ServicesTaxation and Compliance Regulations in the UAE

1. Ministry of Economy Cabinet Resolutions on Ultimate Beneficial Ownership (UBO)

The Cabinet Resolution No. 58 of 2020, issued by the Ministry of Economy, addresses the transparency of
business ownership in the UAE. It mandates that all companies disclose their UBOs to combat money laundering
and terrorist financing.

Key Aspects:

Definition of UBO: A UBO is any individual who ultimately owns or controls a legal entity. Companies must disclose
this information to enhance the transparency of ownership structures.

Compliance Requirements: Companies must maintain a register of their UBOs and ensure that this information is
current and accurate.

Penalties: Non-compliance can result in fines and other sanctions, emphasizing the importance of adherence to this
regulation.

For comprehensive details on UBO regulations, refer to the Ministry of Economy.

2. goAML System

The goAML (Anti-Money Laundering) system, developed by the UAE Financial Intelligence Unit (FIU), provides a platform for reporting suspicious financial
activities and enhancing compliance with AML regulations.

Key Features:

Mandatory Reporting: Financial institutions and designated non-financial businesses must report suspicious transactions and activities through goAML.

User-Friendly Interface: The system is designed to facilitate the submission of reports, making it easier for businesses to comply with regulations.

Data Protection: goAML ensures the confidentiality of information submitted, protecting the identities of those reporting suspicious activities.

The goAML system is a critical tool in the UAE’s efforts to combat financial crimes. For more information, visit the goAML website.

3. Federal Tax Authority (FTA) Regulations

The Federal Tax Authority (FTA) is responsible for implementing and enforcing tax regulations in the UAE, which include corporate tax, VAT, and excise tax.

A. Corporate Tax

Introduction of Corporate Tax: A corporate tax rate of 9% on profits exceeding AED 375,000 was implemented starting June 1, 2023, making the UAE's tax landscape more competitive while aligning with global standards

Tax Residency: Companies must determine their residency status, as this affects their tax obligations.

B. Value Added Tax (VAT)

VAT Overview: The UAE introduced a VAT of 5% on most goods and services in January 2018. This tax is a significant source of revenue for the government.

Registration: Businesses with taxable supplies exceeding AED 375,000 must register for VAT. Companies with supplies of less than this amount can register voluntarily.

C. Excise Tax

Scope of Excise Tax: This tax applies to specific goods that pose health risks, including tobacco products and sugary drinks. The rates are set at 100% for tobacco and 50% for sugary beverages .

Compliance Requirements: Companies involved in the production or importation of excise goods must register with the FTA and comply with reporting requirements.

For detailed guidelines on tax regulations, visit the Federal Tax Authority.