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Tax Planning for Growing Businesses

As businesses grow, their tax considerations can become more complex. New branches, additional shareholders, related-party transactions, investments, acquisitions, and international operations may introduce additional requirements.

A growing company can benefit from periodically reviewing:

• Business structure
• Related-party transactions
• Intercompany arrangements
• Revenue sources
• Expenses and deductions
• Assets and investments
• Tax registration details
• Financial reporting procedures
• Documentation requirements

Early planning can make it easier to address tax considerations before major business decisions are implemented.

Tax Groups and Corporate Structures

Businesses with multiple UAE entities may need to consider whether the UAE Tax Group regime is relevant to their circumstances.

The FTA explains that qualifying UAE-resident juridical persons can apply to form a Tax Group, subject to the applicable conditions and FTA approval. A Tax Group is treated as a single taxable person for UAE Corporate Tax purposes and generally submits one Corporate Tax Return.

This can create important planning considerations for groups of related companies. However, eligibility and consequences need to be assessed based on the actual ownership structure and applicable requirements.

Free Zone Businesses

Free Zone businesses also need to carefully review their Corporate Tax position.

The UAE Corporate Tax framework includes specific rules concerning Qualifying Free Zone Persons, including requirements relating to qualifying income and other conditions. The FTA continues to issue guidance and decisions concerning Qualifying Free Zone Persons and qualifying activities.