Tax Benefits for Prescribed Companies in the UAE

At NH Management, we understand the critical role that tax incentives play in the success of prescribed companies in the UAE. The UAE offers a highly favourable tax environment to attract foreign investment and promote economic growth. In this article, we’ll look in-depth at the tax benefits available to prescribed companies in the UAE, helping you understand how these incentives can enhance your business operations.

Prescribed companies in the UAE enjoy various tax benefits that significantly reduce their financial burden, enhance profitability, and promote business growth. These benefits are part of the UAE’s strategy to create an attractive business environment and stimulate economic diversification.

Corporate Tax Exemptions for Prescribed Companies in Dubai

One of the most attractive tax benefits for prescribed companies in the UAE is the exemption from corporate tax. The UAE does not levy a federal corporate tax on most business sectors, which allows companies to retain a larger portion of their earnings.

• No Federal Corporate Tax: Unlike many other countries, the UAE has no federal corporate tax, allowing companies to maximize profits.
• Sector-Specific Exemptions: Certain industries, such as oil and gas, may have different tax structures, but prescribed companies in other sectors typically benefit from full corporate tax exemptions.

Value Added Tax (VAT) Benefits

Introduced in 2018, VAT in the UAE is set at a relatively low rate of 5%. However, prescribed companies can benefit from various VAT-related incentives:

• Zero-Rated VAT: Export-oriented prescribed companies often qualify for zero-rated VAT on their goods and services, effectively exempting them from VAT.
• VAT Refunds: Companies engaged in specific sectors may be eligible for VAT refunds, further reducing their tax liabilities.

Customs Duties Exemptions

Prescribed companies operating in the UAE enjoy significant advantages related to customs duties, especially those involved in international trade:

• Duty-Free Import and Export: Companies based in free zones can import and export goods without paying customs duties, enhancing their cost competitiveness.
• Reduced Duties for Certain Goods: Even outside free zones, prescribed companies may benefit from reduced customs duties on specific goods and materials.

Free Zone Tax Incentives

The UAE’s numerous free zones offer prescribed companies additional tax incentives that make them highly attractive for business operations:

• 100% Foreign Ownership: Unlike mainland companies, free zone entities can be wholly foreign-owned, offering greater control over business operations.
• Guaranteed Tax Holidays: Many free zones provide tax holidays ranging from 15 to 50 years, ensuring long-term tax stability and savings.
• No Import or Export Taxes: Free zone companies are entirely exempt from import and export taxes, significantly lowering operational costs.

Unravel Full Tax Benefits for Prescribed Companies in UAE with NH Management

The tax benefits available to prescribed companies in the UAE are extensive and designed to foster a conducive business environment. From corporate tax exemptions and VAT benefits to customs duties exemptions and free zone incentives, these advantages make the UAE an ideal destination for business setup and growth.

At NH Management, we are committed to helping you navigate these tax benefits to maximize your business potential. Contact NH Management today for personalized guidance and expert advice on leveraging tax incentives for prescribed companies in the UAE.