Dubai, UAE – 24 July 2024 – Nagel & Partners, a leading consultancy firm specializing in business formation, legal compliance, and tax optimization, is pleased to present an exclusive interview with Senior Partner Veronica Cabrera on the recently introduced UAE corporate tax and its potential impact on businesses operating in the region.
The New UAE Corporate Tax
In a landmark move, the UAE has announced the implementation of a federal corporate tax, set to come into effect on 1st June 2023. This significant policy change aims to diversify government revenue sources and align with international tax standards. Veronica Cabrera, Senior Partner at Nagel & Partners, provides insights into what businesses can expect and how they can prepare.
Q: What are the main aspects of the new UAE corporate tax?
Veronica Cabrera: “The new UAE corporate tax will apply to all businesses, including those in free zones that previously enjoyed tax exemptions, with certain exceptions. The tax rate is set at [specific rate], which is competitive globally. The policy includes provisions for deductions, credits, and compliance requirements that businesses need to understand thoroughly.”
Q: How will this new tax impact businesses operating in the UAE?
Cabrera: “The impact will vary across sectors. Multinational companies might face more significant adjustments due to their global tax strategies. For SMEs, the introduction of corporate tax could initially seem daunting, but it’s an opportunity to streamline operations and enhance financial transparency. Overall, businesses must reassess their financial planning and ensure compliance to avoid penalties.”
Q: What should businesses do to prepare for this new tax regime?
Cabrera: “Preparation is crucial. Businesses should start by conducting a comprehensive review of their financial and tax positions. This includes understanding allowable deductions, preparing accurate financial statements, and potentially restructuring to optimize tax liabilities. Seeking expert advice to navigate these changes can save businesses from costly mistakes.”
Q: How can Nagel & Partners assist businesses in adapting to the new corporate tax?
Cabrera: “At Nagel & Partners, we offer tailored consulting services to help businesses transition smoothly. Our team of tax experts can assist with compliance, tax planning, and optimization strategies. We provide ongoing support to ensure that businesses not only meet their tax obligations but also leverage the new system to their advantage.”
Q: What long-term effects do you foresee from the introduction of corporate tax in the UAE?
Cabrera: “In the long term, the introduction of corporate tax is likely to enhance the UAE’s global standing by aligning it with international tax norms. This move can attract more foreign investment by providing a more transparent and predictable business environment. For businesses, this means a need for greater financial discipline and strategic planning, which can lead to more sustainable growth.”
About Nagel & Partners
Nagel & Partners is a premier consultancy firm specializing in business formation, legal compliance, tax optimization, and ESG strategies in Dubai. With a proven track record of success and a commitment to excellence, we provide comprehensive support to businesses seeking to establish or expand their presence in the global market.
For more information on how Nagel & Partners can assist your business with the new UAE corporate tax, please visit www.nagelpartners.com or contact legal@nagelpartners.com
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