Tag: tax

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Tax Incentives and Exemptions in the UAE

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Calx Blog Covers

If you’re looking to establish a business in the UAE, then understand all the necessary tax laws. Make sure that you follow all of them to avoid any hefty penalties or worse situations. In this aspect, there are certain tax incentives and exemptions in the UAE that you need to know that encourage business growth and foreign investment. 

Overview of Tax Incentives and Exemptions in the UAE

  • No Corporate Income Tax

An attractive feature for a business owner in the UAE is that there is no compulsion of corporate income tax. Most of the businesses can enjoy 100%  of the profits they generate without any burden of paying income tax. Furthermore, this provides an opportunity for the business to reap full benefits by making UAE a highly tax-efficient destination.  

  • VAT Refund Scheme

A 5% VAT is a standard rate that many businesses need to pay. Besides that, there are also certain industries that can benefit from a VAT refund scheme. It majorly includes the industries of tourism, healthcare and education etc. By recovering the VAT you’ve paid on expenses, your business can effectively reduce its operating costs. 

  • Investment Incentives

The UAE government aims to encourage businesses to invest in key industries leading to an increase in economic growth. For this purpose, they provide various incentives to different businesses working in strategic sectors. Therefore, if you’re a business owner working in such a domain, you can avail of reductions in fees, support for research exemptions from customs duties, etc. 

  • Innovation and Entrepreneurship

Different seminars and webinars held all across the UAE help entrepreneurs make use of exciting opportunities. Not only that, it will let your business explore many new aspects and build partnerships all across the globe. Moreover, this element actively promotes innovation and can open up a way of getting many incentives. 

Conclusion

From no corporate tax income to VAT refund schemes, businesses can avail of many incentives and exemptions in the UAE. This makes the UAE an attractive destination where many business owners can invest and initiate expansion. Hence, make use of the opportunities and avail of these tax advantages to thrive in the economic hub of UAE.  

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Tax Precautions Business Entities Should Take In UAE

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Calx Blog Covers

If you’re a startup firm, you should be careful in dealing matters of tax. Tax planning is a crucial step which causes business to manage their financial operations by minimising tax liabilities. Therefore, it is essential to ensure tax precautions to avoid any legal issues, financial penalties, and reputational damage associated with tax-compliance. 

4 Key Tax Precautions For Businesses In UAE

•. Clear Understanding of Tax System

With the introduction of new sorts of taxes such as VAT in UAE, you need to have a clear understanding of them. Whether it’s excise or corporate tax, you have to know when and how to pay them to avoid tax penalties. 

  • Purchase Tax-Assets

If you want to lower your tax-obligations, it is feasible to invest in tax-efficient properties. Purchasing tax-efficient assets can be such as zero-coupon bonds, corporate bonds, and tax-efficient mutual funds etc.  Moreover, it helps to diversify the contribution towards tax efficient account types for reducing the tax burden. 

  • Claim All Expenses 

Recognizing all those expenses incurred by the firm is significant for reducing the liabilities of the tax burden. Once you are able to reduce these costs, the company can avail the tax benefits. This will instantly provide an advantage to the company by preventing them from having to pay taxes. 

  • Investing Overseas

Another tax precaution which your business can take is to offshore the profits of the corporate entity. Furthermore, invest overseas where you can get tax benefits such as zero percent tax on corporate tax. A major reason to do this is to enjoy overseas profit which can’t be charged for corporate income tax in the UAE. 

Wrapping it Up

Before you apply for tax filling, you should do proper tax planning. For this purpose, you need to undertake tax precautions to mitigate the risks of financial penalties and ensure compliance with the tax laws in the UAE. Hence, to minimize any potential issues your company should look out for ways to reduce any tax burdens.  

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Using EmaraTax To Claim VAT Refunds

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E628B6F8 9028 46BE A462 EDB7DE0DE42F

Most small businesses in UAE generally doesn’t have any clue on recovering from a tax difference amount. When the VAT charges on the purchased goods becomes more that that of the VAT amount you get through the sales, then a problem arises. Before you start worrying on how to handle such complex situations, discover a way to log into EmaraTax platform. 

Steps for Claiming VAT Return Using EmaraTax 

Step 1: Login to your account 

Firstly, you need to enter your credentials for logging into the EmaraTax platform. Furthermore, you can also use the UAE Pass as well. Now proceed into your account and select the user type. As you’re eligible for tax under the provision of UAE VAT lax, select the Taxable person option. 

Step 2: Choosing the VAT module 

You will come across the Taxable Person homepage which will be displaying your profile. You can then click on the view option to open it. Afterwards, go on the left-side bar and click on the VAT module option. 

Step 3: Creating refund requests 

You will see two different options in front of the screen. Go and select the VAT 311 and click on “create new” for a new refund request. A new window will open letting you know about the guidelines, templates, criteria. After you have completely read and understood it, mark the check box to proceed further. 

Step 4: Verifying information 

Now you have to enter your personal information including your bank details as well. Make sure they are accurate for ensuring a smooth working process. Moreover, double-check the entire information for avoiding any grammatical errors which may lead to payment failure. 

Step 5: Refund your VAT amount 

Choose the VAT return and enter the refund amount while clicking on “Add Supporting Details” for getting a breakdown. Upload a filled template by adding additional refund details. Remember to upload your required documents and download the filed amounts for selected tax period. Finally, submit the refund request and note down the application reference number for future purposes. 

Conclusion 

The EmaraTax platform lets many businesses in UAE to file returns and apply for refunds in a convenient way. The tax difference can affect the business operations. Therefore, stop confusing yourself and make use of this great platform for claiming direct VAT returns. 

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Tax Planning: Why is it important?

business tax planning
business tax planning

Regardless of the size of your business, tax planning is crucial. Tax planning is not putting your finances aside to pay your taxes, it is more than that. Tax planning is an overview or in-depth analysis of your company’s financial position and ensuring that you are paying the least amount of taxes. It also helps you ensure that you are staying compliant with the tax regulations to avoid any penalties. Also, effective tax planning helps businesses make informed decisions that improves their company’s operations. 

Here are some benefits:

  • – Cash flow management: 

Effective tax planning can help businesses manage their cash flow by ensuring that they have sufficient funds to pay their due taxes. In this way they can estimate their tax liabilities in advance, businesses can plan for their tax payments and avoid unexpected financial crises.

  • – Reducing tax liability: 

One of the primary reasons for tax planning is to reduce a business’s tax liability. By implementing strategies such as taking advantage of tax credits and deductions, businesses can reduce the amount of taxes they owe.

  • – Compliance with tax laws:

With proper planning, businesses can stay compliant with tax laws and regulations, which can help avoid penalties from the authority. By staying up-to-date with tax laws and regulations, businesses can ensure that they are operating legally and avoid any legal complications.

  • – Better decision-making: 

Tax planning can provide businesses with valuable insights that can help them make better financial decisions. By understanding the tax implications of different financial decisions, businesses can make informed decisions that will benefit their business in the long-term.

Bottom line:

Tax planning is an important aspect for running a successful business. By reducing tax liabilities, managing cash flow, maximizing profits, complying with tax laws, and making better decisions, businesses can operate more efficiently and effectively.