Shuraa Tax Blog

Category: UAE Taxation

  • Warehouse Keeper Registration and Renewal in the UAE

    Warehouse Keeper Registration and Renewal in the UAE

    Warehouses are the backbone of the UAE’s trade and logistics network. From storing imported goods to managing excise products and supporting supply chains across the region, warehouse keepers play a much bigger role than just holding stock. Because of this, the UAE has put specific rules in place to regulate who can operate a warehouse and how these facilities are managed. This is where warehouse keeper registration and renewal in the UAE becomes important.

    Warehouse keeper registration ensures that warehouses handling goods, especially regulated or taxable items, are properly recorded with the relevant authorities. It helps the government track the movement and storage of goods, maintain tax transparency, and prevent misuse of warehouses within the supply chain.

    If your registration lapses, your warehouse could lose its special tax status overnight. That means all the goods inside could suddenly be hit with huge tax bills, and your operations could grind to a halt.

    Here we’ll show you exactly what you need to do to stay compliant, avoid heavy fines, and keep your warehouse running without a hitch.

    What Is a Warehouse Keeper?

    A Warehouse Keeper is a person or company authorised by the FTA to supervise and manage a Designated Zone. Think of a Designated Zone as a tax-free bubble. It is a specific area (like certain parts of JAFZA or KIZAD) where goods like tobacco, energy drinks, or electronic smoking devices can be stored without paying excise tax immediately. As the Warehouse Keeper, you are the guardian of that bubble. The government trusts you to make sure no goods enter or leave without the proper paperwork and tax being handled.

    Who Needs to Register as a Warehouse Keeper?

    Not every business that has a warehouse needs this registration. It is specifically for those dealing with Excise Goods. Common examples include:

    1. Third-Party Logistics (3PL) Providers: Companies that store and manage inventory for other brands.
    2. Large Manufacturers: Businesses that produce excise goods inside a Free Zone and store them on-site.
    3. Distributors & Importers: Companies that bring high volumes of excise goods into the UAE to be re-exported or sold locally later.

    Warehouse Owner vs Warehouse Keeper: What’s the Difference?

    A warehouse owner is the person or company that owns or leases the warehouse property. A warehouse keeper, on the other hand, is the party responsible for managing the stored goods and ensuring compliance with UAE tax and customs rules. In some cases, both roles are handled by the same business.

    However, in shared or third-party warehouses, the owner and the warehouse keeper may be different entities, and the warehouse keeper is the one required to complete registration and renewal.

    Why Warehouse Keeper Registration Is Mandatory in the UAE?

    Registering as a warehouse keeper is essential for businesses storing regulated or taxable goods in the UAE.

    1. To Monitor Stored Goods Properly

    Warehouses in the UAE often store imported, high-value, or regulated goods. Registering warehouse keepers allows authorities to know where goods are stored and how they are handled. This helps maintain transparency across the supply chain and reduces the risk of misuse or unauthorised movement of goods.

    2. To Ensure Tax and Customs Compliance

    Many warehouses handle excise or taxable goods such as tobacco, soft drinks, or energy drinks. Warehouse keeper registration helps the Federal Tax Authority (FTA) and customs authorities monitor these goods and ensure that taxes are correctly reported and paid. Without registration, it becomes difficult to control tax compliance.

    3. To Assign Clear Responsibility

    Registration clearly identifies who is responsible for the goods stored inside a warehouse. Whether it is a logistics company, distributor, or manufacturer, having a registered warehouse keeper ensures there is accountability for storage, handling, and release of goods.

    4. To Avoid Penalties and Business Disruptions

    Operating a warehouse without proper registration or with an expired registration can lead to fines, delays, or even suspension of warehouse operations. Mandatory registration helps businesses stay compliant, avoid legal issues, and continue their operations smoothly.

    Authorities Involved in Warehouse Keeper Registration in the UAE

    Warehouse keeper registration in the UAE involves coordination with more than one government authority, depending on the type of goods stored and the nature of the warehouse.

    1. Federal Tax Authority (FTA)

    The FTA is the primary authority for Warehouse Keeper registration. They review your application, issue your registration certificate, and manage the EmaraTax portal where you’ll file renewals. Their main goal is tax collection and ensuring that excise goods (like tobacco or energy drinks) are tracked perfectly so no tax revenue is lost.

    2. UAE Customs Authorities

    While the FTA handles the taxes, Customs handles the physical movement of goods. Depending on where your warehouse is located, you will deal with bodies like Dubai Customs, Abu Dhabi Customs, or Sharjah Customs. They monitor the entry and exit of goods from your warehouse.

    3. Free Zone Authorities

    Since most Designated Zones are located within Free Zones (like JAFZA, DAFZA, or KIZAD), the specific Free Zone Authority (FZA) is a key stakeholder. They provide the initial trade license and the lease agreement for your warehouse space.

    4. Security and Safety Departments

    To get FTA approval, your warehouse must be a fortress for excise goods. This involves local security and safety regulators (such as Civil Defence). They inspect your CCTV systems, fire safety measures, and physical fencing. The FTA will often ask for fitness certificates or logs from these departments as part of your application.

    Warehouse Keeper Registration Process in the UAE

    Registering as a Warehouse Keeper in the UAE is a structured process handled entirely online through the Federal Tax Authority (FTA) portal, known as EmaraTax. Here is a simplified, step-by-step guide to how the process works.

    1. Set Up Your EmaraTax Account

    Before you can apply to be a Warehouse Keeper, you need a digital profile. Go to the EmaraTax portal and create an account using your email or UAE PASS.

    Create a Taxable Person Profile: If your company isn’t already registered with the FTA (for VAT or Excise), you’ll need to create a “Taxable Person” profile by entering your company’s legal details.

    2. Submit the Warehouse Keeper Application

    Once logged in, look for the Excise Tax section on your dashboard.

    • Start Service: Click on “Warehouse Keeper Registration.”
    • Fill in the Details: You will need to provide information about your business activities, the types of excise goods you handle (e.g., tobacco, energy drinks), and your estimated stock levels.
    • Link a Designated Zone: By law, a Warehouse Keeper application must be linked to at least one Designated Zone. You cannot be a Keeper of nowhere.

    3. Upload Required Documents

    The FTA needs proof that your business is legitimate and your facility is secure. You will typically need:

    • A valid copy of your UAE business license.
    • Passport and Emirates ID of the person signing the application, plus a Power of Attorney or proof of authorisation.
    • Customs Code (like Dubai Customs).
    • Floor plans of the warehouse and a description of your security systems (CCTV, guards, fencing).

    4. FTA Review and Approval

    After you click “Submit,” the FTA begins its review. It usually takes the FTA about 20 business days to review a completed application. Don’t be surprised if an FTA representative asks to visit your warehouse to check your security measures in person.

    5. Pay the Fees and Provide a Guarantee

    Once you get the initial approval, there are two final hurdles:

    • Registration Fee: You will need to pay the registration fee (usually via the portal).
    • Financial Guarantee: The FTA will require a bank guarantee. The amount is based on your risk profile and the value of the goods you store.

    6. Receive Your Certificate

    Once the payment and guarantee are processed, the FTA will issue your Warehouse Keeper Registration Certificate and a unique Registration Number. You are now officially authorized to operate.

    What is the Cost of Warehouse Keeper Registration?

    The FTA charges a fee for the 12-month registration of each Designated Zone you manage. As of 2026, the FTA has scrapped the fees for digital Warehouse Keeper Registration Certificates. You can now download your QR-verified certificate for free.

    Late Registration Fine (AED 20,000): This is the cost you don’t want to pay. Failing to register within 30 days of starting your activity triggers this heavy penalty.

    The Financial Guarantee: This is the most significant financial part of the process. The FTA requires a bank guarantee to act as insurance for the taxes you are holding.

    • Minimum Amount: AED 175,000.
    • Maximum Amount: Can go up to AED 25 million.

    How it’s calculated: The FTA looks at your risk profile and the total value of excise goods you plan to store. If you have a clean history and high-security systems, your guarantee may be on the lower end.

    Warehouse Keeper Renewal in the UAE

    Getting your registration is a big win, but in the UAE, staying compliant is an ongoing commitment. The Federal Tax Authority (FTA) requires you to prove every year that your warehouse still meets their high standards for security and tax management.

    The Renewal Process:

    As of 2026, the FTA has made it very clear: The burden of renewal is on the Warehouse Keeper. You won’t always get a nudge, so you need to be proactive. You must submit your renewal application at least 20 business days before your current 12-month registration expires.

    Log in to your EmaraTax portal, go to Designated Zone Management, and select the “Amend/Renew” option for your zone. You’ll need an updated Financial Guarantee (if your stock levels have changed significantly), updated security reports or CCTV logs, and a declaration of the average month-end stock value for the past year.

    There is an annual renewal fee of AED 2,000 for each Designated Zone you manage.

    Stay Compliant, Stay Operational

    In the UAE’s highly regulated trade and logistics environment, compliance is not something businesses can afford to overlook. Proper warehouse keeper registration and timely renewal help ensure smooth operations, uninterrupted storage, and full alignment with tax and customs regulations. Being proactive with compliance also reduces the risk of fines and operational disruptions.

    For businesses that want clarity and peace of mind, expert support can simplify the process. Shuraa Tax supports UAE businesses with ongoing tax compliance, advisory, and regulatory guidance, helping you stay on the right side of the law while focusing on growth. Having the right experts by your side makes registration and renewal far less complicated.

  • Foreign Tax Credit Advisory in the UAE

    Foreign Tax Credit Advisory in the UAE

    Living and working in the UAE has always been a smart move for your wallet. But as the world gets more connected, things are getting a bit more complicated. It’s no longer just about the money you make in Dubai or Abu Dhabi; many UAE residents and businesses now have income flowing in from all over the map, through rental property in the UK, stock dividends from the US, or a tech startup in India.

    Because the UAE now has its own corporate tax system, managing that international money requires a bit of a game plan. That’s where Foreign Tax Credit (FTC) advisory comes in.

    If you’re earning money abroad, you’ve probably noticed that the country where you earned the money usually wants a cut, and now the UAE tax office might be looking at that same income. This is the double taxation trap, and it’s one of the biggest headaches for residents today.

    Foreign tax credit advisory helps businesses and individuals understand how taxes paid in another country can be adjusted or claimed, so you’re not paying more tax than necessary. Many UAE-based businesses earn income through foreign branches, international clients, or overseas investments. Similarly, residents may earn salaries, consultancy income, dividends, or rental income from other countries. Managing the tax side of this cross-border income can be confusing and stressful without the right guidance.

    Foreign tax credits are meant to ease this burden by reducing or offsetting taxes paid overseas, helping you avoid double taxation. If you’ve already paid tax on your income in another country, the UAE allows you to subtract that amount from what you owe here.

    What Is a Foreign Tax Credit (FTC)?

    A Foreign Tax Credit (FTC) is a tax relief that helps prevent your income from being taxed twice. It means, if you have already paid tax on your income in another country, a foreign tax credit allows you to reduce your tax liability on that same income under applicable tax laws. This is especially helpful for UAE businesses and residents earning income from overseas.

    How Does a Foreign Tax Credit Work?

    When income is earned outside the UAE, and tax is paid in a foreign country, that tax amount may be claimed as a credit against the tax payable in the UAE (subject to rules and limits). Instead of paying tax twice on the same income, the foreign tax paid is adjusted, making your overall tax burden more manageable.

    Foreign Tax Credit vs Tax Deduction: What’s the Difference?

    Although they sound similar, a tax credit and a tax deduction work very differently:

    Feature Foreign Tax Credit Foreign Tax Deduction
    How it works Subtracted from the final tax you owe. Subtracted from your total income before tax is calculated.
    Value Worth the full amount (100% value). Worth only a fraction (based on your tax rate).
    The Result Usually saves you much more money. Reduces the taxable amount, but you still pay tax on the rest.

    Types of Foreign Taxes That May Qualify for Credit

    Not all foreign taxes are eligible, but commonly qualifying taxes include:

    • An Income-Based Tax: It must be a tax specifically on profits or income (like Corporate Tax or Withholding Tax).
    • A Final Tax: You must have actually paid it to a foreign government and have proof (it can’t just be a potential tax).
    • Non-Refundable: If you can get the tax back from the foreign country through a refund, the UAE won’t give you a credit for it.

    Common Examples:

    • Withholding Tax: Often taken out of dividends, interest, or royalties earned abroad.
    • Corporate Income Tax: Paid by your branch or business office located in another country.

    Indirect taxes like VAT or Sales Tax usually do not count as a Foreign Tax Credit. Those are handled differently in your accounting.

    Does the UAE Allow Foreign Tax Credits?

    Yes, the UAE allows for Foreign Tax Credits. In fact, since the introduction of Corporate Tax, the UAE has made it a core part of its tax framework to stay business-friendly and aligned with international standards.

    Overview of the UAE’s Tax Framework:

    For a long time, the UAE didn’t need a Foreign Tax Credit (FTC) because there was no federal corporate tax. However, that changed with Federal Decree-Law No. 47 of 2022.

    Under the current rules:

    • Taxable Persons: Most businesses and certain individuals (earning over AED 1 million from business activities) are subject to a 9% Corporate Tax on profits exceeding AED 375,000.
    • Worldwide Income: If you are a UAE resident, the government looks at your income from all over the world, not just what you earn inside the Emirates. Because of this, the FTC was introduced to prevent you from being punished for doing business globally.

    The UAE has one of the world’s largest networks of tax treaties, with over 140 agreements in place (including major partners like India, the UK, and China).

    These agreements are designed to prevent the same income from being taxed twice. Under DTAAs, relief is usually provided through:

    • The foreign tax credit method, where tax paid overseas is credited against UAE tax, or
    • The exemption method, where certain foreign income is excluded from UAE taxation

    DTAAs also clarify which country has the right to tax specific types of income, such as business profits, dividends, interest, or royalties.

    How Foreign Tax Credit Applies Under UAE Corporate Tax?

    The FTC is the primary tool used to reduce your UAE tax bill. However, there are two golden rules you need to know: 

    1. The “Lesser Of” Rule: The credit you get is limited to the lower of two amounts: 

    • The actual tax you paid to the foreign government.
    • The UAE Corporate Tax due on that same income.

    2. Use It or Lose It: If you pay 15% tax in a foreign country, but the UAE tax is only 9%, you can only claim a credit for 9%. The remaining 6% cannot be refunded or carried forward to next year; it simply expires. 

    Relevance for UAE Businesses with Foreign Income or Branches:

    If your UAE company has a branch or a Permanent Establishment (PE) in another country, you have two main options to handle taxes:

    • Option A: Claim the FTC (The Credit Method): You include the branch’s profits in your UAE tax return, calculate the 9% UAE tax, and then subtract the foreign tax you already paid.
    • Option B: Foreign Branch Exemption: In some cases, you can choose to completely exempt the profits of your foreign branch from UAE tax altogether. This is often simpler if your branch is in a high-tax country, as it removes the need to calculate credits every year.

    Who Needs Foreign Tax Credit Advisory in the UAE?

    Foreign tax credit advisory in the UAE is not just for large multinational companies. It is equally important for businesses and individuals who earn income from outside the UAE and may already be paying tax in another country.

    1. UAE businesses with overseas operations

    Companies that have foreign branches, subsidiaries, or permanent establishments often pay corporate tax in other countries. Foreign tax credit advisory helps ensure that these taxes are properly adjusted under UAE Corporate Tax rules and relevant DTAAs.

    2. Multinational companies operating in the UAE

    Businesses that earn income across multiple countries face complex tax reporting and compliance requirements. Advisory support helps manage foreign taxes efficiently while aligning with UAE Corporate Tax regulations.

    3. UAE residents earning income from abroad

    Individuals who receive salaries, consultancy fees, dividends, rental income, or investment income from overseas may face foreign tax deductions. Understanding how foreign taxes apply and whether relief is available is key to avoiding double taxation issues.

    4. Freelancers and consultants with international clients

    Professionals working with overseas clients often face withholding taxes on their income. Foreign tax credit advisory helps clarify tax treatment and documentation requirements.

    5. Investors with foreign assets or investments

    Those earning dividends, interest, or capital gains from foreign investments can benefit from advisory support to correctly assess tax exposure and claim eligible relief.

    Foreign Tax Credit Under UAE Corporate Tax Law

    Under Article 47 of the Federal Decree-Law No. 47 of 2022, the UAE Corporate Tax (CT) regime provides a formal mechanism for claiming Foreign Tax Credits (FTC).

    When Can Foreign Tax Paid Be Claimed?

    You can claim a credit only if you meet the Double Tax criteria:

    • The Income is Taxable in the UAE: The credit only applies to income that is included in your UAE Corporate Tax return. If the income is already exempt (like certain dividends under the Participation Exemption), you cannot claim a credit for any taxes paid abroad on that same income.
    • The Tax Was Actually Paid: You must have paid the tax to a foreign government (federal or state level) or have a legal obligation to pay it that is documented and final.

    Conditions and Limitations for FTC Claims:

    While foreign tax credits are allowed, they are subject to certain rules:

    • The Nature of Tax Condition: The foreign tax must be similar to the UAE Corporate Tax. It must be a tax on profits or net income. Indirect taxes like VAT, Sales Tax, or Customs Duties do not qualify for a credit.
    • The Maximum Cap: You can only claim a credit up to the amount of UAE tax that would have been due on that specific income. For example, if you paid 15% tax in a foreign country, but the UAE tax rate is only 9%, your credit is capped at 9%. You cannot use the extra 6% to lower the tax you owe on your local UAE income.
    • Proof of Payment: The Federal Tax Authority (FTA) requires official receipts, withholding tax certificates, or copies of the filed foreign tax return as evidence.

    How to Calculate the Allowable Credit?

    The foreign tax credit is calculated by comparing:

    • The foreign tax actually paid, and
    • The UAE Corporate Tax due on the same foreign income

    The lower of the two amounts is allowed as a credit. This ensures that the credit does not exceed the UAE tax liability related to that income.

    Unlike some countries (like the US), the UAE does not allow you to carry forward unused Foreign Tax Credits. If your foreign tax was higher than your UAE tax in 2025, you cannot save that extra credit to use in 2026. You cannot apply current foreign tax credits to previous years’ tax bills.

    Any excess foreign tax paid over the UAE’s 9% limit is simply lost. It cannot even be deducted as a regular business expense.

    Shuraa Tax Foreign Tax Credit Advisory Services in the UAE

    At Shuraa Tax, we support businesses at every stage of their cross-border tax journey. Our advisory services are designed to simplify foreign tax credit claims, reduce tax risks, and ensure full compliance with UAE Corporate Tax laws and applicable DTAAs.

    • Review and Analysis of Foreign Income and Taxes Paid: We carefully review your foreign income streams and assess the taxes already paid overseas. This helps identify which income qualifies for the foreign tax credit and highlights any gaps or risks before filing.
    • DTAA Interpretation and Application: With the UAE having an extensive DTAA network, understanding treaty provisions is critical. Our experts interpret relevant DTAAs and apply the correct relief method, based on your business structure and income type.
    • Accurate FTC Calculation and Proper Documentation: We ensure your foreign tax credit is calculated accurately in line with UAE Corporate Tax rules. Our team also helps compile and verify all required documentation, reducing the risk of errors or future disputes.
    • Corporate Tax Return Support and Compliance: Shuraa Tax provides complete support for UAE Corporate Tax return preparation and filing, ensuring foreign tax credits are correctly reflected and compliant with FTA requirements.
    • Ongoing Advisory for Cross-Border Taxation: Cross-border tax obligations don’t end with one filing. We offer ongoing advisory support to help you plan future international transactions, manage foreign tax exposure, and stay updated with regulatory changes.

    Shuraa Tax helps you turn foreign tax credit challenges into well-planned tax solutions in the UAE. We align your cross-border income with UAE Corporate Tax rules to support long-term business growth.

    Commonly Asked Questions

    1. Can I claim a credit for VAT or Sales Tax paid abroad?

    No. The Foreign Tax Credit (FTC) only applies to taxes levied on income or profits, such as Corporate Tax or Withholding Tax. Indirect taxes like VAT, GST, or Customs Duties do not qualify.

    2. Can individuals in the UAE claim foreign tax credits?

    While the UAE does not levy personal income tax, foreign tax credit considerations mainly apply to businesses under Corporate Tax and through DTAA provisions.

    3. Do I need a tax treaty (DTAA) to claim a Foreign Tax Credit?

    No. The UAE allows for unilateral tax credits. This means you can claim the credit even if the UAE doesn’t have a specific tax treaty with that country, provided you have proof that the tax was paid.

    4. Does the 0% Corporate Tax rate for Free Zones affect my credit?

    Yes. If your Free Zone company is a Qualifying Free Zone Person paying 0% tax, you won’t have a UAE tax bill to offset. Therefore, you cannot claim a credit for any taxes paid abroad.

    5. Can individuals claim FTC, or is it only for companies?

    Individuals can claim FTC if they are subject to UAE Corporate Tax. In 2026, this applies to individuals (like freelancers or sole traders) whose business turnover in the UAE exceeds AED 1 million.

  • How to Claim Excise Tax Refunds in the UAE?

    How to Claim Excise Tax Refunds in the UAE?

    If you’re running a business in the UAE, excise tax is probably something you’ve dealt with already, whether it’s on tobacco, soft drinks, energy drinks, or other excise goods. But what many businesses don’t realise is that in certain situations, you may be eligible for an Excise Tax Refund. Yes, that means you could actually claim back excise tax that was already paid.

    An excise duty refund usually applies when excise goods are exported, returned, destroyed under authority supervision, or used in specific approved cases. While the idea of getting a refund sounds simple, the process itself can feel confusing, especially with documentation, timelines, and FTA requirements to consider.

    If you’re looking to understand how an Excise Tax Refund in Dubai works, or whether your business even qualifies, you’re in the right place.

    In this guide, we’ll break down the refund process in clear, practical terms, so you know exactly what to expect and how to claim what’s rightfully yours, without unnecessary stress or guesswork.

    What is the Excise Tax Refund in the UAE?

    The Excise Tax Refund in the UAE is a government provision that allows eligible businesses to claim back excise tax they have already paid, under specific conditions. In simple terms, if you’ve paid excise tax on certain goods but later become entitled to a refund due to how those goods were used, exported, or handled, you can apply to recover that amount.

    Excise tax in the UAE mainly applies to products considered harmful to health or the environment, such as tobacco products, energy drinks, soft drinks, and electronic smoking devices. While this tax is mandatory at the point of import or production, the law also recognises that businesses shouldn’t always bear this cost if the goods aren’t ultimately consumed in the local market.

    How does an Excise Tax Refund work?

    An Excise Tax Refund in Dubai or anywhere else in the UAE applies when excise goods meet the refund eligibility criteria set by the Federal Tax Authority (FTA). For example, if excise goods are exported outside the UAE, destroyed under FTA supervision, or used for purposes that qualify for exemption, businesses may claim a refund on the excise tax already paid.

    The refund process is fully online and handled through the FTA portal. Businesses must submit supporting documents to prove eligibility, such as export documents, warehouse records, or Destructive certificates.

    Who can apply for an Excise Tax Refund in the UAE?

    Typically, the following entities may apply for a Dubai Excise Tax Refund or refunds across the UAE:

    • Registered excise tax businesses
    • Importers or manufacturers of excise goods
    • Warehouse keepers dealing with excise products
    • Businesses exporting excise goods outside the UAE

    The key requirement is that the applicant must be registered with the FTA and able to clearly demonstrate that the excise tax paid is refundable under UAE tax regulations.

    Why is the Excise Tax Refund important?

    The Excise Tax Refund in UAE helps businesses maintain healthy cash flow and avoid unnecessary tax burdens. Without this provision, companies exporting or reusing excise goods would end up paying tax on products never consumed locally, which would be unfair and financially restrictive.

    By allowing refunds, the UAE ensures a fair and business-friendly tax environment, especially companies involved in trading, logistics, and manufacturing.

    When Can You Apply for an Excise Tax Refund?

    Businesses registered under excise tax can apply for a refund when tax has been paid but later becomes recoverable under UAE regulations. Understanding when you’re eligible helps avoid delays and ensures smooth compliance.

    Here are the most common situations where an Excise Tax Refund in Dubai and across the UAE may apply:

    1. Excise Tax Paid on Returned or Destroyed Goods

    If excise goods such as tobacco, energy drinks, or carbonated beverages are returned to the supplier or destroyed under approved supervision, you may be eligible for a Dubai Excise Tax Refund for the tax already paid.

    2. Overpaid or Incorrect Tax Payments

    If you’ve paid more excise tax than required due to calculation or reporting errors, you can apply for an Excise Tax Refund in UAE once the discrepancy is identified and properly documented.

    3. Export of Excise Goods Outside the UAE

    When excise goods are exported out of the UAE after tax has been paid locally, businesses can request a refund, provided valid export proof is submitted.

    4. Use of Goods for Approved Exempt Purposes

    Certain excise goods used for approved industrial or non-consumable purposes may qualify for a refund if tax was initially paid but later deemed refundable under UAE to excise tax regulations.

    5. Refunds Due to Amended Returns or Assessments

    If a tax return is amended or an official tax assessment is revised, resulting in excess tax paid, you can submit a refund request through the Federal Tax Authority portal.

    6. Filing Within the Allowed Timeframe

    Excise tax refund applications must be submitted within the timelines set by the authorities. Missing the deadline can lead to rejection, even for valid claims, making timely filing essential for any Excise Tax Refund in Dubai or the UAE.

    Apply for an excise tax refund as soon as excess tax is identified and all supporting documents are in place. Early action ensures faster processing and a smoother refund experience.

    How to Claim Excise Tax Refunds in the UAE?

    Businesses registered for excise tax in the UAE may be eligible to recover excess tax paid under specific circumstances. An Excise Tax Refund in the UAE is usually claimed when excise goods are exported, destroyed, or taxed more than once. Below is a complete breakdown of the process.

    Step 1: Check Your Eligibility for an Excise Tax Refund

    Before applying, confirm that your business qualifies for an Excise Tax Refund. Refunds are typically allowed if:

    • Excise goods are exported outside the UAE
    • Goods are destroyed under official supervision
    • Excise duty was paid more than once on the same goods
    • Excise goods were returned to the supplier

    Eligibility applies across the UAE, including the Excise Tax Refund in Dubai.

    Step 2: Ensure You Are Excise Tax Registered

    Only businesses registered with the UAE excise tax system can apply for an excise duty refund. Your registration must be active and compliant, with no major filing or payment issues.

    Registration and refunds are handled through the Federal Tax Authority portal.

    Step 3: Prepare the Required Supporting Documents

    Accurate documentation is critical for approval. Common documents include:

    • Excise tax returns showing tax paid
    • Proof of export (customs declarations, shipping documents)
    • Destruction certificates approved by the authorities
    • Purchase invoices and stock records
    • Any additional documents requested by the FTA

    Incomplete or incorrect records can delay your Dubai Excise Tax Refund.

    Step 4: Submit the Excise Tax Refund Application Online

    Log in to the FTA online portal and:

    1. Select the excise tax refund service
    2. Enter the refund period and amount
    3. Upload supporting documents
    4. Review and submit the application

    This process applies to both the Excise Tax Refund in Dubai and to the wider Excise Tax Refund system across the UAE.

    Step 5: Respond to Clarifications (If required)

    The FTA may request additional details or clarifications during the review. Respond promptly to avoid delays in processing your excise duty refund.

    Step 6: FTA Review and Verification

    The authority reviews:

    • Accuracy of tax calculations
    • Supporting documents
    • Compliance history of the business

    If everything is in order, the refund request moves to approval.

    Step 7: Receive the Excise Tax Refund

    Once approved, the refund amount is credited to your registered bank account. Processing timelines may vary depending on the complexity of the claim and verification requirements.

    Maintaining accurate inventory records, timely excise tax filings, and proper documentation significantly improves your chances of a smooth Excise Tax Refund in the UAE. For complex cases, professional tax support can help reduce errors and speed up approvals.

    How Long Does an Excise Tax Refund Take in the UAE?

    The timeline for receiving an Excise Tax Refund in the UAE depends on several factors, including the accuracy of your application, the reason for the refund, and the completeness of your supporting documents. While there is no fixed guarantee, most refunds follow a structured review process.

    Standard Processing Time

    Once you submit your refund request through the Federal Tax Authority portal, the review process generally takes 20 to 45 business days. This applies to both the Excise Tax Refund in Dubai and other emirates across the UAE.

    Factors That Can Affect the Timeline

    The time taken for a Dubai Excise Tax Refund or excise duty refund may vary based on:

    • Type of refund claim: Refunds related to exports or double taxation are usually processed faster than destruction-based claims, which require additional verification.
    • Document accuracy and completeness: Missing invoices, incorrect customs documents, or unclear stock records can extend review timelines.
    • FTA clarification requests: If the FTA requests additional information, the refund timeline pauses until the clarification is submitted and reviewed.
    • Compliance history: Businesses with consistent excise tax filings and clean compliance records often experience smoother and faster processing.

    After Approval

    Once approved, the Excise Tax Refund amount is credited directly to the bank account registered with the FTA. Bank processing may take a few additional working days after approval.

    Practical Tip

    To avoid delays in your Excise Tax Refund in UAE, ensure that:

    • All excise tax returns are filed correctly
    • Supporting documents match declared figures
    • Refund claims are submitted promptly for the relevant tax period

    A well-prepared application significantly reduces processing time and follow-ups.

    Get Your Excise Tax Refund Right with Shuraa Tax

    Claiming an Excise Tax Refund in the UAE doesn’t have to be complicated. If your business has paid excise tax on goods that were later exported, destroyed, returned, or overpaid, you may be eligible for an excise duty refund. The key is understanding when you qualify, what documents are required, and how to submit your claim correctly through the FTA portal.

    Whether you’re applying for an Excise Tax Refund in Dubai or anywhere else in the country, proper records, timely filing, and compliance with FTA rules make all the difference. A small mistake or missing document can delay or even reject an otherwise valid Dubai Excise Tax Refund claim.

    That’s where Shuraa Tax can help. Our experienced tax consultants simplify the entire process, from eligibility checks and documentation to submission and follow-ups, ensuring your Excise Tax Refund in UAE is claimed smoothly, accurately, and on time.

    If you want to recover excess tax without stress or guesswork, expert support can save you time, money, and unnecessary back-and-forth with authorities.

    Get in touch with Shuraa Tax today:

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

  • Tax Savings Strategies for UAE Businesses in 2026

    Tax Savings Strategies for UAE Businesses in 2026

    The UAE has long been known as a tax-free business hub, attracting entrepreneurs and investors from across the globe. But over the years, things have changed – first with the introduction of Value Added Tax (VAT) in 2018, and then Corporate Tax in 2023. Even with these updates, the UAE still offers one of the lowest tax rates and most business-friendly environments in the world.

    In 2026, businesses are still adjusting to the new Corporate Tax system. It’s becoming clear that simply following the rules isn’t enough – smart planning can make a big difference. By using the right tax-saving strategies, businesses can reduce their tax burden legally, keep more of their earnings, and plan for long-term growth.

    So, here are some practical and effective tax-saving strategies for UAE businesses in 2026 to help you manage your taxes wisely and make the most of the UAE’s favourable tax system.

    Overview of the UAE Tax System in 2026

    The UAE’s tax system has become more structured in recent years. As of 2026, companies need to comply with three main types of taxes: Corporate Tax, Value Added Tax (VAT), Excise Tax, and the newly introduced Domestic Minimum Top-Up Tax (DMTT).

    1. Corporate Tax:

    Introduced in June 2023, the UAE’s Corporate Tax applies to business profits (exceeding AED 375,000) at a rate of 9%, making it one of the lowest in the world. The first AED 375,000 of taxable income is exempt, which helps small businesses and startups. Certain Free Zone companies may still enjoy 0% tax on qualifying income if they meet specific conditions.

    2. Value Added Tax (VAT):

    Implemented in 2018, VAT is charged at a standard rate of 5% on most goods and services. Some sectors, such as education, healthcare, and exports – may be zero-rated or exempt, depending on the nature of their transactions.

    3. Excise Tax:

    This tax applies to specific goods that are harmful to health or the environment, such as tobacco products, energy drinks, and sugary beverages. It aims to encourage healthier consumption habits and promote social responsibility.

    4. Domestic Minimum Top-Up Tax (DMTT):

    Starting June 2025, the UAE will introduce the Domestic Minimum Top-Up Tax (DMTT) to align with the OECD’s Pillar Two global minimum tax rules. Under this framework, large multinational groups with global revenues exceeding EUR 750 million will be required to pay a minimum effective tax rate of 15%.

    If a UAE entity’s effective tax rate falls below 15%, the DMTT ensures the difference is collected locally rather than by another jurisdiction, keeping tax revenues within the UAE.

    Top Tax Savings Strategies for the UAE Businesses for 2026

    As UAE businesses continue to adjust to the new Corporate Tax and DMTT framework, smart planning has become essential. Here are the top tax-saving strategies UAE businesses can use in 2026:

    1. Choose the Right Business Structure

    Your company’s structure can make a big difference in how much tax you pay.

    • Free Zone companies can still benefit from 0% Corporate Tax on qualifying income if they meet the conditions set by the UAE’s Ministry of Finance.
    • Mainland businesses, on the other hand, are subject to a 9% Corporate Tax on profits exceeding AED 375,000, but can deduct legitimate business expenses.

    Choosing the right setup based on your business model, clients, and operations can help you save significantly in the long run.

    2. Make the Most of Small Business Relief

    If your annual revenue is below the threshold specified by the UAE Corporate Tax law (currently AED 3 million until the end of 2026), you may qualify for Small Business Relief.

    This allows eligible businesses to be treated as having no taxable income, meaning you won’t need to pay corporate tax. It’s one of the simplest yet most effective ways for SMEs to legally reduce their tax burden.

    3. Keep Accurate Books and Claim Deductions

    Every dirham counts when it comes to tax deductions. Businesses can deduct expenses that are “wholly and exclusively” incurred for generating taxable income, such as:

    • Salaries and staff benefits
    • Rent and utilities
    • Marketing and advertising costs
    • Depreciation of business assets

     Keeping detailed and accurate financial records not only ensures compliance but also helps you claim every eligible deduction, reducing your taxable income.

    4. Use Group Relief and Loss Carry-Forward

    If your business is part of a group, you can transfer losses between group companies or offset past losses against future profits.

    This “group relief” mechanism allows companies to reduce their overall taxable income within the group. Additionally, unused losses can be carried forward to future tax periods.

    5. Review Cross-Border Transactions and DTAAs

    If your business deals internationally, make sure you’re making use of Double Taxation Avoidance Agreements (DTAAs).

    The UAE has signed DTAAs with 100+ countries, helping businesses avoid paying tax twice on the same income. Proper structuring of cross-border transactions, combined with transfer pricing compliance, can significantly reduce your global tax exposure while keeping you aligned with UAE tax laws.

    6. Review Related Party Transactions

    If your company has transactions with related parties (like parent companies, subsidiaries, or shareholders), ensure they are conducted at arm’s length prices – the same terms you’d use with an unrelated party.

    Proper transfer pricing documentation helps you avoid penalties and ensures compliance with UAE Corporate Tax rules. It’s also a good opportunity to identify potential areas for tax efficiency within group transactions.

    7. Take Advantage of R&D and Innovation Deductions

    If your business invests in research, technology, or product innovation, keep track of all related expenses.

    Many jurisdictions encourage innovation through tax incentives, and the UAE is increasingly supporting R&D-driven industries – particularly in technology, sustainability, and advanced manufacturing. Properly documenting these costs may help qualify for deductions or exemptions in the future as UAE tax regulations evolve.

    8. Conduct Regular Tax Health Checks

    Don’t wait for an audit to review your tax compliance. Conduct periodic tax reviews with a certified consultant to identify risks, missed deductions, or overpaid taxes.

    A professional audit or review can uncover hidden savings opportunities and help your business stay fully compliant with the latest FTA and Ministry of Finance guidelines. This proactive approach can save you time, stress, and money.

    9. Separate Personal and Business Expenses

    Mixing personal and business finances is one of the most common tax mistakes. Keeping them separate not only makes accounting easier but also ensures that only legitimate business expenses are claimed as deductions.

    Open dedicated business bank accounts and use accounting software to track transactions – this simple step can help you avoid compliance issues and maximise allowable deductions.

    10. Get Expert Consultation and Tax Planning Support

    Even with the UAE’s straightforward tax system, understanding all the rules, reliefs, and exemptions can be challenging – especially as new regulations like the Domestic Minimum Top-Up Tax (DMTT) come into play. This is where expert guidance can make a big difference.

    Partnering with experienced consultants such as Shuraa Tax ensures your business remains 100% compliant while taking full advantage of every possible tax-saving opportunity. Their team of certified tax advisors, accountants, and auditors can:

    • Identify deductions and exemptions you might overlook.
    • Help you structure your business for maximum tax efficiency.
    • Manage VAT, Corporate Tax, and DMTT filings accurately.
    • Offer ongoing support to stay updated with new FTA guidelines.

    Why Tax Planning is Essential for UAE Businesses

    Gone are the days when companies could simply rely on a “tax-free” system – now, smart financial planning is key to staying compliant while maximising profits.

    • Reduce Tax Liabilities Legally: Proper tax planning helps you take advantage of exemptions, deductions, and reliefs available under UAE law, allowing you to minimize your tax payments without breaking any rules.
    • Improve Cash Flow and Profitability: By forecasting your tax obligations in advance, you can manage your cash flow more efficiently and ensure your business retains more working capital for growth and operations.
    • Avoid Penalties and Compliance Issues: Late or incorrect filings can result in hefty fines from the Federal Tax Authority (FTA). Planning ahead ensures your returns are accurate and submitted on time, keeping you fully compliant.
    • Support Business Growth: When your taxes are well-managed, you gain better visibility into your company’s finances. This helps in making informed decisions about investments, expansion, and reinvestment opportunities.
    • Adapt to Changing Regulations: The UAE’s tax landscape is evolving quickly, and what worked last year may not work this year. Regular tax reviews and planning help businesses stay aligned with the latest laws and benefit from new reliefs or incentives.

    How Shuraa Tax Can Help Your Business Save More in 2026

    The UAE’s tax rules are changing, and 2026 is a key year for businesses to get their tax planning right. With Corporate Tax, VAT, and the new Domestic Minimum Top-Up Tax (DMTT), it can feel complicated, but a smart plan can reduce your taxes legally, improve cash flow, and help your business grow.

    This is where Shuraa Tax can help. With a team of certified tax advisors, accountants, and auditors, Shuraa Tax provides end-to-end support for your business:

    • Designing personalised tax strategies to maximise savings
    • Ensuring full compliance with UAE tax laws
    • Handling corporate tax, VAT, and DMTT filings efficiently
    • Keeping you updated on new regulations and reliefs

    With Shuraa Tax by your side, you can focus on running and growing your business, knowing your taxes are handled smartly. Start planning today and turn tax compliance into a tool for saving and growth.

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

    Commonly Asked Questions

    1. What is the corporate tax rate in the UAE in 2026?

    The standard corporate tax rate is 9% on taxable profits above AED 375,000. Certain Free Zone companies may still benefit from 0% tax on qualifying income.

    2. What is the Domestic Minimum Top-Up Tax (DMTT)?

    DMTT ensures that large multinational groups with global revenues over EUR 750 million pay a minimum 15% effective tax rate. It applies if a UAE entity’s effective tax is below this threshold.

    3. Can small businesses reduce their corporate tax?

    Yes. Eligible small businesses may qualify for Small Business Relief, which can exempt them from paying corporate tax on income below the threshold.

    4. Which expenses can UAE businesses deduct to reduce taxes?

    Businesses can deduct expenses wholly and exclusively used for generating income, such as salaries, rent, utilities, marketing, and depreciation of assets.

    5. How can Free Zone companies save on taxes?

    Many Free Zones offer 0% corporate tax on qualifying income if businesses meet specific conditions set by the UAE Ministry of Finance.

  • UAE to Introduce 15% Minimum Tax for Large Multinationals

    UAE to Introduce 15% Minimum Tax for Large Multinationals

    The United Arab Emirates (UAE), long celebrated for its business-friendly environment, is preparing to implement a significant tax reform. Starting January 1, 2025, large multinational companies (MNCs) operating in the UAE will face a 15% corporate tax, while regular businesses will continue to enjoy the standard 9% rate. This landmark move ensures that the UAE aligns with international tax standards and creates a fairer business landscape for global corporations.

    The introduction of the 15% minimum tax reflects the UAE’s commitment to maintaining its reputation as a competitive yet transparent business hub. By targeting large multinationals, the government aims to balance economic growth with compliance with global tax frameworks, preventing base erosion and profit shifting. This reform not only enhances the UAE’s credibility on the international stage but also encourages sustainable investments from both local and foreign businesses.

    For companies operating in the UAE, understanding these changes is crucial for strategic financial planning. Shuraa Tax, with its expertise in UAE corporate regulations, can guide businesses through this transition, ensuring full compliance while optimising tax strategies.

    Why Is the UAE Introducing This Tax?

    The decision to introduce a UAE tax on multinational companies stems from global efforts led by the OECD (Organisation for Economic Co-operation and Development). Many large corporations have historically leveraged low-tax jurisdictions to minimise their tax obligations. To address this, the OECD developed a two-pillar framework establishing a global minimum tax for MNCs.

    By implementing a 15% minimum tax on large multinationals, the UAE positions itself as a transparent and globally responsible hub, ensuring that major corporations contribute fairly to the economy without compromising the country’s investment appeal.

    Who Will Be Affected?

    The new 15% minimum tax in the UAE is primarily aimed at large multinational corporations. Specifically, it applies to:

    • Multinational companies with global revenues of €750 million (approximately AED 3.15 billion) or more in at least two of the last four financial years.
    • Enterprises meeting the OECD’s threshold for global minimum taxation align with the UAE policy with international tax standards.

    This means that major global corporations operating in or through the UAE will need to comply with the new rules, report their financials, and ensure the correct tax is paid on qualifying profits.

    Who is Not Affected?

    • Small and medium-sized enterprises (SMEs) and local businesses with revenues below the threshold will not be subject to this tax.
    • Free zone companies that already benefit from tax incentives and exemptions will largely remain unaffected.

    By targeting only large multinationals, the UAE balances the need for fair taxation with its commitment to fostering entrepreneurship, attracting investment, and maintaining a business-friendly environment. This approach ensures that the country remains a competitive hub for both local and international businesses.

    Business Implications for MNCs

    The introduction of the 15% minimum tax in the UAE carries several important implications for multinational corporations:

    • Compliance and Reporting: Affected companies must ensure their accounting systems and financial statements align with the new tax regulations. Accurate reporting and timely submission will be critical to avoid penalties.
    • Operational Costs: With the additional corporate tax, profit margins may be impacted. Companies will need to reassess budgets, pricing strategies, and investment plans to maintain financial stability.
    • Strategic Planning: Beyond immediate financial impacts, businesses should evaluate long-term implications, including global tax structuring, transfer pricing, and intra-group transactions.
    • Expert Guidance: Handing these new regulations can be complex. Engaging professional advisors, such as Shuraa Tax, can help ensure compliance, optimize tax positions, and streamline the adaptation process.

    By proactively addressing these considerations, multinational companies can continue to operate efficiently in the UAE while meeting their obligations under the new global tax framework.

    Strategic Significance for the UAE

    While the UAE has long been celebrated for its low-tax environment, the introduction of a 15% minimum corporate tax underscores the country’s commitment to global standards and economic transparency. This move carries several strategic benefits:

    • Enhanced Global Credibility: By aligning with international tax norms, the UAE strengthens its reputation as a transparent, forward-looking economy, attracting responsible global investors.
    • Simplified Compliance for Multinationals: Multinational corporations operating in the UAE can now meet their tax obligations locally, reducing the risk of complex audits and disputes in multiple jurisdictions.
    • Sustained Investment Appeal: Despite the new tax, the UAE remains highly attractive for business due to its world-class infrastructure, strategic geographic location, and extensive network of double-taxation treaties.
    • Balanced Economic Policy: The tax ensures fair contribution from large multinationals while preserving incentives for SMEs, startups, and free zone companies, maintaining the country’s pro-business stance.

    By adopting this measured approach, the UAE not only strengthens its fiscal framework but also reinforces its position as a leading global hub for investment, trade, and innovation.

    Preparing for the Transition

    Multinational companies operating in the UAE should take proactive measures to adapt seamlessly to the new 15% corporate tax:

    • Review Financial and Operational Strategies: Assess current cost structures, profit margins, and investment plans to understand the impact of the new tax and adjust strategies accordingly.
    • Seek Expert Guidance: Engage experienced tax consultants and legal advisors, such as Shuraa Tax, to navigate compliance requirements, reporting obligations, and any potential tax planning opportunities.
    • Optimise Internal Processes: Update accounting systems, reporting frameworks, and internal controls to efficiently manage new tax obligations and ensure timely submissions.
    • Plan: Consider long-term implications for global operations, including transfer pricing, intercompany transactions, and cross-border tax strategies.

    Shuraa Tax offers comprehensive support to help multinational companies transition smoothly, ensuring full compliance while minimising operational disruptions and maximising strategic efficiency.

    Preparing for the UAE’s 15% Multinational Tax

    The UAE imposing a 15% tax on multinational companies marks a historic shift in the country’s economic framework. By introducing a UAE tax on multinational companies, the government ensures fair contribution from global corporations while maintaining a conducive environment for business. For companies looking to adapt seamlessly to this new regulation, professional guidance is essential.

    For expert advice and support, you can reach Shuraa Tax:

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

    Handling this new tax landscape proactively will position businesses to thrive in the UAE’s dynamic economy while staying aligned with global tax standards.

  • France and UAE Double Tax Treaty: All You Need to Know

    France and UAE Double Tax Treaty: All You Need to Know

    Paying taxes in two different countries for the same income sounds unfair, right? That’s exactly why double tax treaties exist. These agreements between countries make sure you don’t end up paying tax twice on the same earnings. They clearly define where your income should be taxed – in the country where you earn it or the country where you live – making cross-border business and investment much simpler and fairer.

    The France–UAE Double Tax Treaty, first signed on 19 July 1989 and updated in 1993, is one such agreement. It sets out clear rules for how various types of income such as like salaries, dividends, capital gains, or business profits are taxed when money flows between France and the UAE. The treaty also explains what it means to be a “tax resident” and when a business is considered to have a “permanent establishment” in either country.

    This treaty is especially valuable for investors, expatriates, and companies working between France and the UAE. For example, French citizens or businesses earning in the UAE can enjoy more clarity and fewer tax obligations since the UAE does not impose personal income tax. Similarly, UAE residents or firms investing in France can benefit from reduced withholding taxes and fairer tax treatment.

    In simple terms, understanding this treaty can help you save money and plan your taxes smarter.

    What is a Double Tax Treaty?

    A Double Tax Treaty (DTT) is an agreement between two countries that ensures the same income isn’t taxed twice. Imagine you earn money in one country while living in another – without a treaty, both countries could ask you to pay tax on the same income. That’s where a DTT comes in to prevent this problem. Beyond protecting individuals and businesses from extra taxes, DTTs also encourage cross-border trade and investment.

    Overview of the France-UAE Double Tax Treaty

    The UAE and France Double Tax Treaty was signed in 1989 and came into effect in 1990. This agreement was created to make cross-border financial activities between the two countries simpler, fairer, and more predictable.

    Key Objectives:

    The treaty serves three main purposes:

    • Avoidance of double taxation: Ensures that individuals and businesses do not pay tax twice on the same income in both countries.
    • Prevention of tax evasion: Encourages transparency and cooperation between France and the UAE’s tax authorities.
    • Encouragement of mutual investment: Provides certainty and protection for investors, making it easier to invest or do business across borders.

    Taxes Covered Under the Treaty:

    The treaty mainly applies to income taxes and corporate taxes, covering various forms of income, including:

    • Salaries and wages
    • Business profits
    • Dividends, interest, and royalties
    • Capital gains

    Key Provisions of the France–UAE Double Tax Treaty

    The France–UAE Double Tax Treaty aims to prevent individuals and businesses from being taxed twice on the same income. Here’s a breakdown of the main provisions:

    1. Residence & Permanent Establishment

    • Resident: The treaty defines who is considered a “resident” of France or the UAE for tax purposes.
    • Dual residency: If a person or company qualifies as a resident in both countries, the treaty provides tie-breaker rules to determine primary residency.
    • Permanent establishment (PE): Businesses are considered to have a PE if they have a fixed place of business in the other country, which determines where business profits are taxable.

    2. Withholding Tax (WHT) Rates on Passive Income

    One of the most favourable aspects of the France-UAE DTT is the zero-rate withholding tax on key passive income streams flowing between the two countries.

    Type of Income Source Country WHT Rate (Treaty) Key Details
    Dividends 0% Dividends paid by a French company to a UAE resident (or vice-versa) are generally subject to a 0% withholding tax rate in the source country.
    Interest 0% Interest payments arising in one country and paid to a resident of the other are subject to a 0% withholding tax rate in the source country.
    Royalties 0% Royalties (payments for the use of intellectual property, patents, trademarks, etc.) are subject to a 0% withholding tax rate in the source country.

    Note: While the DTT sets the maximum rate for France to impose WHT on payments to the UAE, the UAE’s domestic law currently maintains a 0% WHT rate on most payments to non-residents (including dividends, interest, and royalties) under its Corporate Tax Law.

    3. Taxation of Capital Gains

    The treaty allocates the right to tax capital gains based on the nature of the asset being sold:

    • Immovable Property: Gains derived from the disposal of real estate (immovable property) are taxed in the country where the property is located (situs principle).
    • Real Estate Rich Companies: Gains from the alienation of shares in a company whose assets consist predominantly (typically more than 50% or 80%) of immovable property located in France are generally taxable in France.
    • Other Assets: Gains from the disposal of non-real estate assets, such as shares not related to property and other financial securities, are generally taxed only in the country where the seller is a tax resident (e.g., in the UAE if the seller is a UAE resident).

    4. Employment Income

    • UAE Residents: Employment income earned in the UAE is generally exempt from French tax, unless the individual performs services in France for more than 183 days in a year.
    • French Residents: Employment income earned in the UAE is generally exempt from French tax, subject to specific conditions.

    5. Taxation of Business Profits (Permanent Establishment – PE)

    The DTT uses the concept of a Permanent Establishment (PE) to determine when a company from one country must pay corporate tax in the other.

    • General Rule: Business profits of an enterprise of one country are only taxable in the other country if the enterprise carries on business through a PE situated in that other country. If a PE exists, only the profits attributable to that PE may be taxed in the host country.
    • Fixed Place PE: A PE typically includes a place of management, branch, office, factory, or workshop.
    • Construction/Installation Projects: A building site or construction, installation, or assembly project constitutes a PE only if it continues for a period of more than six months.
    • Dependent Agent PE: An enterprise is deemed to have a PE if a dependent agent habitually exercises authority to conclude contracts on behalf of the enterprise in the host country.

    6. Inheritance and Wealth Tax

    • Inheritance Tax: Covered under the treaty; however, French inheritance tax applies to French real estate.
    • Wealth Tax (IFI): Non-residents are subject to IFI only on French real estate; foreign assets are not taxed.

    7. Tax Residency and Treaty Benefits

    To claim treaty benefits, UAE residents must provide a Tax Residency Certificate issued by the UAE Federal Tax Authority. The treaty includes provisions to prevent abuse and ensure that benefits are not granted to entities lacking substantial economic activity.

    Who Benefits from the Treaty?

    The France–UAE Double Tax Treaty is designed to help individuals and businesses that have financial ties between the two countries. Here’s who can benefit:

    1. Expatriates and Employees

    Individuals living in one country but earning income from the other – like a French citizen working in the UAE or a UAE resident earning French dividends- can avoid being taxed twice. Salaries, pensions, and other personal income are covered, making it easier to plan finances and reduce tax liabilities.

    2. Businesses and Companies

    • Companies operating in both countries can benefit from lower withholding taxes on dividends, interest, and royalties.
    • Businesses with permanent establishments in the other country know exactly how their profits will be taxed, helping them make smarter investment and expansion decisions.
    • The treaty also encourages cross-border trade, making it easier for French and UAE businesses to collaborate without facing double taxation issues.

    3. Investors

    • Individuals or companies investing in property, stocks, or businesses in the other country benefit from reduced or exempt taxes on returns.
    • Investors enjoy legal certainty when it comes to tax obligations, making the France–UAE market more attractive for long-term investment.

    Avoidance of Double Taxation – How It Works

    One of the main goals of the France–UAE Double Tax Treaty is to ensure that income isn’t taxed twice. The treaty uses two common methods to achieve this: the exemption method and the credit method.

    1. Exemption Method

    Under the exemption method, certain types of income earned in one country are completely exempt from tax in the other country. For example, if a UAE resident earns income in France that falls under the treaty’s exemption rules, France may tax it, but the UAE will not. This method completely removes the risk of being taxed twice on the same income.

    2. Credit Method

    The credit method allows the country of residence to give a tax credit for taxes already paid in the other country. For instance, if a French resident earns income in the UAE and pays UAE taxes, France may still tax the income, but the French tax authority will deduct the UAE tax paid from the French tax liability. This ensures the total tax doesn’t exceed what would have been paid in one country alone.

    How to Claim Benefits Under the Treaty

    If you’re earning income or running a business between France and the UAE, you can take advantage of the treaty to avoid double taxation. Here’s how you can claim the benefits:

    1. Get a Tax Residency Certificate

    A tax residency certificate proves that you are a resident of either France or the UAE. This certificate is usually issued by your country’s tax authority and is required to apply for treaty benefits

    2. Determine the Type of Income

    Identify the income type (e.g., dividends, interest, royalties, business profits, employment income). The treaty provides different rules and exemptions depending on the type of income.

    3. Submit the Required Documentation

    Provide the tax residency certificate, proof of income, and any other supporting documents to the tax authority where you’re claiming relief.

    4. Apply for Tax Relief

    Depending on the method used (exemption or credit), request either a full exemption from double taxation or a tax credit for taxes already paid in the other country.

    5. Consult a Tax Expert

    The process can be complex, and small mistakes can delay or reduce your benefits. Firms like Shuraa Tax can guide you through every step, from preparing documents to submitting applications, ensuring you get the full benefit of the treaty.

    Benefits for French Businesses Investing in the UAE

    The France–UAE Double Tax Treaty provides several important advantages for French companies looking to invest or operate in the UAE:

    • Avoids double taxation: Profits earned in the UAE are generally taxed only in one country, reducing the overall tax burden and providing financial certainty.
    • No UAE withholding tax: Dividends, interest, and royalties paid to French businesses are exempt from withholding tax, allowing profits to be repatriated efficiently.
    • Clear rules on business profits: The treaty defines what constitutes a permanent establishment (PE), helping companies understand where their income is taxable and avoid disputes.
    • Encourages long-term investment: Reduced tax risks and clear regulations make the UAE an attractive destination for French businesses to expand, establish branches, or hold long-term stakes.
    • Simplifies cross-border operations: From paying employees to distributing profits or receiving royalties, the treaty provides guidance that streamlines financial and administrative processes.

    Maximize Treaty Benefits with Shuraa Tax Guidance

    The France–UAE Double Tax Treaty plays a vital role in simplifying taxation for individuals, expatriates, and businesses operating between the two countries. It helps avoid paying taxes twice and provides clear rules on how different types of income are taxed, making cross-border work and investment simpler and more predictable.

     That said, international tax rules can still be tricky. Getting advice from tax experts is important to make sure you’re following the rules, claiming all the benefits you’re entitled to, and planning your taxes in the best way. Firms like Shuraa Tax can help with treaty applications, paperwork, and smart tax planning so you don’t have to worry about mistakes.

    If you’re a French national or business operating in the UAE, Shuraa Tax can help you make the most of this treaty and ensure full compliance with UAE Corporate Tax regulations.

    For customised advice and assistance, you can reach out to Shuraa Tax:

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

    Commonly Asked Questions

    1. What is the France–UAE Double Tax Treaty?

    It’s an agreement between France and the UAE to prevent individuals and businesses from paying tax on the same income in both countries.

    2. Who can benefit from this treaty?

    French or UAE residents, businesses, and investors earning income or operating in the other country can benefit.

    3. What types of income does the treaty cover?

    It covers dividends, interest, royalties, business profits, employment income, capital gains, and real estate income.

    4. How does the treaty avoid double taxation?

    Through the exemption method (income taxed in only one country) and the credit method (tax paid in one country is credited in the other).

    5. Can French businesses investing in the UAE get tax relief?

    Yes. They may benefit from reduced withholding taxes, clear rules on business profits, and legal certainty when operating across borders.

  • UAE Canada Double Tax Treaty Explained

    UAE Canada Double Tax Treaty Explained

    For anyone living, working, or doing business between the UAE and Canada, understanding how taxes apply can be tricky. That’s where the UAE Canada Tax Treaty comes in. Signed in 2002 and effective from 2003, this treaty was designed to facilitate the lives of individuals and businesses operating across both countries.

    The main goal of the treaty is to prevent double taxation, so you don’t end up paying tax on the same income in both countries. It also encourages cross-border investments by providing clear rules on tax responsibilities, making it more straightforward to plan your finances or business moves. The treaty creates clarity, reduces financial headaches, and supports smoother trade and investment between the UAE and Canada.

    What is a Double Tax Treaty?

    A double tax treaty is an agreement between two countries designed to prevent the same income from being taxed twice in both countries. Without such contracts, a person or business earning money across borders could end up paying tax in both their home country and the country where the income is generated, a situation known as double taxation.

    For example, the tax treaty between Canada and the UAE ensures that individuals and companies operating between these two countries don’t face double taxation on the same income. The treaty clearly defines which country has the right to tax various types of income, including business profits, salaries, and dividends.

    Moreover, these treaties limit the host country’s ability to tax certain income and provide mechanisms to resolve disputes if both countries claim taxing rights over the same income. This facilitates smoother cross-border trade and investment, providing taxpayers with clarity on their obligations.

    In short, double tax treaties, such as the one between Canada and the UAE, protect businesses and individuals from paying tax twice, encourage international trade and investment, and provide a structured mechanism for resolving tax disputes.

    Key Provisions of the UAE-Canada Double Tax Treaty

    When it comes to cross-border income, clarity is everything. The UAE-Canada Double Tax Treaty was designed to simplify the tax treatment of individuals and businesses earning income in both countries.

    By clearly defining which types of income are taxed, how residency is determined, and what protections exist against unfair taxation, the treaty ensures that taxpayers don’t face unnecessary financial burdens. Let’s break down the most important provisions that make this treaty work:

    1. Income Types Covered

    The treaty explicitly addresses various types of income to prevent double taxation. This includes pensions, business profits from shipping, income of artists and athletes, students’ income, and income of tax-exempt organisations.

    2. Dual Residency Rules

    Sometimes, a person or company could be considered a resident in both countries. The treaty provides tie-breaker rules to determine which country has primary taxing rights in such cases.

    3. Non-Discrimination and Foreign Tax Credits

    The treaty ensures that residents of one country are not unfairly taxed in the other and allows taxpayers to claim credits for taxes already paid in one country against tax liabilities in the other.

    4. Mutual Agreement Procedure (MAP)

    If double taxation or disputes arise, the treaty provides a formal mechanism for resolving them. This enables the tax authorities of Canada and the UAE to communicate and resolve issues in a structured manner.

    Canada’s Broader Tax Treaty Network

    Canada has established a strong network of over 90 tax treaties and approximately 25 Tax Information Exchange Agreements (TIEAs) with countries worldwide, including the UAE. These agreements serve multiple purposes: they promote transparency, prevent double taxation, and provide a framework for Canada to engage with countries that have low or no tax rates.

    The goal is straightforward: to facilitate international business and investment while ensuring that taxpayers aren’t unfairly taxed twice. In this context, the UAE-Canada Double Tax Treaty is a key part of this network. It reflects Canada’s broader approach to creating clear rules for cross-border income, protecting residents and businesses, and providing mechanisms to resolve disputes efficiently.

    By being part of Canada’s vast treaty network, the UAE treaty ensures both countries can maintain fair taxation practices while promoting trade and investment opportunities.

    The Role of the Multilateral Instrument (MLI)

    The Multilateral Instrument (MLI) is an international agreement developed by the OECD to update and modify existing tax treaties without the need for renegotiation of each one individually. Its main goal is to prevent tax avoidance and ensure that treaties are used as intended.

    For Canada, the MLI introduced several essential features to its tax treaty network:

    • Treaty Abuse Prevention: Measures to stop companies or individuals from exploiting treaties to avoid paying taxes.
    • Binding Arbitration: Provides a formal process for resolving disputes between countries regarding taxation.
    • Dual Residence Rules: Clarifies which country has taxing rights when a person or company qualifies as a resident in both countries.
    • Capital Gains Regulations: Update rules on taxing gains from the sale of certain assets, including real estate and shares.

    Not all of Canada’s treaties were affected by the MLI. Some older agreements were left untouched, while others were updated in line with MLI provisions. In the case of the UAE-Canada Double Tax Treaty, certain aspects of the treaty, such as dispute resolution and anti-abuse rules, are influenced by the MLI framework, thereby strengthening clarity and reducing opportunities for tax avoidance.

    Overall, the MLI plays a crucial role in modernising Canada’s treaty network, ensuring fairness, and maintaining trust in international taxation.

    How Canadian Courts Interpret Tax Treaties?

    Canadian courts generally follow a liberal interpretation of tax treaties to ensure that the country of source does not unfairly tax income from sources outside its jurisdiction. In practice, this means that treaties are interpreted in a manner that limits the host country’s ability to over-tax cross-border income and protects taxpayers from double taxation.

    The Income Tax Conventions Interpretation Act guides this process by providing rules on how Canadian tax treaties should be interpreted. Courts also often refer to the OECD Model Tax Convention, which serves as a blueprint for understanding treaty provisions, particularly those related to residence, source of income, and dispute resolution.

    A landmark case illustrating this approach is Canada v. Crown Forest Industries Limited, where the Supreme Court emphasised that treaty provisions should be interpreted in a way that gives effect to their purpose, rather than being narrowly confined to the literal wording.

    For UAE residents earning income from Canada, understanding this judicial approach is crucial. It ensures they can claim treaty benefits correctly, avoid excessive taxation, and take full advantage of protections under the UAE-Canada Double Tax Treaty.

    Benefits of the UAE-Canada Double Tax Treaty

    The UAE-Canada Double Tax Treaty offers several advantages for individuals and businesses operating between the two countries:

    1. Avoids Double Taxation: Ensures that the same income is not taxed in both the UAE and Canada, reducing financial burden.
    2. Simplifies Cross-Border Planning: Facilitates financial and business planning for individuals with income sources in both countries, streamlining the process.
    3. Legal Clarity and Dispute Resolution: Provides clear rules governing taxing rights and formal mechanisms for resolving disagreements.
    4. Efficient Tax Planning for UAE Residents: Helps UAE residents earning Canadian-source income optimise their taxes while staying fully compliant.

    By offering these protections, the treaty encourages investment, trade, and professional collaboration between the UAE and Canada, while maintaining fair and predictable taxation.

    Practical Steps for UAE Residents & Businesses

    For UAE residents and businesses earning income in Canada, the UAE-Canada Double Tax Treaty offers valuable benefits; however, leveraging them effectively requires careful planning. Here are some practical steps:

    1. Understand Your Tax Obligations: Identify the types of income covered under the treaty, including salaries, business profits, dividends, and pensions.
    2. Claim Treaty Benefits: Ensure you apply the treaty provisions to avoid double taxation and optimise your tax position.
    3. Consult Tax Experts: Professional advice is crucial for proper planning and compliance with both UAE and Canadian tax laws.

    Our experts can help UAE residents and businesses handle treaty rules, resolve disputes, and plan taxes effectively, allowing you to focus on growing your business or managing your income without worrying about double taxation.

    Staying Compliant and Informed with Shuraa Tax!

    Understanding the UAE Canada Tax Treaty is essential for individuals and businesses handling cross-border taxation. The tax treaty between Canada and UAE not only helps prevent double taxation but also provides clarity on tax obligations. It makes international transactions smoother and more predictable.

    However, tax laws and treaty interpretations can change over time, especially with updates under the Multilateral Instrument (MLI). Staying informed about these developments is crucial to remaining compliant and avoiding unexpected tax liabilities.

    Engaging professional guidance ensures that your cross-border transactions are structured efficiently and in accordance with the UAE Canada Double Tax Treaty. Experts can help you make informed decisions, optimise tax benefits, and handle reporting requirements seamlessly.

    For customised advice and assistance, you can reach out to Shuraa Tax:

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

    Staying compliant and well-informed is the key to leveraging the UAE-Canada Tax Treaty effectively while ensuring peace of mind in your cross-border operations.

  • Qualifying Free Zone Person Under UAE’s Corporate Tax Law

    Qualifying Free Zone Person Under UAE’s Corporate Tax Law

    The UAE rolled out its first-ever Corporate Tax law in June 2023, marking a big shift in how businesses are taxed across the country. Under this new law, companies are taxed at 0% on profits up to AED 375,000, and 9% on profits above that amount. But if you’re a business based in a Free Zone, there’s a chance you can still benefit from a 0% tax rate—if you qualify as a “Qualifying Free Zone Person” (QFZP).

    So, what exactly is a Qualifying Free Zone Person in UAE? It’s a Free Zone company that meets certain conditions, like doing the right kind of business activities, keeping proper offices and operations in the UAE, and following rules on how they deal with related companies. If a Free Zone business ticks all these boxes, it can continue to benefit from zero corporate tax on its qualifying income.

    Being a QFZP is a major advantage for businesses in Free Zones, but it comes with strict compliance requirements. If a company fails to meet any of the conditions, it could lose its 0% tax benefit, not just for the current year, but for the next five years as well.

    So, let’s understand what it means to be a Qualifying Free Zone Person under UAE corporate tax, what type of income qualifies, and what you need to do to make sure your Free Zone business stays compliant and tax-efficient under the UAE’s Corporate Tax Law.

    What Is a Free Zone in the UAE?

    A Free Zone (also known as a Free Trade Zone) is a specially designated area within the UAE where businesses can operate with favourable rules and incentives. These zones were created to encourage international investment and make it easier for foreign companies to set up and grow their businesses in the UAE.

    Here are some of the well-known Free Zones where thousands of businesses are successfully operating:

    • IFZA (International Free Zone Authority)
    • Ajman Free Zone
    • RAKEZ (Ras Al Khaimah Economic Zone)
    • DWTC (Dubai World Trade Centre)

    When it comes to taxes, Free Zones have traditionally provided 0% corporate and personal income tax, making them highly attractive. Under the new UAE Corporate Tax Law, businesses in Free Zones can still enjoy a 0% tax rate, but only if they qualify as a Qualifying Free Zone Person (QFZP).

    Who Is a Qualifying Free Zone Person in UAE?

    UAE CT Law – Article 18: A Qualifying Free Zone Person is a legal entity (or branch) that is incorporated or registered in a UAE Free Zone and meets specific requirements set by the law. When these conditions are satisfied, the entity enjoys a 0% corporate tax rate on its qualifying income, while non-qualifying income is taxed at 9%.

    To benefit from the 0% tax rate, a Free Zone Person must fully meet all of the following conditions:

    1. Registered in a UAE Free Zone

    The entity must be legally set up in a designated Free Zone, including branches of non-resident or UAE-resident companies.

    2. Maintain Adequate Economic Substance

    • Conduct its core income‑generating activities (CIGAs) within the Free Zone.
    • Have sufficient assets, qualified employees, and reasonable operating expenditure located there.
    • Outsourcing is allowed only to related or third‑party entities within a Free Zone, with proper oversight.

    3. Earn Qualifying Income

    This includes: 

    • Income from transactions with other Free Zone Persons (that aren’t excluded).
    • Income from qualifying activities performed with non-Free Zone parties (not excluded).
    • Income from holding or exploiting IP, and other income that respects the de‑minimis threshold (≤ AED 5 million or ≤ 5% of total revenue).

    4. No Election to Standard Tax Regime

    The entity must not opt into the standard 9% tax across the board.

    5. Comply with Transfer Pricing Rules

    All related-party transactions must follow the arm’s length principle, with full documentation per Articles 34 and 55.

    6. Prepare Audited Financial Statements

    Annual financials must be audited and compliant with IFRS (or comparable standards).

    7. Stay Below the De-minimis Threshold for Non-Qualifying Income

    Non-qualifying income must not exceed the lesser of AED 5 million or 5% of total income. Exceeding this disqualifies QFZP status for the year and triggers a 4-year cooling-off.

    What Happens If You Don’t Qualify?

    If any of these criteria aren’t met, or if the entity opts for the standard regime, it will lose QFZP status. The result:

    • The entire taxable income is subject to 9% CT (post AED 375k threshold).
    • The disqualification lasts for the current tax year + the next four years.

    What is Qualifying Income for QFZP in UAE?

    Under the Cabinet Decision No. 55 (2023) and Ministerial Decision No. 139 (2023), a Qualifying Free Zone Person (QFZP) must earn income from specific sources to maintain the 0% tax rate:

    1. Income from transactions with other Free Zone Persons

    Profits or service fees from dealings with other free zone entities count as qualifying income, as long as they don’t stem from “excluded activities.”

    2. Income from QUALIFYING Activities with non–Free Zone entities

    Revenue from specific activities conducted with mainland UAE companies or overseas clients qualifies, but only if the activities are on the approved list and not “excluded.”

    Common qualifying activities include: 

    • Manufacturing or processing goods
    • Holding shares and securities
    • Operating ships or logistics services
    • Fund, wealth, investment management, reinsurance
    • Headquarter, treasury, aircraft leasing services

    3. Passive or incidental income (de‑minimis rule)

    Other income (like dividends, capital gains, royalties) may qualify if non-qualifying income stays below the de‑minimis threshold: ≤ AED 5 million or ≤ 5% of total revenue, whichever is lower.

    4. Incidental income tied to qualifying activities

    Minor additional income linked to qualified Free Zone or non‑Free Zone transactions may also qualify.

    What Activities Considered as Qualifying vs Non-Qualifying in the UAE?

    Here’s a quick look at which activities are considered qualifying and which ones are excluded under UAE law.

    1. Qualifying Activities

    According to Ministerial Decision No. 139 of 2023, these activities, and any direct ancillary activities, are considered qualifying:

    • Manufacturing or processing goods/materials
    • Holding shares or securities (for investment)
    • Operating and managing ships in international transportation
    • Financing/leasing aircraft, incl. engines and components
    • Treasury and financing services to related parties
    • Headquarter services provided to related parties
    • Fund, wealth, and investment management, regulated
    • Reinsurance services, regulated
    • Logistics services
    • Distribution of goods/materials in or from a Designated Zone

    Ancillary activities like storage, packaging, or installation related to the above are also qualifying.

    2. Non‑Qualifying (Excluded) Activities

    These are excluded activities and any income from them is non-qualifying:

    • Transactions with natural persons, unless part of allowed activities (e.g., ship operation, aircraft leasing, fund/wealth management)
    • Banking, insurance, finance/leasing services (unless specific exceptions apply like reinsurance or related-party financing)
    • Ownership or exploitation of immovable property, except commercial property within Free Zones sold/leased to other FZPs
    • Intellectual property income (unless specially qualifying)
    • Ancillary services for excluded activities (e.g. maintenance of property)

    Also, any income from a mainland or foreign permanent establishment (branch) of the QFZP is taxed separately at 9% and not treated as qualifying income.

    What is the Registration & Filing Requirements for QFZPs?

    Corporate tax registration is mandatory for all Free Zone entities, regardless of revenue, including QFZPs. You need to register via the FTA’s EmaraTax portal and obtain a Tax Registration Number (TRN).

    Deadline: 

    • If incorporated after March 1, 2025: within 90 days of incorporation
    • For those incorporated before March 1, 2025: deadlines vary, typically 3 months from license date, e.g., a March license requires registration by June 30, 2024

    Tax Return & Disclosure Obligations:

    Annual return filing is required within 9 months of fiscal year-end, even if no tax is payable (nil return). Additional disclosure requirements include:

    • Segregated qualifying vs non-qualifying income
    • Statement of average full-time employees, operating expenses, economic substance, and outsourced activities (including provider TRNs)
    • Audited financial statements, regardless of revenue, under IFRS
    • Transfer pricing documentation and disclosures, including master/local files if threshold met

    Remember to maintain all relevant records and supporting documents, such as financials, audits, TP files, substance documentation, for a minimum of 7 years.

    Failing to register, file, audit, disclose, or maintain substance/TP records can cause loss of qualifying free zone person in UAE status, meaning your qualifying income becomes taxable at 9% and the loss persists for 5 years.

    How Shuraa Tax Can Help?

    Being a qualifying free zone person in UAE can give your business a big advantage, mainly the 0% corporate tax on certain types of income. But to keep this benefit, your Free Zone company must follow specific rules set by the UAE government.

    From meeting certain requirements to keeping proper records, filing tax returns on time, and following transfer pricing rules, it can get a bit tricky. If these conditions aren’t met, your business may lose its QFZP status and end up paying 9% corporate tax for five years.

    That’s why it’s always a smart move to get expert help. At Shuraa Tax, we help Free Zone companies:

    • Check if they qualify as a QFZP
    • Corporate tax registration
    • Corporate tax filing
    • Transfer Pricing documentation and compliance
    • Stay fully compliant and avoid penalties

    If you’re unsure where your Free Zone business stands or need help managing tax rules, get in touch with Shuraa Tax today.

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

    Frequently Asked Questions

    1. Who is a Qualifying Free Zone Person under UAE Corporate Tax?

    A Qualifying Free Zone Person (QFZP) is a legal entity set up in a UAE Free Zone that meets certain conditions:

    • Maintains adequate economic substance in the Zone
    • Earns qualifying income (e.g., from Free Zone deals or approved activities)
    • Adheres to transfer pricing rules and documentation
    • Prepares audited financial statements
    • Keeps non-qualifying income below AED 5 million or 5% of total revenue
    • Doesn’t opt into the standard 9% CT regime

    2. Do all Free Zone companies automatically qualify for 0% tax?

    No. A Free Zone Person is considered a QFZP unless it fails to meet any conditions or elects into the 9% standard CT regime.

    3. Is corporate tax registration mandatory for QFZPs in the UAE?

    Yes, all Free Zone Persons, including QFZPs, must register with the FTA via EmaraTax, even if no tax is due.

    4. What happens if a Qualifying free zone person in UAE loses its status?

    If a QFZP fails to meet the rules or opts into the standard regime, it loses its 0% tax benefit and is subject to 9% tax on all income for that year and the next four years.

  • Guide for Small Business Tax Preparation In 2025

    Guide for Small Business Tax Preparation In 2025

    If you own a small business in the UAE, filing taxes might seem like a big task, but it doesn’t have to be. With the introduction of corporate tax, it’s now more important than ever to understand the basics of small business tax preparation. Whether you’re running a home-based business, a startup, or a freelance gig, understanding how to file a tax return for a small business is crucial for avoiding mistakes and staying compliant.

    This blog will guide you through the entire process of small business tax filing in 2025. From understanding who needs to file, to preparing your records, calculating tax, and submitting your return, we’ve covered it all in simple steps. So, if you’re worried about filing taxes with a small business, this guide will help you get it right and file with confidence.

    What Is Corporate Tax in the UAE?

    Corporate Tax in the UAE is a direct tax imposed on the net income or profit of companies and other business entities. Introduced by the UAE government, it came into effect on June 1, 2023, to align with international tax standards and diversify the country’s revenue sources.

    Key Features of Corporate Tax in UAE:

    • Standard Rate: 9% on taxable income exceeding AED 375,000.
    • 0% Tax Rate: For taxable income up to AED 375,000 (to support small businesses and startups).
    • Scope: Applies to all businesses and commercial activities in the UAE, including those in free zones (with exceptions and incentives if they meet certain conditions).
    • Exemptions: Includes government entities, qualifying public benefit entities, and certain extractive businesses.
    • Filing Requirement: Companies must file a corporate tax return annually, even if they are eligible for a 0% tax rate.

    Purpose:

    The UAE introduced corporate tax to: 

    • Strengthen the country’s position as a global business hub.
    • Comply with OECD’s global minimum tax rules.
    • Reduce reliance on oil and diversify the economy.

    Do Small Businesses in UAE Need to File Corporate Tax?

    Yes, small businesses in the UAE are required to file a corporate tax return, even if they don’t have to pay any tax due to their low income. According to the UAE Corporate Tax Law, businesses with an annual taxable income of up to AED 375,000 are exempt from tax. However, they must still complete the necessary small business tax preparation and comply with reporting requirements.

    Whether you’re a sole proprietorship, an SME, or operating under a trade license, you must file a tax return for your small business each financial year. This helps maintain compliance and ensures your company remains in good standing with the Federal Tax Authority (FTA).

    So, if you’re filing taxes on a small business in the UAE, make sure to keep accurate financial records and submit your tax return on time—even if you qualify for the 0% rate under the small business relief provision.

    What Qualifies as a ‘Small Business’ under UAE Corporate Tax Rules?

    Under UAE Corporate Tax rules, a small business is generally defined as a business whose revenue does not exceed AED 3 million in a tax year. This threshold applies from June 1, 2023, to December 31, 2026, and businesses meeting this condition can elect to receive Small Business Relief under the law.

    If your business qualifies, you can benefit from simplified small business tax preparation and may not have to calculate or pay corporate tax on your profits. However, you’re still required to file a tax return for your small business with the Federal Tax Authority (FTA) each year.

    Whether you’re filing taxes on a small business or just starting your journey, it’s essential to maintain proper financial records. Even with Small Business Relief, small business tax filing remains a legal obligation. When filing taxes for a small business, be sure to follow the correct procedures to stay compliant and avoid penalties.

    Revenue Thresholds, Exemptions & 0% Tax Bracket under UAE Corporate Tax

    Understanding the revenue limits and exemptions is crucial for accurate small business tax preparation in the UAE. Here’s a clear breakdown:

    1. Revenue Thresholds

    • Businesses with revenue up to AED 3 million per year (for tax periods from June 1, 2023, to December 31, 2026) may qualify for Small Business Relief.
    • This allows eligible businesses to be treated as if they have no taxable income—greatly simplifying small business tax filing.

    2. 0% Tax Bracket

    • If your taxable income is up to AED 375,000, you fall under the 0% corporate tax rate.
    • You still need to file a tax return for your small business, even if you owe no tax. This is a legal requirement under UAE Corporate Tax law.

    Exemptions

    The following are exempt from filing and paying corporate tax:

    • Government entities and government-controlled entities.
    • Extractive businesses (oil & gas, etc.) that meet exemption conditions.
    • Certain qualifying free zone businesses (if they meet substance and activity requirements).
    • Charities and public benefit organisations approved by the Cabinet.

    Even if you qualify for exemptions or the 0% rate, you’re still responsible for filing taxes on a small business and keeping proper records. Being compliant not only avoids penalties but also strengthens your business credibility with banks and investors.

    Important CT Filing Deadlines for 2025

    Here are the important Corporate Tax (CT) filing deadlines in the UAE for 2025, based on your financial year-end. Every taxable person must file their CT return within nine months after their financial year closes (and pay any tax due in the same timeframe):

    Financial Year-End  CT Return & Payment Due By 
     31 Dec 2024 30 Sept 2025
    31 Mar 2025 31 Dec 2025
    30 Jun 2025 31 Mar 2026

    Additional reminders related to deadlines in 2025:

    • Natural persons (e.g., freelancers/sole proprietors) whose business turnover exceeded AED 1 million during 2024 must register by 31 March 2025.
    • Entities with short financial periods (e.g., those incorporated or liquidated before February 29, 2024) had extended deadlines for filing by December 31, 2024.

    Why These Deadlines Matter

    Missing these deadlines can result in penalties, including AED 500 for late filing and up to AED 20,000 for extended non-compliance. Staying on top of these dates ensures compliance, avoids fines, and facilitates the smooth filing of taxes for a small business in the UAE.

    How to Prepare Your Corporate Tax Filing in the UAE?

    Filing taxes on a small business in the UAE doesn’t have to be complicated. Follow these simple steps to stay compliant, avoid penalties, and make your small business tax preparation process smooth and stress-free.

    Step 1: Determine if Your Business Needs to File

    Before starting your small business tax preparation, check if your company is required to file for corporate tax. In the UAE, all resident businesses are required to register for corporate tax, unless they are specifically exempt.

    If your business earns less than AED 3 million annually, you may qualify for Small Business Relief and benefit from a 0% corporate tax rate. However, even if you’re eligible for this relief, you’re still required to file a return with the FTA.

    Step 2: Register for Corporate Tax on EmaraTax

    The next step is to register your business on the EmaraTax portal. The Federal Tax Authority manages this online platform and is where you’ll complete all your corporate tax-related filings.

    Registration is mandatory and must be done before your tax return due date. This is a key part of small business tax filing in the UAE.

    Step 3: Organise and Maintain Financial Records

    Good bookkeeping is essential for filing taxes with a small business. Ensure your financial records are up-to-date and accurate.

    This includes tracking your income, expenses, invoices, payroll, and other transactions. Keeping clear records helps ensure that your tax calculations are correct and can be easily verified if the FTA requests supporting documentation.

    Step 4: Calculate Your Taxable Income

    To file your tax return for a small business, calculate your taxable income by subtracting allowable business expenses from your gross revenue. If your net taxable income is below AED 375,000, you fall under the 0% tax bracket.

    If it exceeds AED 375,000, you’ll need to pay 9% tax on the amount above that threshold. This step is crucial for determining the exact amount of corporate tax your business is liable for.

    Step 5: Prepare and Submit the Corporate Tax Return (CTTR)

    Once your financial data is ready and your taxable income is calculated, log into the EmaraTax portal and fill out the Corporate Tax Return (CTTR) form.

    This is where you officially declare your income, claim any reliefs or deductions, and report your final tax amount. This step is the core of filing taxes for small businesses in the UAE.

    Step 6: File Your Return Within the Deadline

    The deadline to file your corporate tax return is within 9 months from the end of your financial year. For example, if your financial year ends on December 31, 2024, your return must be filed by September 30, 2025. Missing this deadline can result in penalties, so timely filing is essential.

    Step 7: Pay Any Tax Due

    If your business is liable for corporate tax, the payment must be made through the EmaraTax portal before the filing deadline. Ensure your tax liability is settled on time to avoid fines or interest charges.

    Step 8: Keep Supporting Documents Ready

    Lastly, after you’ve filed your tax return, keep all supporting documents—like invoices, receipts, and bank statements—ready and accessible. The FTA may request these records for verification. Proper documentation not only protects your business during audits but also helps with future filings.

    Mistakes to Avoid When Filing as a Small Business

    Filing taxes on a small business can be overwhelming, especially if you’re doing it for the first time. Many business owners rush through the process or overlook key details, which can lead to errors that result in penalties, audits, or missed opportunities for savings.

    Here are some common mistakes to avoid during your small business tax preparation and small business tax filing in the UAE:

    1. Missing the Filing Deadline

    One of the most common and costly mistakes is missing the corporate tax return deadline. UAE businesses must file their tax return within 9 months from the end of their financial year.

    Late filing can lead to fines, even if your small business qualifies for the 0% tax bracket. Always mark your calendar and prepare in advance.

    2. Not Keeping Proper Financial Records

    Accurate bookkeeping is the foundation of good small business tax preparation. Failing to track income, expenses, or invoices properly can result in incorrect filings. Without organised records, you also risk non-compliance if the Federal Tax Authority (FTA) requests proof during an audit.

    3. Assuming You Don’t Need to File

    Even if your business revenue is below AED 3 million and you’re eligible for Small Business Relief, you still need to file a tax return. Many entrepreneurs believe they’re exempt and skip this step, which could result in penalties or complications later on.

    4. Overlooking Allowable Deductions

    When you file a tax return for your small business, it’s essential to claim all eligible business expenses. Failing to do so can result in an unnecessary increase in your taxable income. Work with an accountant or advisor to ensure you’re taking advantage of all legal deductions available.

    5. Filing Incorrect or Incomplete Information

    Submitting incorrect financial data, using outdated figures, or skipping required fields are common issues when filing taxes for a small business. Always double-check your entries and review your financial statements before submission. Even simple mistakes can delay your tax processing or lead to rejection.

    6. Not Consulting a Tax Professional

    Trying to handle everything yourself may seem cost-effective, but corporate tax law in the UAE can be complex and challenging. If you’re unsure about any step, working with a tax advisor can help you stay compliant and avoid costly errors during small business tax filing.

    Penalties for Late or Incorrect Corporate Tax Filing

    Non-compliance with UAE Corporate Tax regulations can lead to significant financial consequences:

    • AED 10,000 penalty for not registering on time
    • AED 500 per month, accumulating, for delayed tax return submissions
    • AED 1,000 or more for not maintaining accurate financial records
    • Up to AED 50,000 for providing false information or attempting tax evasion
    • Interest charges apply on unpaid taxes from the due date until settlement

    Note: It’s essential to stay compliant to avoid these escalating penalties.

    Make Small Business Tax Filing Easy with Shuraa Tax

    Preparing and filing taxes on a small business doesn’t have to be stressful. With proper planning, clear financial records, and timely submissions, tax preparation for small businesses becomes manageable and straightforward.

    Remember, even if your business qualifies for the 0% tax rate or Small Business Relief, you still need to file a return. Avoid mistakes, stay informed about UAE tax rules, and don’t hesitate to ask for help when needed.

    If you’re unsure how to file a tax return for your small business or need guidance, Shuraa Tax is here to support you every step of the way.

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

  • How to Obtain a TIN Number in the UAE

    How to Obtain a TIN Number in the UAE

    As the UAE continues to build a stronger tax and regulatory system, having a Tax Identification Number (TIN) — also called a Tax Registration Number (TRN) – is becoming essential. Whether you own a business or work as a freelancer, getting a TIN/TRN helps you stay compliant with UAE tax laws and makes financial transactions smoother.

    In this blog, we’ll break down everything you need to know about the TIN/TRN in the UAE — who needs it, how to apply, and why it matters.

    What is the TIN Number in UAE?

    The TIN number in UAE, or Tax Identification Number, is a unique identifier assigned by the Federal Tax Authority (FTA) to entities and individuals for tax purposes. It plays a crucial role in identifying taxpayers and tracking their obligations under UAE tax laws.

    In the UAE, the TIN is often used interchangeably with the TRN (Tax Registration Number); however, there is a subtle distinction, which we’ll cover later.

    Who Needs a TIN Number in the UAE?

    A Tax Identification Number (TIN) in the UAE is mainly required for individuals and businesses involved in taxable or internationally reportable activities. Here’s a breakdown:

    For Businesses

    1. Companies Registered Under UAE VAT Law

    Any business that has registered for VAT (Value Added Tax) must obtain a TIN. This is crucial for filing tax returns, invoicing, and other compliance-related processes.

    2. Free Zone and Mainland Businesses Exceeding the VAT Threshold

    If a business (whether in a free zone or on the mainland) earns more than the mandatory VAT registration threshold (currently AED 375,000 per annum), it must register for VAT. It will be issued a Tax Identification Number (TIN).

    3. Import-Export Businesses

    Companies involved in importing or exporting goods are often required to have a Taxpayer Identification Number (TIN) to comply with customs and tax regulations, especially when trading with VAT-registered entities.

    For Individuals

    1. Freelancers and Sole Proprietors Offering Taxable Goods or Services

    If you’re a freelancer or operate as a sole trader providing services or products that fall under VAT, you’ll need to register and obtain a TIN.

    2. UAE Residents with International Income (for Tax Reporting Abroad)

    Residents who earn income outside the UAE and are subject to tax reporting in other countries, such as those under FATCA or CRS, may need a UAE Tax Identification Number (TIN) for foreign tax compliance purposes.

    3. Foreign Nationals Conducting Business in the UAE

    Non-residents or foreign entrepreneurs operating a business within the UAE (e.g., through free zones) and engaging in taxable activities are also required to obtain a TIN.

    Special Note for Individuals

    If you’re specifically looking for the UAE TIN number for individuals, it generally applies if you’re:

    • Engaged in any taxable business or freelance activity.
    • Subject to international tax reporting laws, such as the Foreign Account Tax Compliance Act (FATCA) or Common Reporting Standard (CRS), which require the disclosure of tax information to other countries.

    Who Is Eligible to Get a VAT Tax Number in UAE?

    To obtain a VAT Tax Registration Number (TRN) in the UAE, businesses must fall under at least one of the following categories:

    1. Mandatory Registration

    Your business must register for VAT if:

    • Your annual taxable turnover exceeds AED 375,000.
    • This includes revenue from goods and services that are subject to VAT at either 5% or 0%.

    2. Voluntary Registration

    Your business can choose to register if:

    • Your annual taxable turnover exceeds AED 187,500 but is less than AED 375,000.
    • This is ideal for startups or small businesses looking to establish credibility and recover input VAT.

    3. Import/Export Businesses

    • Companies involved in importing or exporting goods and services, even if the goods are zero-rated, are required to register.
    • VAT compliance is crucial for smooth customs clearance and international trade.

    4. Businesses in Designated Free Zones

    • Businesses operating in designated free zones that deal with taxable goods or services are required to register for a Tax Registration Number (TRN).
    • Although certain free zone areas have special VAT treatments, TRN is still needed if taxable supplies are involved.

    Importance of Tax Identification Number (TIN) for Businesses in the UAE

    A Tax Identification Number (TIN)—commonly referred to as a tax number in Dubai or the United Arab Emirates—is a vital requirement for businesses operating in the region. Here’s why it’s so important:

    1. Accurate VAT Return Filing

    The TIN allows businesses to file their VAT returns correctly and on time with the Federal Tax Authority (FTA). This ensures transparency in all tax-related matters and helps avoid unnecessary fines.

    2. Legally Compliant Business Operations

    With a TIN, businesses can operate within the legal framework of the UAE’s taxation system. It acts as proof of tax registration, which is essential for legitimate and credible operations.

    3. Smooth Import and Export

    A registered TIN is necessary for customs clearance during import and export activities. It helps businesses avoid regulatory hurdles and ensures that cross-border transactions go smoothly.

    4. Avoidance of Penalties

    Businesses that fail to register for tax or misreport their tax obligations risk heavy penalties. A TIN helps them comply with FTA requirements and avoid financial and legal consequences.

    5. Builds International Trust

    Having a TIN adds to a business’s credibility with international clients, suppliers, and banks. It signifies that the company is tax-compliant and transparent, key traits for building cross-border partnerships.

    6. Crucial for Invoicing and Audits

    Whether you’re a freelancer or a company, a UAE tax identification number is critical for issuing VAT-compliant invoices, maintaining proper tax records, and responding to audits by the authorities.

    In summary, the TIN in the UAE is not just a formality—it’s a core requirement for lawful, efficient, and reputable business operations.

    How to Get a TRN Number Online in UAE

    If you’re planning to operate a business in the UAE and your taxable turnover meets the threshold, obtaining a TRN (Tax Registration Number) is mandatory. Here’s how you can get your TRN number online through the Federal Tax Authority (FTA) portal:

    Step 1: Create an FTA Account

    Start by visiting the FTA e-Services Portal.
    Click on Sign up and fill in the basic details such as:

    • Email address
    • Mobile number
    • Username and password

    You’ll receive a verification link via email or SMS. Once verified, your account will be activated.

    Step 2: Log in to Your FTA Dashboard

    Use your credentials to log in. Once inside your FTA dashboard:

    • Look for the ‘VAT Services’ tab.
    • Click on ‘Register for VAT’ to begin your application.

    Step 3: Fill in the VAT Registration Form

    Complete the online form by providing the following details:

    Business Information

    • Registered business name (as per your trade license)
    • Legal structure (LLC, Sole Establishment, etc.)
    • Trade license number and issuing authority
    • Business address and contact details

    Financial Details

    • Projected or actual taxable turnover (must exceed AED 375,000 for mandatory registration)
    • Details of imports/exports if applicable
    • Description of business activities

    Banking Information

    • Bank name
    • IBAN (International Bank Account Number)

    Managerial Contacts

    • Details of business owners or managers (Emirates ID/passport info)

    Step 4: Upload Required Documents

    You must scan and upload the following documents (formats: PDF, JPEG, etc.):

    • Trade license copy
    • Passport and Emirates ID of owners/partners
    • Proof of business address (e.g., tenancy contract or utility bill)
    • Financial statements or invoices proving turnover
    • Bank account letter or statement
    • Customs code certificate (if importing/exporting)

    Step 5: Review and Submit the Application

    Double-check all your entries and uploaded documents.
    Once satisfied: 

    • Click Submit
    • You will receive an Application Reference Number and a confirmation email.

    Step 6: FTA Review and TRN Issuance

    The FTA will review your application, which usually takes 5–20 business days. If approved, your TRN (Tax Registration Number) will be issued and visible in your FTA dashboard. You’ll also get an official VAT Certificate.

    Documents Required for Online TIN Registration in UAE

    To successfully register and get your TRN/TIN, prepare the following documents:

    • Copy of Trade License
    • Emirates ID and Passport copy of the owner/partners
    • Business contact details (email, mobile)
    • Bank account details
    • Custom code certificate (if applicable)
    • Turnover proof (bank statements, audited accounts, etc.)
    • Memorandum of Association (MOA)

    How to Verify TIN Number Online in UAE?

    Once issued, you can verify your TIN in the UAE through:

    • Visiting the FTA TRN Verification Tool.
    • Enter the TRN number to confirm its validity.
    • This ensures that you’re dealing with VAT-registered entities.

    Difference between TIN and TRN in UAE

    Here’s a clear table highlighting the difference between TIN and TRN in the UAE:

    Aspect TIN (Tax Identification Number) TRN (Tax Registration Number)
    Full Form Tax Identification Number Tax Registration Number
    Issued By Federal Tax Authority (FTA) or the relevant authority for international reporting Federal Tax Authority (FTA), UAE
    Who Needs It Individuals and businesses with international tax obligations Businesses in the UAE meeting the VAT registration threshold
    Usage Scope Broad — for global tax reporting, FATCA, CRS, banking, etc. Narrow — specific to VAT returns, invoicing, and tax compliance in UAE
    Format Not publicly standardized; varies based on type 15-digit number (e.g., 100123456700003)
    Applies To Individuals? Yes, especially those with foreign income or reporting needs No, unless the individual is running a taxable business or freelance activity
    Applies To Businesses? Yes, especially those involved in cross-border operations Yes, for businesses with taxable supplies exceeding AED 375,000 annually
    Registration Requirement Not always mandatory unless dealing with international tax matters Mandatory for businesses exceeding the VAT threshold in UAE
    Main Legal Reference OECD guidelines, FATCA, CRS regulations UAE VAT Law and FTA regulations

    In essence, the TIN number in the UAE, TRN, and VAT number often refer to the same number assigned by the FTA; however, TIN can also refer to identifiers used for international tax compliance.

    What is the Processing Time to Obtain a TRN Certificate in the UAE?

    After submitting your VAT registration, the typical processing time is 5–20 business days, depending on the completeness and accuracy of your application. Upon approval, the TRN certificate will be available for download via the FTA dashboard.

    Understanding Tax Registration!

    Whether you’re a business owner or an individual involved in taxable services, obtaining your TIN number in UAE is a crucial step toward tax compliance and smoother operations. Understanding the process, documents, and differences between TIN, TRN, and VAT numbers can save you time and ensure regulatory peace of mind.

    Need help registering for your UAE TIN or VAT number? 
    Let the experts at Shuraa Tax guide you through the hassle-free process.

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

    Note: The information provided above is for educational purposes only. For professional assistance with TRN registration in the UAE, Shuraa Tax is here to help.