Overview of Tax Compliance in Ras Al Khaimah
The RAK has become the top option for foreign investors, businesses, and people looking to expand internationally. This popularity results from several important features, including the simplicity of incorporation, affordable prices, and unmatched flexibility provided by this offshore location. Being free from corporate or personal income tax is a notable benefit enjoyed by offshore investors in the UAE, making it a desirable choice for those looking to maximize their financial benefits.The ease of setting up a company in the UAE is an additional remarkable feature. Contrary to many other countries, physical presence is optional, allowing people to launch offshore businesses anywhere. The UAE offers an inviting regulatory framework that combines high-level privacy protection with transparency in addition to these business-friendly aspects. This guarantees that business formation and continuing activities follow the relevant standards, fostering responsibility and confidence while preserving privacy. UAE is among the fastest-growing economies in the world and has effectively diversified its economy away from its enormous oil and natural gas supplies. Only 25% of the GDP is now dependent on natural resources, demonstrating the UAE's commitment to building a broad and robust economy.
Table of Contents
Types of Taxes in Ras Al Khaimah
- Corporate Income Tax: According to the UAE Ministry of Finance, any companies founded or operating within the UAE would be subject to a corporate tax rate of 9%. Profits made by businesses and other legal organizations are subject to corporate income tax and direct taxation. The government often levies this tax on the total income made by enterprises at a fixed rate.
- VAT: An indirect tax, known as a value-added tax (VAT), is levied on products and services based on the added value at each step of production and distribution, from the procurement of raw materials to the retail sale. On January 1, 2018, the UAE introduced VAT at the federal level. VAT is charged on providing goods and services inside the United Arab Emirates, including imports, unless they are expressly excluded or zero-rated. In the UAE, the typical VAT rate is 5%.
- Customs and Excise Duty: The UAE has implemented the GCC Customs Law, which mandates that customs tax be applied at the first point of entry into the GCC. Typically, 5% of the cost, insurance, and freight (CIF) value of imported products are levied in customs duties. Despite being inside the UAE, free trade zones (FIZs) are considered outside the customs domain. The UAE implemented an excise tax on cigarettes, tobacco products, carbonated beverages, and energy drinks as of October 1, 2017. Later, on December 1, 2019, the excise tax's coverage was extended to cover sweetened beverages, electronic smoking equipment, devices, and the liquids that go into them.
- Tourist Taxes: Most Emirates apply hotel taxes, which are determined by hotel room rents, services, and entertainment costs. Each Emirate, however, has its own unique set of regulations and methods for collecting these fees. Based on the cost of lodging services, hotels in the Emirate of RAK are liable to various taxes. These taxes comprise a 10% district fee and a 10% service charge.
- Municipal Property Tax and Real Estate Tax: An enrolling fee must be paid when you transfer ownership of land or property. This tax is equal to 4% of the total contract value. Additionally, a 4% tax, depending on the underlying asset's value, will be assessed if you transfer shares in businesses that hold land.Property owners are subject to a municipal tax in the Emirate of RAK based on the yearly rental value. This tax, often the occupier's responsibility, is 1% for residential homes (with a minimum charge of AED 300) and 5% for specific commercial buildings. The monthly service bill is used to collect installment payments for the tax.
Services offered by Enterslice
Corporate Tax Advice: We provide a broad range of corporate tax consulting services to ensure that our clientele is well-informed about and compliant with tax legislation. We resolve any tax applicability issues brought up by companies, examine transactions to identify tax scenarios and create tax-effective structures. Additionally, we detect possibilities for tax optimization and give clients regular notifications. We additionally examine how withholding taxes influence international transactions.
Assistance with Income Tax Notices: Getting an income tax notice can be stressful, but Enterslice offers experienced guidance and assistance. Our team of qualified experts helps clients interpret and respond to income tax notifications while guaranteeing complete adherence to all applicable laws and regulations.
VAT Advisory: We offer various value-added tax (VAT) advisory services. We do regular VAT health inspections to guarantee compliance. Preparing and filing VAT returns are among the services our team provides for VAT compliance. We offer assistance throughout the procedure in the event of VAT audits or disputes. In addition, we help with VAT refunds, assist tax agencies, and prepare and send voluntary disclosures, clarification requests, and reconsideration requests to the appropriate tax authorities.
International Tax Planning: Companies now confront more tax unpredictability due to the changing nature of international tax law and growing tax transparency. Our experts help customers navigate the challenging local legal and regulatory landscapes. We offer strategic advice to efficiently manage tax risks and maintain compliance with evolving legislation.
Acquisitions and Mergers: We provide expert guidance for complicated international transactions, especially during mergers and acquisitions (M&A). Our services consider the tax repercussions in local jurisdictions and seek to maximize tax benefits while guaranteeing efficient transaction execution. We proactively address tax concerns and possible complications to help those we serve during the M&A process.
Corporate Tax Compliance: Starting with tax registration, Enterslice offers a full range of services for corporate tax compliance. We determine the amount of taxes owed, prepare tax returns, and meet all required tax reporting requirements. Our team of professionals analyses the company's tax returns and aids in communication when tax authorities have concerns. Our goal is to make sure that tax rules are followed perfectly.
Assistance with R&D Tax: We assist organizations in determining their eligibility for tax advantages and credits connected to research and development (R&D) operations, including intellectual property ownership. Our services guarantee adherence to R&D tax regulations and assist in maximizing the advantages. We assist customers with their legal responsibilities while maximizing their R&D tax benefits.
Tax Compliance Advisory: We emphasize improving quality, generating strategic value, cutting costs, and lowering risks inside companies in all aspects of our approach. We support our clients as they navigate regulatory changes, decipher data for insights, and enhance compliance and planning processes. Our multidisciplinary staff helps the tax, financial, and legal departments work together effectively.
Customs and Excise Advice: We offer thorough support for issues regarding excise and customs as part of our advisory services. This covers requests for planning, judgments, and tariff determination. We assess rules of origin in the context of free trade agreements and offer recommendations on calculation, application of rules, and regulatory compliance. Additionally, our team provides advice on client risk evaluations and audits, duty disadvantages, free zone enterprises, duty deferral, and suspension plans, and post-clearance audit management. We also provide advice on supply chain management, market access policies, labeling requirements, applications for authorized economic operators, and the use of anti-dumping defenses.