates with the widely used Salesforce Platform.

                                                                                                          10. Charles & Darwish Associates

                                                                                                          Charles & Darwish Associates is a reputable accounting firm in Dubai, offering customised financial and tax solutions for businesses across various sectors. With a strong commitment to accuracy, compliance, and client satisfaction, the firm delivers end-to-end support in auditing, VAT consulting, tax planning, and financial advisory. Backed by a team of experienced professionals, Charles & Darwish helps businesses navigate the complexities of the UAE’s financial regulations with confidence and clarity.

                                                                                                          As a well-established accounting firm in Dubai, Charles & Darwish Associates ensures that every client receives personalised attention and strategic insights for optimal financial performance. From managing daily bookkeeping to advising on corporate tax structures, the firm stands out among accounting firms in the UAE for its reliability and results-driven approach.

                                                                                                          Core Services Offered by Charles & Darwish Associates:

                                                                                                          • Financial auditing and internal controls
                                                                                                          • UAE VAT registration and filing
                                                                                                          • Business tax advisory and planning
                                                                                                          • Full-service bookkeeping and payroll management
                                                                                                          • Risk analysis and compliance consulting
                                                                                                          • Business setup and financial structuring
                                                                                                          • Virtual CFO and strategic financial guidance

                                                                                                          11. Ernst & Young (EY)

                                                                                                          Ernst & Young, commonly known as EY, is a globally recognised professional services organisation and a top-tier accounting firm in Dubai. With decades of international expertise and a deep understanding of local markets, EY offers comprehensive financial solutions to help businesses grow, comply, and transform. Their services span across assurance, tax advisory, consulting, and strategy, empowering clients with data-driven insights and sustainable value.

                                                                                                          As a trusted accounting firm in Dubai, EY delivers specialised support in areas such as corporate tax planning, transfer pricing, business performance improvement, VAT compliance, and financial audits. Their Dubai office serves as a regional hub, supporting a wide spectrum of industries—from government and energy to real estate, technology, and financial services.

                                                                                                          Key Services Provided by Ernst & Young (EY):

                                                                                                          • Financial and statutory audits
                                                                                                          • Tax planning and advisory (corporate, VAT, transfer pricing)
                                                                                                          • Business setup and regulatory compliance
                                                                                                          • Risk management and internal controls
                                                                                                          • Mergers & acquisitions and transaction advisory
                                                                                                          • Sustainability and ESG consulting
                                                                                                          • Digital transformation and technology advisory

                                                                                                          EY’s commitment to quality, innovation, and integrity has positioned it among the top accounting firms in the UAE, trusted by global enterprises and local startups alike.

                                                                                                          12. Jitendra Chartered Accountants

                                                                                                          Jitendra Chartered Accountants (JCA) is a well-established and highly respected accounting firm in Dubai, offering expert financial, accounting, and tax consulting services customised for businesses of all sizes. With over two decades of experience in the UAE market, JCA has built a strong reputation for accuracy, compliance, and client-focused solutions.

                                                                                                          As a prominent accounting firm in Dubai, JCA assists clients with seamless VAT implementation, internal audits, financial restructuring, and company formation advisory. Their deep knowledge of UAE laws and regulations ensures that clients remain compliant while improving operational efficiency and financial transparency.

                                                                                                          Services Offered by Jitendra Chartered Accountants:

                                                                                                          • Financial audits and internal controls
                                                                                                          • VAT registration, filing, and compliance
                                                                                                          • Corporate tax advisory and planning
                                                                                                          • Bookkeeping and accounting services
                                                                                                          • Business setup and offshore company formation
                                                                                                          • Economic Substance Regulation (ESR) compliance
                                                                                                          • Anti-Money Laundering (AML) advisory

                                                                                                          Recognised among the reliable accounting firms in the UAE, Jitendra Chartered Accountants takes a proactive approach in guiding businesses through evolving tax frameworks and financial obligations, ensuring they stay competitive and compliant.

                                                                                                          13. Deloitt

                                                                                                          Deloitte is one of the “Big Four” professional services firms and a globally trusted accounting firm in Dubai, offering a full spectrum of financial, tax, risk, and advisory services to businesses across all industries. With a strong regional presence and a reputation for excellence, Deloitte supports clients in navigating complex regulatory landscapes while driving innovation and growth.

                                                                                                          As a premier accounting firm in Dubai, Deloitte combines global expertise with local market knowledge to deliver strategic insights, robust compliance, and forward-thinking solutions. Whether it’s corporate tax planning, VAT advisory services, or internal audits, Deloitte’s team of professionals ensures that every service is delivered with accuracy, efficiency, and integrity.

                                                                                                          Core Services Offered by Deloitte in Dubai:

                                                                                                          • Financial and statutory audits
                                                                                                          • Corporate tax advisory and UAE VAT compliance
                                                                                                          • Risk assessment and internal control development
                                                                                                          • Mergers & acquisitions and due diligence
                                                                                                          • Business performance and transformation consulting
                                                                                                          • Cybersecurity and technology advisory
                                                                                                          • ESG and sustainability services

                                                                                                          Deloitte’s commitment to quality and innovation has solidified its standing as a top accounting firm in Dubai, trusted by multinational corporations, government entities, and regional enterprises.

                                                                                                          14. KGRN Chartered Accountants

                                                                                                          KGRN Chartered Accountants is a reputable accounting firm in Dubai, recognised for delivering expert financial, tax, and business advisory services tailored to meet the diverse needs of clients across various industries. With a strong focus on regulatory compliance, client satisfaction, and financial accuracy, KGRN has positioned itself as a trusted partner for both startups and established businesses in the UAE.

                                                                                                          As a client-centric accounting firm in Dubai, KGRN offers personalised solutions that support strategic growth while ensuring adherence to local and international accounting standards. Their team of qualified professionals brings extensive knowledge in UAE VAT regulations, corporate taxation, and business structuring, enabling clients to operate efficiently and confidently.

                                                                                                          Key Services Offered by KGRN:

                                                                                                          • Accounting and bookkeeping services
                                                                                                          • VAT registration and compliance
                                                                                                          • Corporate and personal tax advisory
                                                                                                          • Audit and assurance services
                                                                                                          • Company formation and business setup
                                                                                                          • ESR (Economic Substance Regulations) and AML compliance
                                                                                                          • Virtual CFO services and financial consulting

                                                                                                          Recognised among the dependable accounting firms in the UAE, KGRN Chartered Accountants focuses on proactive planning and practical insights, helping businesses stay financially healthy and compliant with legal requirements in a competitive market.

                                                                                                          15. Farahat & Co

                                                                                                          Farahat & Co is a distinguished accounting firm in Dubai with over 35 years of industry experience, offering a wide range of financial, tax, and business advisory services. Known for its professionalism, transparency, and commitment to compliance, Farahat & Co serves a diverse clientele, including SMEs, multinational corporations, and government entities across the UAE.

                                                                                                          As a highly regarded accounting firm in Dubai, Farahat & Co provides end-to-end solutions, from auditing and bookkeeping to business setup and legal consulting. Their multidisciplinary team ensures that clients receive tailored advice aligned with the latest regulatory updates, enabling them to achieve financial clarity and long-term success.

                                                                                                          Core Services Provided by Farahat & Co:

                                                                                                          • External and internal audit services
                                                                                                          • VAT registration, filing, and compliance
                                                                                                          • Corporate tax advisory and structuring
                                                                                                          • Bookkeeping and payroll processing
                                                                                                          • Business incorporation and licensing
                                                                                                          • PRO and legal translation services
                                                                                                          • HR, recruitment, and employee outsourcing

                                                                                                          Farahat & Co stands out among the top accounting firms in the UAE for combining technical expertise with a deep understanding of local business practices, making it a trusted partner for companies looking to thrive in the Dubai market.

                                                                                                          16. EBS

                                                                                                          Emirates Business Setup (EBS) is a full-service accounting firm in Dubai, providing comprehensive business and financial solutions to entrepreneurs, SMEs, and corporations throughout the UAE. With a strong focus on accuracy, compliance, and strategic support, EBS simplifies complex financial processes and ensures businesses are structured for sustainable growth.

                                                                                                          EBS is more than just an accounting firm in Dubai—it acts as a strategic partner in helping clients manage VAT obligations, maintain precise bookkeeping, and navigate the UAE’s evolving tax laws. The firm’s expert consultants also guide business owners through licensing, company formation, and ongoing compliance requirements, making it a one-stop destination for business setup and financial management.

                                                                                                          Key Services Offered by EBS:

                                                                                                          • Accounting and bookkeeping services
                                                                                                          • VAT registration, advisory, and return filing
                                                                                                          • Corporate tax planning and compliance
                                                                                                          • Internal and external audit services
                                                                                                          • Business setup and PRO services
                                                                                                          • Company liquidation and restructuring
                                                                                                          • ESR and AML compliance consulting

                                                                                                          As a trusted accounting firm in Dubai, EBS combines financial expertise with business insight to support companies at every stage—from formation to expansion—ensuring compliance, clarity, and continued success.

                                                                                                          17. Emirates Chartered Accountants Group

                                                                                                          Emirates Chartered Accountants Group, commonly known as EmiratesCA, is a leading accounting firm in Dubai, offering world-class financial, audit, and business advisory services to a wide range of clients, from startups to multinational corporations. With over 18 years of experience in the UAE and GCC markets, EmiratesCA is recognised for its professionalism, compliance expertise, and client-centric approach.

                                                                                                          As a highly reputable accounting firm in Dubai, EmiratesCA is committed to helping businesses stay ahead of regulatory changes, maintain transparency in financial reporting, and make informed decisions. The firm’s team of certified auditors and consultants offers tailored solutions in tax, audit, accounting, and business consulting, making them a one-stop partner for comprehensive financial management.

                                                                                                          Key Services Offered by EmiratesCA:

                                                                                                          • Audit and assurance services
                                                                                                          • VAT registration and return filing
                                                                                                          • UAE corporate tax advisory
                                                                                                          • Accounting and bookkeeping services
                                                                                                          • Business setup in UAE free zones, mainland & offshore
                                                                                                          • ESR and UBO compliance services
                                                                                                          • Management consultancy and feasibility studies

                                                                                                          Recognised among the top accounting firms in the UAE, EmiratesCA empowers clients with financial clarity, regulatory confidence, and strategic insight, making it a reliable choice for businesses aiming to grow sustainably in the region.

                                                                                                          18. RBS Accounting Firms

                                                                                                          RBS Accounting Firms is a trusted accounting firm in Dubai delivering expert financial and business advisory solutions tailored to the needs of startups, SMEs, and large enterprises across the UAE. Known for its precision, transparency, and client-centric approach, RBS provides a comprehensive suite of services to help companies maintain regulatory compliance and achieve financial efficiency.

                                                                                                          As an experienced accounting firm in Dubai, RBS specialises in providing accurate bookkeeping, audit support, VAT advisory, and strategic tax planning. With a team of qualified professionals and deep local market knowledge, RBS empowers businesses to streamline their financial operations and make informed decisions with confidence.

                                                                                                          Core Services Offered by RBS Accounting Firms:

                                                                                                          • Bookkeeping and financial reporting
                                                                                                          • VAT registration and tax filing
                                                                                                          • Corporate tax planning and compliance
                                                                                                          • Internal and external audit services
                                                                                                          • Business setup and advisory in the UAE
                                                                                                          • AML, ESR, and UBO compliance consulting
                                                                                                          • Virtual CFO services and payroll management

                                                                                                          RBS stands out among the top accounting firms in the UAE for its dedication to delivering timely, accurate, and compliant financial solutions, making it the go-to partner for businesses looking to grow securely in Dubai’s dynamic business environment.

                                                                                                          19. KPMG

                                                                                                          KPMG is a globally recognised accounting firm in Dubai, known for its unmatched expertise in audit, tax, and advisory services. As part of the prestigious “Big Four,” KPMG provides advanced solutions that help businesses across all sectors stay compliant, optimise performance, and navigate complex financial challenges in the UAE.

                                                                                                          KPMG’s Dubai office combines global best practices with a deep understanding of regional regulations, making it a preferred partner for multinational corporations, government entities, and local businesses.

                                                                                                          Key Services:

                                                                                                          • Financial and statutory audits
                                                                                                          • UAE corporate tax and VAT advisory
                                                                                                          • Risk consulting and internal audits
                                                                                                          • Business transformation and performance improvement
                                                                                                          • ESG, sustainability, and technology consulting

                                                                                                          KPMG continues to set the standard for excellence among accounting firms in the UAE, offering forward-thinking strategies to help clients stay competitive and compliant.

                                                                                                          20. Grant Thornton

                                                                                                          Grant Thornton is a leading international accounting firm in Dubai, offering comprehensive assurance, tax, and advisory services to help dynamic businesses unlock their growth potential. With a strong presence in the UAE, Grant Thornton serves clients across various industries, combining personalised service with global expertise.

                                                                                                          Their approach is proactive and collaborative, enabling businesses to meet regulatory demands while identifying opportunities for operational and financial improvement.

                                                                                                          Core Services:

                                                                                                          • Audit and assurance
                                                                                                          • Corporate tax and VAT compliance
                                                                                                          • Business risk services and internal controls
                                                                                                          • Transaction advisory and M&A support
                                                                                                          • Strategic business consulting and restructuring

                                                                                                          Grant Thornton’s reputation as a trusted accounting firm in Dubai stems from its commitment to quality, innovation, and measurable business impact.

                                                                                                          Choose the Right Accounting Partner in Dubai

                                                                                                          Selecting the right accounting firm in Dubai is essential for maintaining financial transparency, ensuring compliance, and fostering sustainable growth. Whether you’re a startup, SME, or an established corporation, partnering with the right professionals can make a significant difference.

                                                                                                          With so many accounting companies in Dubai offering diverse services—from auditing and VAT consultation to bookkeeping and tax filing—businesses have a wide array of choices. However, opting for one of the top accounting companies in Dubai, such as Shuraa Tax, ensures that your financial matters are in the hands of trusted experts.

                                                                                                          Shuraa Tax stands out among accounting firms in UAE for its client-centric approach, proven expertise, and comprehensive service portfolio. From being a leading bookkeeping and accounting firm in Dubai to offering strategic tax advisory services as one of the top tax firms, Shuraa Tax is a reliable partner for all your accounting needs.

                                                                                                          Call: +(971) 44081900
                                                                                                          WhatsApp: +(971) 508912062
                                                                                                          Email: info@shuraatax.com

                                                                                                          Contact Us today for personalised assistance and experience why we’re a top accounting firm in Dubai, trusted by businesses across the region.

                                                                                                        • Difference Between Direct and Indirect Taxes

                                                                                                          Difference Between Direct and Indirect Taxes

                                                                                                          Direct taxes are paid by individuals or businesses directly to the government, while indirect taxes are levied on goods and services and paid by consumers. It’s crucial for eligible people to comply with the country’s tax laws and pay the applicable taxes. Understanding the distinction between Direct Tax and Indirect Tax is essential for taxpayers.

                                                                                                          Taxes serve as a significant revenue source for governments worldwide, collected in various forms such as income tax on salaries, sales tax on restaurant meals, toll fees for driving, or taxes on groceries at stores. As responsible citizens, we have a duty to fulfil our tax obligations and understand the different tax types we encounter. Broadly, taxes are categorised into Direct Taxes and Indirect Taxes. In this blog, Shuraa Tax will help clarify the differences between these two tax types.

                                                                                                          Understanding Taxes

                                                                                                          Taxes are compulsory financial charges or levies imposed by a government on individuals or entities to fund public expenditures and various governmental functions.  

                                                                                                          Most nations implement a tax system to finance public services, societal needs, and government operations. Taxes can be levied at a fixed percentage on personal income, or they may be progressive, increasing with higher income brackets.  

                                                                                                          Taxation is integral to a country’s economy, generating revenue for the government to invest in infrastructure, education, healthcare, public safety, and more. Additionally, taxes can shape economic behaviour by incentivising savings or investments through tax breaks and discouraging detrimental activities like smoking by imposing higher taxes on tobacco products. 

                                                                                                          In general, taxes can be categorised into two main types: 

                                                                                                          – Direct Taxes 

                                                                                                          – Indirect Taxes 

                                                                                                          Every tax is either direct or indirect. Taxation policies can vary widely between countries, making it essential for individuals and businesses to conduct thorough research, understand, and adhere to the best tax practices when earning income or running a business. 

                                                                                                          Understanding Direct and Indirect Taxes

                                                                                                          Differentiating between direct and indirect taxes is crucial as they each have distinct economic implications and impact individuals differently. Direct taxes directly influence a taxpayer’s disposable income, influencing their spending, saving, and investment choices. In contrast, indirect taxes can alter consumer behaviour by raising the prices of certain goods or services, potentially reducing their demand. 

                                                                                                          Direct Tax 

                                                                                                          Direct taxes are levies paid directly to the taxing authority by the taxpayer. For example, income tax is directly paid to the government by the taxpayer. Direct taxes cannot be shifted to another individual or entity. In most countries, the tax authority oversees all tax-related matters. 

                                                                                                          These taxes are generally based on an individual’s income or wealth; the tax amount is determined using a progressive tax system. This means higher-income individuals pay a higher percentage of their income in taxes. Common types of direct taxes found globally include income tax, property tax, and wealth tax. 

                                                                                                          Once the tax amount is calculated, the taxpayer is responsible for paying it to the government. Payment methods can vary, including electronic transfers, checks, or credit card payments. Failure to pay the owed tax can lead to penalties, interest charges, or legal actions. 

                                                                                                          Indirect Tax 

                                                                                                          Indirect taxes are levied on the consumption of goods and services. Unlike direct taxes, these taxes are not directly based on a person’s income. Instead, the taxpayer pays the tax indirectly as part of the purchase price of goods or services. For instance, when buying a candy bar, the price includes an indirect tax like a sales tax, which the store collects and forwards to the government. 

                                                                                                          Consumers often pay indirect taxes without realising it, as they are embedded in the prices of goods and services they purchase. Common examples of indirect taxes worldwide include sales tax, value-added tax (VAT), and excise duties. 

                                                                                                          Understanding these tax types is essential for individuals and businesses to manage their finances effectively and comply with tax regulations. 

                                                                                                          Direct Tax and Indirect Tax- Differentiation  

                                                                                                          Direct tax and Indirect tax are distinguished by their method of imposition and who ultimately shoulders the economic impact of the tax. Direct taxes are imposed on individuals or businesses based on their income, profits, or assets. In contrast, indirect taxes are imposed on goods and services rather than directly on individuals or businesses. These taxes are embedded in the prices of goods or services and are ultimately borne by the end consumer. 

                                                                                                          Here’s a breakdown of the differences between direct and indirect taxes:

                                                                                                          S.noDirect taxIndirect Tax
                                                                                                          1.Direct taxes are paid by taxpayers directly to the government, and the tax burden directly impacts the taxpayer.The burden of indirect taxes is passed on to the consumer indirectly, as they end up paying the tax through increased prices for goods and services.
                                                                                                          2.Examples include income tax, property tax, wealth tax, and corporate tax imposed on businesses.Examples include VAT, GST, and central excise duty. VAT is levied on product prices, while excise tax is on manufacturing and retail.
                                                                                                          3.Collecting direct tax, unless deducted at the source, like for salaried individuals, is complex. Tax avoidance is common for businesses, making identification and penalties challenging. Taxes on goods and services are included in the product price, making them unavoidable. Taxes are typically listed on consumer product packaging.
                                                                                                          4.Direct taxes help boost the economy and control inflation.Indirect taxes boost the economy but can cause inflation.
                                                                                                          5.Direct taxes apply to moderate to high-income individuals and businesses.Indirect taxes impact low-income individuals more than high-income ones.
                                                                                                          6.Direct taxes reduce income and discourage savings. Tax avoidance shifts the burden to a smaller part of society.Indirect taxes reduce personal consumption and encourage savings. Consumers are cautious with heavily taxed products.
                                                                                                          7.Direct taxes like income tax reduce socioeconomic inequality by funding societal welfare, benefiting everyone. Public transport is a prime example.Indirect taxes widen the wealth gap. The rich can afford quality essentials, while the poor may miss out on certain goods.

                                                                                                          Should Everyone Contribute to Both Direct Tax and Indirect Tax?

                                                                                                          Absolutely, eligible individuals and businesses should pay both types of taxes to finance public services and investments. Eligibility is determined by each country’s tax laws and income sources. Governments collect direct taxes on income and profits, and indirect taxes on goods and services. Regular tax payments are essential to avoid penalties.

                                                                                                          Which Taxes, Direct or Indirect, Are More Vital to the Economy?

                                                                                                          Both direct and indirect taxes contribute nearly equally to government revenue in advanced economies. They fund public services and investments and are structured to generate revenue effectively. In 2020, the International Monetary Fund (IMF) reported that direct taxes made up 50.6% of total tax revenues in advanced economies, while indirect taxes accounted for 49.4%. 

                                                                                                          What are the Direct Tax and Indirect Tax in the UAE? 

                                                                                                          In the UAE, the primary direct and indirect taxes include:

                                                                                                          1. Corporate income tax: A 9% tax on businesses will be implemented starting June 1, 2023.
                                                                                                          1. Value-added tax (VAT): On January 1, 2018, a 5% VAT was introduced on most goods and services.
                                                                                                          1. Excise tax: Tobacco and energy drinks are subject to a 50% excise tax, while carbonated drinks and alcohol are subject to a 100% excise tax.
                                                                                                          1. Customs duties: Applied to certain imported goods, with exemptions for some products.

                                                                                                          Tax Consultancy Services

                                                                                                          Tax consultants worldwide provide valuable insights into various direct and indirect taxes in the country, ensuring compliance with government regulations. Shuraa Tax stands out as a leading firm in the UAE, offering experienced tax consultants and agents to global clients. Our corporate tax specialists help businesses maintain tax compliance with local laws and regulations.  

                                                                                                          We also assist with tax-related tasks like registration, filing returns, and refunds to avoid penalties. Do you have questions about direct or indirect taxes? Shuraa is always ready to assist. Call us today at +971508912062 or email info@shuraatax.com.