Key Corporate Tax Terms Every UAE Business Owner Should Know

1. Taxable Person

Any corporation or individual doing business in the UAE that meets the provisions of the Corporate Tax Law is considered a taxable person. Your accounting software in Dubai should be set up to recognise and handle such entities in order to generate accurate reporting.

2. Taxable Income

The profit that remains after deducting all allowable expenses from total income is taxable income. It remains the tax liability in your company. Reliable accounting software in Dubai assists in calculating taxable income by producing accurate profit and loss accounts.

3. Corporate Tax (CT)

Corporate tax is a direct tax imposed on corporate net profits in the UAE. Introduced in June 2023, the system ensures transparency and brings the UAE in line with worldwide tax standards. Your company can easily follow CT rules if you choose accounting software in Dubai.

4. Tax Period

The fiscal year in the company, if income is established for transaction, refers to the tax period. You can generate precise annual tax reports to avoid filing errors by setting this function appropriately in your accounting software in Dubai.

5. Free Zone Person

An entity registered in a free zone in the UAE is a Free Zone Person. A 0% tax rate on qualifying income may be provided to certain Free Zone businesses. You can effectively identify and report qualifying versus non-qualifying income with the help of the most effective accounting software in Dubai.

6. Qualifying Income

Income that meets the specific conditions that allow Free Zone Businesses to benefit from a 0% corporate tax is referred to by this term. With a number of features that identify and track qualifying income, corporate tax in UAE ensures that you benefit from all needed exemptions.

7. Exempt Person

An entity or business that is exempt from corporate taxation is referred to as an exempt person. A few examples of such include government entities or qualified investment funds. Accounting software in Dubai guarantees all transactions are accurately recorded, even those of exempt firms.

8. Deductible Expenses

In order to reduce taxable earnings, deductible business expenses are recognized or can be subtracted from total income. Tally Solutions MENA software manages expense allocation automatically, in conformity with UAE deduction requirements.

9. Permanent Establishment (PE)

An overseas company's fixed place of business (such as a branch or office) in the UAE is referred to as a permanent establishment. Tax calculation depends on a determination of PE status, and accounting software in Dubai may maintain separate records for such kinds of entities.

10. Transfer Pricing

Transfer pricing ensures that related parties transact at arm’s length, or market value. Penalties can arise from noncompliance. When integrated with corporate tax modules, modern accounting software in Dubai helps with efficient accounting and management of related-party transactions.

11. Small Business Relief

Small businesses with a yearly income under AED 3 million are eligible for this special relief; this allows them to be treated as tax-exempt for a specific period of time. Businesses can easily determine eligibility and automate this calculation in corporate tax in UAE.

12. Tax Return

A tax return is a report on taxable income, deductions, and tax payable; it is submitted to the Federal Tax Authority (FTA). By generating accurate financial statements and reports, accounting software in Dubai simplifies this process.

13. Tax Group

If they meet certain criteria, a tax group allows more than one UAE-based company to submit a single tax return. Solutions such as Tally Solutions MENA, supported consolidated reporting for multiple entities and grouping, simplify compliance.