Accounting and Tax

Corporate Tax

Corporate tax is interchangeably referred to as income tax across the GCC countries. It is a form of direct tax collected by governments as a source of income; it is levied on the net income or profits of corporations and businesses.

The UAE government announced on 31 January 2022 their plan to introduce a federal corporate tax on business profits. With effect from 1 June 2023, corporate tax at a standard tax rate of 9% was applied to all mainland business and commercial activities on taxable profits above AED 375,000.

Custom Tax

Custom duty is a tariff or a tax paid to the government imposed on goods transported, imported or exported, across international borders. In general, the purpose of the custom duty is to protect the country's economy, support local merchandise, provide a form of protection to the country's jobs, and control the transport of restricted and prohibited products by regulating the flow of goods into and outside the country.

Excise Tax

Excise tax is an indirect tax set on specific goods; it is imposed within government policies rather than being an international tax imposed across countries. It is primarily considered a business tax; a tax paid by the businesses, producers, importers, or an intermediary; and not by the consumer, although it usually induces an indirect increase in price for consumers. It can be set and paid as a fixed percentage rate assessed on the value of certain goods referred to as “ad valorem” or as a specific fixed amount.

Excise tax is typically imposed in the country where and at the time when the excise goods are consumed; applied on the retail price affecting the price of the excisable goods for final consumers; thus, referred to as a consumption tax.

Value Added Tax

Value added tax (VAT) is an indirect tax on the consumption or use of goods or services; it is applied across the stages of the supply chain, from when the manufacturer purchases raw materials until the retailer sells the goods to the consumer. Registrants for VAT will collect the VAT applicable to their taxable activities from their customers and pay the tax collected to the authority.