The UAE’s new tax regime will be a gamechanger in helping minimise the compliance burden for UAE businesses and boost their aspirations to expand here, a leading Dubai business setup services provider has predicted.
In a landmark move, the UAE this week announced its decision to levy a nine per cent tax on corporate profits from June 2023.
Robin Philip, director — Assurance and Business Advisory, A&A Associates has so far helped set up close to 10,000 businesses in Dubai and other emirates over the last three years feel the new measure will not only prove to be highly attractive but also competitive for the taxation rates being one of the lowest in the world.
“It is evident the UAE Corporate Tax (CT) regime has been designed to incorporate best practices globally and minimise the compliance burden for UAE businesses. It will bring more transparency overall and thus also make corporate balance sheets stronger at the end of the day,” said Philip while comparing existing corporate tax rates around the world.
According to the Washington, D.C.-based think tank Tax Foundation that monitors tax and spending policies of government agencies worldwide, Comoros has the highest corporate tax rates in the world at 50 per cent with Barbados levying the lowest corporate tax at 5.5 per cent. This was at a time when only three countries — Bangladesh, Argentina and Gibraltar –increased their corporate income tax rates last year while as many as 17 countries reduced their corporate tax rates.
“If you look at their stats, the worldwide average statutory corporate income tax rate globally, measured across 180 jurisdictions, is 23.54 per cent. Compare that with the UAE’s and you know why this is being introduced,” added Philip, who helped establish A&A’s business setup division in December 2019 buoyed by the then rising business sentiment, almost nine years after the company first began operations as an auditing and accounting firm in Al Qiyadah.
Until the end of last year the multi-ethnic, multi-national company had been helping set up as many as 150 new businesses a month on average. Starting this year, A&A Associates estimates a significant growth in that number. “We were preparing ourselves to handle as many as 400 new business setups a month anyway. That’s a growth of over 100 per cent and now after this announcement, we might have to recalibrate those projections,” said Philip, who along with his entire team, moved to a bigger office space at the iconic Rolex Tower in the heart of Dubai’s Sheikh Zayed Road just weeks ago to cater to growing demands.
“There is a genuine confidence in the belief that this is the best-in-class CT regime and when you club it with the UAE's extensive double tax treaty network, it only means one thing: UAE becomes a world-leading hub for businesses if it wasn’t already,” added Phillip. “It (the introduction of the new CT regime) will only boost aspirations of businesses to establish and expand their activities here,” he said while indicating how business enquiries have trebled over a few days.
The consultancy also recently launched a host of new services for its clients in the domain of intellectual property rights. A&A Associates also offers businesses the ability to register their trademarks, transfer trademark ownership across GCC and amend their trademarks if required.