Tax consulting

Starting in 2024, a corporate tax was introduced in the UAE: now all organizations registered onshore (mainland) with an annual income exceeding 375 thousand dirhams are subject to a 9% tax on their profits. At the same time, every organization for corporate tax purposes must be registered for a special account and obtain a Tax Registration Number (TRN).

Their first tax period ended on 31.12.2024, and by September 2025, such organizations must file a tax return and pay the tax.

Our team can assist with registration and obtaining a TRN, and can also be helpful in case of difficulties in preparing the tax return and contentious issues regarding the taxation of specific assets. Additionally, we can conduct an analysis to reduce the tax base and explore opportunities for legal tax optimization.

Since 2018, UAE companies have been subject to VAT obligations: these arise if the value of their taxable supplies exceeds 375,000 dirhams. At that point, the organization also becomes obligated to register for VAT purposes with the UAE tax authorities.

At the same time, the taxpayer can register voluntarily if the aforementioned amount exceeds 187,500 dirhams. In this case, registration is optional.

After the corresponding registration, the company is assigned a reporting period and becomes obligated to file reports and pay tax quarterly at a rate of 5%.

We can assist our clients with both voluntary and mandatory registration with the tax authorities, as well as with preparing VAT returns. We can also assess the legitimacy of exemptions for certain transactions and explore possibilities for tax optimization of various activities.

Residents of free zones compared to onshore (mainland) residents have several advantages, the key one being the ability to apply a 0% corporate tax rate regardless of income level.

Currently, there are over 40 multifunctional free zones in the UAE. They are characterized by efficient infrastructure and high-quality administration, which facilitates uninterrupted workflow and saves enterprises significant resources.

Due to the fact that free zones are, firstly, located in different emirates and, secondly, differ in permitted types of activities, their regulation varies in certain aspects. However, the general requirements for their residents are unified.

In particular, to become a free zone resident, a taxpayer must:

1. Ensure an adequate level of economic presence (substance) in the zone; The organization must have a sufficient level of real assets and employees working in the free zone, as well as incur corresponding expenses.
2. Ensure an adequate level of "qualified" income.

Specifically, qualified income includes income from owning shares and securities, from logistics services, and from manufacturing goods.

At the same time, the total amount of "non-qualified" income must not exceed 5% of revenue or 5 million dirhams (whichever is lower) per year. If the relevant income exceeds the threshold, the entity will be deemed to have lost the right to the benefit. "Non-qualified" income will be subject to corporate tax in any case.

We provide the client with a full range of services to support the company's activities in the free zone, starting from its establishment. Additionally, we handle specific issues related to consulting on ensuring an adequate level of economic presence and a minimum level of "qualified" income for applying the 0% corporate tax rate.

To date, the UAE has concluded double taxation avoidance agreements with over 140 countries and territories, including Cyprus, the United Kingdom, Spain, and other European jurisdictions. It is expected that an agreement with Russia will enter into force in 2026.

Thus, registering a business operating worldwide in the UAE will allow for significant tax savings, especially considering the UAE's liberal approach to taxing its own residents.

Our team will be happy to advise clients on cross-border taxation issues and the use of tax treaties with any countries.

Despite all the changes in tax legislation, the UAE, due to its numerous tax agreements, free zones, and low tax rates, remains an attractive jurisdiction for doing business.

At the same time, to minimize costs, taxpayers need to consider using legal tax planning mechanisms: for example, review the distribution of functions and assets among legal entities, as well as the formation of transactional chains. This is also relevant for those who are just planning to start a business in the UAE.

We can help develop a business structure, taking into account applicable benefits, deductions, loss carryforwards, and the application of the UAE's international double taxation avoidance agreements.

We are ready to assist in forming an efficient business structure that best serves the client's interests while ensuring maximum tax savings through the use of a combination of various legal mechanisms.