UAE Corporate Tax: Why businesses should take action now

It has been 6 weeks since Corporate Tax was implemented in the UAE. Although there have been various Cabinet Decisions released that give further clarity to the legislation/regulations we still expect further legislative decisions to be released, particularly surrounding the Free Zone regimes and the implementation of the OECD Pillar Two (global minimum tax rate).

Businesses and taxable persons should not wait for this further clarification, but should seek tax advice now to ensure they are fully aware of how corporate tax will affect them ahead of their first taxable period. Advice should also cover how they meet their compliance obligations under the new regime.

At Sanctuary, we provide our clients with tailored advisory reports, taking into account their specific circumstances and what they can do to mitigate their taxable exposure. With a team of UK-qualified tax advisers with nearly 100 years of advisory experience, we pride ourselves on our holistic approach and aim to be our clients’ first choice of adviser for all aspects of their business affairs and wealth protection.

How we helped a UAE-based family with their multi-jurisdictional business

We were approached by a UAE-based family who operate a large multi-jurisdictional business spanning a number of countries including the UAE and the UK. With the onset of UAE Corporate Tax and other legislative changes, the existing structure was no longer tax efficient nor suitable for commercial expansion.We also established that there was a potential UK Inheritance Tax exposure that the family was not aware of when first contacting us for support.

After various discussions to identify the family’s objectives and longer-term intentions, we provided a comprehensive written report that detailed how they would be impacted by the new UAECorporate Tax regime, highlighted their current tax exposure, and provided possible solutions as to how these could be mitigated. Our advice considered potential future expansion, as well as the forthcoming Pillar Two global minimum tax rate, which will soon be implemented in 136 jurisdictions worldwide.

At the same time as advising on corporate tax we also considered other types of structures, such as UAE Family Foundations, that would allow the family to protect their assets and to facilitate their succession plans to pass on their personal assets and wealth intact to future generations.

If you would like any assistance with UAE Corporate Tax, or your wider financial affairs, please do get in touch today.

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