Newsflash: Key Updates to ADGM and DIFC Requirements and UAE Corporate Tax
Operating in the ADGM or DIFC? Make sure to stay on top of your ongoing compliance and tax obligations.
What’s going on?
- ADGM and DIFC Penalties: Failure to meet requirements can result in penalties up to USD 15,000 for ADGM and USD 25,000 for DIFC (maintenance of accounting records). Additionally, a late submission of audited financials for DIFC can attract a penalty of USD 1,000.
- UAE Corporate Tax: As a reminder, all UAE businesses, including free zone companies, must register for Corporate Tax and submit an Annual Corporate Tax Return. Failure to meet requirements as a Qualifying Free Zone Person (QFZP) can result in loss of tax-free status for 5 years and 9% corporate tax on taxable profits.
- Tax Transparency: We are excited to share that Tax Transparency is available for eligible entities. If conditions are satisfied, you may be exempt from Corporate Tax and have reduced administrative requirements.
- Accounting Standards: For UAE Corporate Tax purposes, financial statements must be prepared in accordance with IFRS for entities with sales > AED 3m, Simplified IFRS for entities with revenue not > AED 50m, or cash basis for entities with sales < AED 3m.
- Corporate Tax Implications for 2023 Accounts: Although full Corporate Tax provisions only apply to financial years 2024 and onwards, Transfer Pricing and Transitional Rules also apply to 2023. The FTA may request Financial Statements to be submitted in a specific form, manner, and timeline, which may include the 2023 accounts.
Our guidance and support
- Compliance with ADGM and DIFC requirements
- Registration for Corporate Tax and submission of Annual Corporate Tax Return
- Eligibility for Tax Transparency and application process
- Preparation of financial statements in accordance with UAE Corporate Tax regulations
Our recommendations
- Review your financial statements to ensure compliance with UAE Corporate Tax regulations
- Register for Corporate Tax and submit an Annual Corporate Tax Return
- Review your eligibility for Tax Transparency and apply if eligible
- Prepare your financial statements in accordance with UAE Corporate Tax regulations
If you have any questions or concerns, please do not hesitate to reach out to us. We are here to support you every step of the way and ensure your business remains compliant with all relevant regulations. Thank you for entrusting us with your business needs. We look forward to continuing to support your growth and success.
Who we are
M/HQ is a multi-services platform catering to financial institutions as well as single family offices and sophisticated private investment companies. Our one-stop-shop offering is unique in the Middle East: a holistic and cross-disciplinary blend of a leading corporate services firm, a private client specialist team, and a regulatory & compliance services practice, all through one single platform.
We have extensive experience advising on a broad range of wealth structuring and legacy planning issues. We particularly assist in establishing and servicing Family- and Group- Holdings, Single- and Multi- Family offices, Foundations, and other asset consolidation/protection and intergenerational wealth management structures. For financial institutions, we provide tailored solutions that address complex regulatory and compliance requirements, ensuring that operations are both secure and efficient.
Headquartered in the UAE, we are an entrepreneurial firm for entrepreneurial clients.
