World

UAE businesses prepare for upcoming federal corporate tax as deadline looms

As the UAE braces for the introduction of the federal corporate tax this week, eligible businesses are gearing up to navigate the implications of the fiscal change.

The Ministry of Finance announced the federal Corporate Tax (CT) in January 2022. This corporate tax will take effect for any fiscal year starting on or after June 1, 2023, and is at a standard statutory rate of nine percent.

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Companies with an income surpassing $102,110 (Dh375,000) will fall within the taxable bracket.

Meanwhile, profits below this threshold will remain untaxed, maintaining a zero percent tax rate.

For a foreign entity with a Permanent Establishment (PE) and source of income in the UAE, as well as Freezone entities with a branch in the mainland, only their mainland income will be taxable under the new CT.

There are certain businesses which can be excluded from CT, or circumstances under which they may be required to pay it, and so it’s important for companies to contact a qualified tax advisor who can assess the eligibility of an exemption.

Nazar Musa, CEO, PRO Partner Group, told Al Arabiya English that companies need to be prepared for the fast-approaching deadline.

“For many businesses in the UAE, this means that a tax on the business’ net revenue will now need to be paid,” he said. “Companies with revenues streams in the UAE mainland, freezones and internationally will need to fully evaluate the implications in order to take appropriate measures for reducing the company’s tax burden.”

Why it is important

Musa explained that the UAE is a member of the Organization for Economic Co-operation and Development (OECD), and as such has committed to the guidance of Pillar II of the OECD’s Base Erosion and Profit Shifting Project (BEPS), intended to eliminate the ability for companies to move profits between nations to avoid taxation.

As well as being compliant with the OECD framework, the UAE will see benefit from the new tax regime in other ways, he said.

“An increase in tax revenue will see the UAE become more in-line with international taxation practices, and despite the introduction of the tax, at a rate of nine percent, it remains the lowest in the GCC and is considerably lower than the global 23.54 percent average. So, it remains to be seen, but the introduced tax may not dissuade foreign investment."

“It is essential for companies to ensure full compliance with their corporate tax liabilities, otherwise they may incur fines. Therefore, it’s important for businesses to understand how the new taxes will impact them.”

Penalties

Understanding the new corporate tax laws in the UAE, especially for those unfamiliar with UAE tax, can be complex. Should a company fail to comply, this can result in fines or the loss of license and the right to operate. Musa said it is highly recommended that businesses contact a professional UAE tax advisory firm to seek advice to gain an understanding of the impact the new tax law will have on their specific situation.

“Income generating businesses in the UAE need to gain an understanding of the newly imposed UAE corporate tax, in order to best equip themselves for the nearing introduction,” he said. “There is an opportunity for businesses to lower their tax burden through separate branch offices, which requires specific guidelines to be followed.”

“For example, for a Freezone business that may currently doing business within the UAE mainland, it may be prudent to set up a separate mainland branch office to separate business done in the mainland UAE from that done internationally and within the freezones. The company will need to take advice from a UAE tax professional about this to ensure there is a commercially viable reasoning behind this delineation of revenue.”

Currently, businesses in the UAE are awaiting the official definition for what will be classified as Qualifying Taxable income, and this together with anti-abuse guidelines will color the decision making for a lot of companies in the UAE to ensure they correctly register and pay their taxes in the UAE.

Musa said: “Companies whose year-end is 31st May 2023 will need to update their internal accounting and methods from 1st June 2023 to embrace the new UAE Corporate Tax guidelines. For those companies whose financial year ends 31st December 2023, corporate tax is applicable from 1st Jan 2024. All UAE companies are required to register, whether freezone or mainland, irrespective of the exemption status, and to file corporate tax returns.”

UAE businesses subject to corporate tax are required to register and obtain a tax registration number. Generally, the registration application must be submitted to the Federal Tax Authority.

Taxable businesses must file a tax return to the FTA no later than nine months after the end of the financial year.

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Original Article

World

Crown Prince of Abu Dhabi meets with CEOs of leading Norwegian companies

H.H. Sheikh Khaled bin Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi, has met with a group of CEOs from leading Norwegian companies, as part of their participation in the UAE-Norway Investment Forum, held alongside his official visit to the Kingdom of Norway.

During the meeting, H.H. Sheikh Khaled bin Mohamed bin Zayed underscored the UAE leadership’s commitment to strengthening economic cooperation with its international partners.

He highlighted that investment in innovation and knowledge is a cornerstone for achieving sustainable development, noting that enhancing collaboration with Norwegian companies across key sectors will open new avenues for mutual economic growth between the two countries.

The UAE-Norway Investment Forum, taking place in Oslo, aimed to highlight available investment opportunities and strengthen trade relations between the UAE and Norway, fostering shared interests and supporting innovation and knowledge-based economic visions.

-wam

World

At the Indonesia International Book Fair 2024, TRENDS inaugurates 10th global office, releases four books

As part of its Asian research tour, partnership with Aletihad News Center, and
primary sponsorship of the Indonesia International Book Fair 2024, TRENDS
Research & Advisory inaugurated its office in Jakarta, marking its 10th location
worldwide. It also released four books in Indonesian.
The inauguration event was attended by ambassadors of the UAE, Bahrain, and
Jordan to Indonesia, chairpersons of the UAE and Indonesian Publishers’
Associations, the Director of TRENDS’ Jakarta office, and a group of researchers
and academics.
Speaking at the event, Dr. Mohammed Abdullah Al-Ali, CEO of TRENDS
Research & Advisory, stated that TRENDS’ international offices—set to reach 15
by the end of 2024—aim to enhance the Center’s research efforts and deepen its
role in disseminating knowledge, thus serving as a global knowledge bridge.
He emphasized, “At TRENDS, we believe in the importance of cooperation
between think tanks and prioritize this endeavor. We believe the TRENDS office in
Jakarta will enhance the exchange of knowledge and ideas between think tanks in
Asia and the Middle East, opening new horizons for collaboration in various
fields.”

Four books in Indonesian
As part of the Jakarta office’s inaugural activities, four books were released in
Indonesian, including the 11th and 12th books of the Muslim Brotherhood
Encyclopedia and Global Trends in AI and Automation and the Future of
Competition between Man and Machine: An Analytical Forward-looking Vision.

Hostility to Arab states
The 11th book of the Muslim Brotherhood Encyclopedia, The Concept of the State
According to the Muslim Brotherhood, highlights its hostile stance toward Arab
states since its inception. The group views them as an obstacle to its ascent to
power. It opposed the modern principles upon which these states were built,
considering them incompatible with the group’s unique interpretation of Islam,
which it claimed to embody exclusively.

Exclusion of nonconformists
The 12th book, The Muslim Brotherhood: Rejection of Tolerance and Exclusion of
Nonconformists, examines the Muslim Brotherhood’s stance towards
nonconformists, individuals, and entities. The book reveals the group’s binary view
of the world, categorizing others as allies or adversaries. It ties these relationships
to the Brotherhood’s internal power struggles and self-serving interests.

Global Trends in AI
The third book, Global Trends in AI, explores significant developments in AI and
its impact on various aspects of life, including the economy, society, and
governance. It also offers a comprehensive analysis of technological advancements
in AI, its applications across sectors, the ethical and social challenges it presents,
and its future trajectory.

Automation

The fourth book, Automation and the Future of Competition between Man and
Machine: An Analytical Forward-looking Vision, addresses the growing challenges
faced by the human workforce in the face of widespread automation and AI
applications. The book concludes that while automation presents a significant
challenge to the labor market, it simultaneously creates new opportunities. It
emphasizes the importance of preparing for this shift through skills development,
continuous education, and adopting economic and social policies that support the
workforce.

Prominent pavilion and active presence
The TRENDS’ pavilion at the Indonesia International Book Fair has attracted
numerous visitors, including academic researchers and officials, such as the
ambassadors of the UAE, Bahrain, Qatar, Jordan, and Turkey. Additionally,
chairpersons of Arab and Indonesian publishers’ associations, authors, publishers,
and students visited the pavilion. All were impressed with and praised TRENDS’ diverse, valuable publications. They also commended TRENDS’ active
international presence and ability to address global developments with rigorous
analytical research.
Dr. Mohammed Abdullah Al-Ali honored the esteemed guests, including
ambassadors of the UAE and Bahrain to Indonesia, Wedha Startesti Yudha,
Chairperson of the Indonesia International Book Fair Committee, Arys Hilman
Nugraha, Chairman of the Indonesian Publishers Association, and others,
presenting them with TRENDS’ publications and commemorative shields.
Additionally, he awarded TRENDS’ Research Medal to Ni Made Ayu Martini
Indonesian Deputy Minister of Marketing, Tourism and Creative Economy
It is worth noting that during its current Asian research tour, TRENDS announced
the launch of the TRENDS Research Medal, awarded to individuals who make
significant contributions to the development of scientific research and promote collaboration with TRENDS in strengthening a culture of research across various fields.

World

US determined to prevent full-scale war in Middle East, Joe Biden tells UNGA79

US President Joe Biden highlighted the US Administration’s determination to prevent a wider war that engulfs the entire Middle East region, noting that a diplomatic solution “remains the only path to lasting security to allow the residents from both countries to return to their homes on the border safely”.

In remarks he made today before the 79th Session of the United Nations General Assembly (UNGA79), the US President said, “Full-scale war is not in anyone’s interest,” adding that a diplomatic solution is still possible.

He also touched on “the rise of violence against innocent Palestinians on the West Bank”, and the need to “set the conditions for a better future”, which he said featured “a two-state solution, where the world — where Israel enjoys security and peace and full recognition and normalised relations with all its neighbours, where Palestinians live in security, dignity, and self-determination in a state of their own”.

President Biden underscored the ceasefire and hostage deal put forth by Qatar and Egypt, which the UN Security Council endorsed. He said, “Now is the time for the parties to finalise its terms, bring the hostages home,” adding that this would help ease the suffering in Gaza, and end the war.

-WAM