UAE - Dignitaries at the event on impact of UAE's corporate tax hosted by Institute of Chartered Accountants of India (ICAI) Dubai chapter.
The introduction of corporate tax in the UAE marked a pivotal step in the nation's economic journey, experts opined during an event that shared insights into the UAE's new corporate tax.
The "Impact of corporate tax - Is it free for free zones”, was hosted by Institute of Chartered Accountants of India (ICAI) Dubai chapter.
The event aimed to deep dive into the effects of corporate tax regulations on free zones within the UAE and shed light on their role in shaping business dynamics, influencing investments, and driving economic growth.
ICAI, as the largest professional body in the UAE, played a key role in raising awareness and understanding of significant financial matters for businesses in the region. The event provided participants with an overview of the Corporate Income Tax (CIT) law and explored the motivations behind opting for increased taxation within the UAE.
Harikishan Rankawat, chairman of the ICAI Dubai Chapter, emphasised that an introduction of headline tax rate of 9 per cent is expected to promote transparent financial reporting among businesses, aiding economic transformation and reducing reliance on oil-based revenues. While the law offers benefits, it also presents challenges for individuals owning multiple sole-ownership companies.
Jaiprakash Agarwal, secretary of the ICAI Dubai Chapter, said: “Known for its business-friendly atmosphere, the UAE has attracted global investors seeking favourable taxation policies. The introduction of excise duty in 2017 a corporate tax in 2023 marked a pivotal step in the nation's economic journey. With a corporate tax rate of 9 per cent, considerably lower than the worldwide average of 23 per cent, the UAE's distinctive tax structure positioned it as an attractive destination for investment.”
Guest speaker Sharad Bandari, managing partner Ardent Advisory & Accounting LLC, spoke about UAE Corporate Tax and strengthening its position in the national and international market. “UAE corporate law focuses on bringing in transparency assurance over reporting and informed decision for investors. He reinstated how the Law aims to adopting best practices from matured tax jurisdiction.
Thomas Vanhee, founding partner – Aurifer, enlightened the members on his views on free zones, and clarified doubts of members on qualifying and excluded activities. Additionally, he drew attention, to the criteria for qualifying activities, especially in comparison to the Qatar Financial Centre (QFC) regime, drew attention. Anticipating further guidance and considering global tax planning strategies such as Base Erosion and Profit Shifting (BEPS), the UAE's tax policies are expected to evolve in the future.
Dipesh Chauhan from Ardent Advisory & Accounting LLC, spoke on the importance of undertaking an impact study of implementing corporate tax on businesses now. He further spoke on the importance of maintaining books as per IFRS and arriving at the correct net profit. Maintenance of correct documentation shall be adequate to justify the deduction of expenses, he added.
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