Tax and accounting regulations
There is no federal tax legislation in the UAE, each emirate has its own tax law. Only oil, gas and petrochemical companies are required to pay taxes.
Below is an overview of the tax and accounting regulations in RAK:
RAK Tax System:
- Income Tax – 100% Income Tax exemption
- Value Added Tax (VAT) – There is no VAT in the UAE
- Capital Gains Tax (CGT) – There is no Capital Gains Tax in the UAE
- Corporation Tax – 100% Corporation Tax exemption
- Taxation of Dividends -Profits derived from dividends are taxed only in the state from which the income was earned. Dividend income paid by a UAE company to another company which has a double taxation treaty with the UAE may not be taxable in the foreign company even though no tax was paid in the UAE
- Taxation of Royalties – Profits derived from royalties are taxed only in the state from which the income was earned.
- Taxation of Interest – Profits derived from interest are taxed only in the state from which the income was earned.
- Withholding Tax – No Withholding Tax applicable
- Capital Duties – 100% Capital and Profit repatriation
- Import / Export Taxes – No import or export taxes
- Net Worth Tax – No Net Worth tax
International Aspects of Taxation:
- RAK has rapidly gained a reputation for being a tax free, transparent jurisdiction and it is of paramount concern that the reputation of RAK is not tainted by money laundering or any other illegal practices therefore anti-avoidance regulations are enforced.
System of Double Tax Treaties:
- The UAE has over 40 Double Taxation Treaties in place.
- As the UAE has no taxes, double taxation treaties are aimed at making the UAE a more attractive territory in which to operate by reducing taxation levied in foreign jurisdictions on profits remitted abroad by foreign entities operating in the UAE.
- RAK currently has a DTTA with the following countries: Austria, Belarus, Canada, Czech Republic, Egypt, Finland, France, Germany, India, Indonesia, Italy, Lebanon, Malaysia, Malta, Morocco, New Zealand, Pakistan, Poland, Romania, Singapore, Sudan, Thailand, Tunisia, Turkey and Ukraine.
Annual Reporting Requirements:
- Accounting records must be kept for 7 years from the date on which they were prepared.
- Accounts are required to be approved and signed by the directors but there is no requirement for accounts to be filed with the RAK authorities.
- No audit is required.
A coherent offshore tax planning strategy is essential to maximize the effectiveness of offshore companies. Eltoma can assist by structuring the most tax efficient strategy to satisfy your requirements. Eltoma will guide you as to which jurisdictions offer the best tax structure by identifying the types of tax payable as well as applicable exemptions and incentives. Eltoma will provide tax planning advice that will identify which is the most favourable tax efficient jurisdiction in which to incorporate.
The Investigation of a Cyprus Company's Affairs: Application of the Law & Effectiveness
At the request of a Cyprus company’s Shareholder, where it is proven that a more comprehensive investigation is required regarding a company’s activities, the court can issue a declaration of investigation by an inspector appointed by the Cyprus Council of Ministers. The discretion of the court must be applied carefully; as such an order can heavily impact a company and depending on the outcome of the investigation, can be a severe measure that deviates from fundamental principles of Cyprus company law.
UK: The Current Problems with Money Laundering & the Violation of Anti-Money Laundering Regimes
The fact that money can be transferred from one jurisdiction to another means, that money laundering as a concept involves the entire modern world. Money laundering is a process during which the origin and purpose of payments are hidden and typically has three stages.
Director’s Duties & Liability Insurance in Cyprus
This article will examine the role of a Director and his duties and liability insurance and D&O insurance liability accordingly with reference to the relevant case law.
Q&A: Singapore Small Company Concept for Audit Exemption
The following article will answer some commonly asked questions regarding Singapore small company auditing requirements and exemptions from ACRA.
Exemption from Audit: Singapore Small Company Criteria
Singapore Audit Requirements: running a company in most countries require auditing as a process to prove that everything is operating legitimately. Listed companies have a legal responsibility to go through audit in Singapore similarly.
EU: Cyprus Competitive Advantage at Risk with Tax Consolidation Reforms
Cyprus is likely to have repercussions as a result of Jean-Claude Juncker ’s favouring of a relaxation in EU regulation formation and monitoring schemes, reinforced by qualified majorities on matters including the additional synchronisation of blanket taxation rates across Europe.
Singapore Service Providers: How to Comply with the ACRA Reporting Requirements
As a result of the ACRA Amendment Act in 2014, Registered Filing Agents and Corporate Service Providers now have to conduct independent Anti-Money Laundering / Countering the Financing of Terrorism (AML/CFT) reviews as part of their annual audit reviews.
Beginners Guide to Service Level Agreements: Important Information & Q&A
SLAs are a critical component of any outsourcing and technology vendor contract. Beyond listing expectations of service type and quality, an SLA provides remedies when requirements aren't met.