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Tax Implications of Mainland Company Formation in Dubai, UAE

Learn about the tax implications of mainland company formation in Dubai, UAE, including corporate tax, VAT, and customs duties. Ensure compliance and optimize your financial planning for business success.

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Tax Implications of Mainland Company Formation in Dubai, UAE

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  1. Tax Implications of Mainland Company Formation in Dubai

  2. Introduction • Dubai’s business-friendly environment and strategic location make it a prime destination for entrepreneurs and investors. One of the key considerations for any business setup is the tax structure. Understanding the tax implications is essential for mainland company formation in Dubai, UAE, and can help businesses plan effectively.

  3. Key Taxes to Consider During Mainland Company Formation in Dubai, UAE:

  4. Corporate Tax • Effective from June 2023, businesses undergoing mainland company formation in Dubai, UAE, are subject to a federal corporate tax of 9% on profits exceeding AED 375,000. This tax brings Dubai in line with international tax standards, providing transparency while maintaining a competitive business environment. Small and medium-sized enterprises (SMEs) with profits below this threshold are exempt, allowing them to grow without immediate tax liabilities.

  5. Value-Added Tax (VAT) • In addition to corporate tax, mainland companies in Dubai must also comply with the 5% Value-Added Tax (VAT) imposed on goods and services. Any business with an annual turnover exceeding AED 375,000 must register for VAT. This requirement makes it essential to consider VAT during your financial planning when undergoing mainland company formation in Dubai, UAE. Accurate record-keeping and timely filing of VAT returns are vital to avoid penalties.

  6. Customs Duty • Companies involved in the import and export of goods must also consider customs duties as part of their operational costs. Generally, Dubai imposes a 5% customs duty on most imports, but certain categories of goods may be exempt or taxed at reduced rates, especially those coming from Gulf Cooperation Council (GCC) countries.

  7. THANK YOU • CONTACT US • +971-55 (554) 0853 • info@themilestoneuae.com • www.themilestoneuae.com

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