Silent Killers in SPV/Prescribed Company Tax Strategy: Are You Prepared?

The United Arab Emirates (UAE) has introduced a new Corporate Tax (CT) regime, bringing both challenges and opportunities for businesses. This structured checklist outlines key considerations for Special Purpose Vehicles (SPVs) and Prescribed Companies (PresCos) to optimise their tax position.

Critical Compliance Timeline

The new Corporate Tax framework becomes effective as follows:

• Applicable from financial years starting 1 June 2023

• Businesses with a standard calendar year will first be subject to CT from January 2024

Essential Compliance Obligations

To maintain a robust and compliant tax strategy, organisations must:

• Formal Registration: Complete the mandatory CT registration process

  
  

• Record Keeping: Maintain meticulous and accurate accounting documentation

  
  

• Transaction Integrity: Ensure all transactions are conducted at arm's length

  
  

• Transfer Pricing: Develop comprehensive transfer pricing documentation

  
  

• Annual Reporting: Submit precise tax returns on an annual basis

  
  

  

Strategic Tax Relief Opportunities

Savvy organisations can leverage several key tax exemption and relief mechanisms:

Tax Transparency Provisions

Certain Foundations may qualify for exemptions, allowing individual members to avoid CT on specific income streams. This provision offers a nuanced approach to tax management for qualifying entities.

Participation Exemption

A strategic opportunity exists for organisations with:

• Eligible dividend receipts

• Qualifying capital gains

These income sources may potentially be exempt from Corporate Tax, presenting significant financial advantages.

Free Zone Incentives

Passive holding entities operating within designated Free Zones may benefit from:

• Potential 0% tax rates

• Specific conditional exemptions

• Streamlined tax treatment

Small Business Relief

Smaller enterprises may qualify for relief if their total revenue does not exceed the prescribed threshold, subject to specific criteria and regulatory guidelines.

Recommended Next Steps

✅ Conduct a comprehensive review of your current corporate structure

✅ Assess eligibility for available tax reliefs and exemptions 

✅ Develop a proactive compliance and documentation strategy 

✅ Consult with specialised tax professionals for personalised guidance

How GTAG Can Help You

At GTAG, we understand the allure of the UAE and the complexities of navigating a new business landscape. We offer a comprehensive suite of services to help you establish yourself and flourish:

• Structuring: We provide advice on the optimal business structure considering your specific needs and objectives.

  
  

• Global Tax Advisory: Our experts offer comprehensive global tax advisory services to ensure compliance and optimise tax efficiency, both corporate and personal.

  
  

• Wealth Management: Our wealth management solutions are designed to grow, protect, and preserve your wealth for the next generation.

  
  

• Family Office Setup: We offer bespoke services for setting up family offices, providing a holistic solution for managing your family’s wealth.

  
  

• Outsourced CFO Services: By partnering with GTAG, you gain access to strategic financial leadership that drives your business toward sustainable success.

  
  

• Accounting: We provide professional accounting services, allowing you to focus on your core business operations.

  
  

• Company Setup: We assist with the entire process of company setup, navigating the legal and administrative tasks.

Embrace the opportunities that Dubai offers. With GTAG as your partner, navigate the business landscape with confidence and ease.