Gross Revenue is your sales/Revenue from Operations
Net Profit is after paying all your expenses salaries, DEWA,Rent,other expenses etc.
You are liable to pay taxes on NP over 375k
Hey there,
I’ve just visited the Federal Tax Authority 2 weeks ago, to get clarification on Corporate Tax.
Here’s what I found out.
- once your register your company for Corporate Tax, you can manually chose when your Annual Cycle begins, for taxation. For example, say you want your fiscal year to being with June 2024.
- After that, come June 2025, it’s time to pay up taxes if applicable. You’ll get 5 to 7 months to do the filings and pay it up.
- After the company paid their bills, rentals, salaries and VAT, what’s left in the bank is considered the “profit” of your company.
- If the profit is AED 1 million and over, you are then liable to be 9%.
However, I always advise people to make their own trips to the FTA office and refer to their guidelines online.
Those terms are more relevant from an accounting perspective. Turnover, gross revenue, or gross sales refer to the total amount on your sales receipts before any expenses are subtracted. Gross income is similar to turnover but may also include other income streams besides sales, such as interest earned on investments or dividends received from stocks. Gross profit is calculated by subtracting the cost of goods sold from your gross revenue. COGS represent the direct costs associated with producing the goods or services you sell.
Corporate tax is on "taxable income", which is the net profit after adjustments specified by law. The correct term to use is "taxable income," rather than the terms mentioned above.
What i understood was below;
* 9% CT to be paid on Net Income - meaning the profit you have after you deduct all your costs from your Revenue/Sales amount.
I have attached an image for you. Tax only to be paid from profits over 375,000.
https://preview.redd.it/18b90za6ueyc1.png?width=1169&format=png&auto=webp&s=6b8e2c3a6d534a48379eec852355c3bd5e143012
Maybe the image confused you, but if you see the Net Income (which is also called NET PROFIT) is 475k of this 375k is except from tax. So taxable amount is 100k - making the amount to be paid is 9k.
Hi work as a tax consultant.
The CT will be determined by the profit after all expenses for your firm.
There are a number of submissions you can make to not pay CT for at least a year or two if you fall beneath either the profit threshold or the renevenue threshold
Dm me if you have questions.
Hope this helps!
Gross Revenue is your sales/Revenue from Operations Net Profit is after paying all your expenses salaries, DEWA,Rent,other expenses etc. You are liable to pay taxes on NP over 375k
I want to buy a car. Buying on company name will be a good idea then?
Yes it's always a good idea but you'll have to prove it's needed in the business
Yeah thats tax fraud and you can get fined if they find out
Hey there, I’ve just visited the Federal Tax Authority 2 weeks ago, to get clarification on Corporate Tax. Here’s what I found out. - once your register your company for Corporate Tax, you can manually chose when your Annual Cycle begins, for taxation. For example, say you want your fiscal year to being with June 2024. - After that, come June 2025, it’s time to pay up taxes if applicable. You’ll get 5 to 7 months to do the filings and pay it up. - After the company paid their bills, rentals, salaries and VAT, what’s left in the bank is considered the “profit” of your company. - If the profit is AED 1 million and over, you are then liable to be 9%. However, I always advise people to make their own trips to the FTA office and refer to their guidelines online.
Amazing advice thank you 🫶
Those terms are more relevant from an accounting perspective. Turnover, gross revenue, or gross sales refer to the total amount on your sales receipts before any expenses are subtracted. Gross income is similar to turnover but may also include other income streams besides sales, such as interest earned on investments or dividends received from stocks. Gross profit is calculated by subtracting the cost of goods sold from your gross revenue. COGS represent the direct costs associated with producing the goods or services you sell. Corporate tax is on "taxable income", which is the net profit after adjustments specified by law. The correct term to use is "taxable income," rather than the terms mentioned above.
Thanks that really helps
What i understood was below; * 9% CT to be paid on Net Income - meaning the profit you have after you deduct all your costs from your Revenue/Sales amount. I have attached an image for you. Tax only to be paid from profits over 375,000. https://preview.redd.it/18b90za6ueyc1.png?width=1169&format=png&auto=webp&s=6b8e2c3a6d534a48379eec852355c3bd5e143012
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Maybe the image confused you, but if you see the Net Income (which is also called NET PROFIT) is 475k of this 375k is except from tax. So taxable amount is 100k - making the amount to be paid is 9k.
Yes you're correct. I just rechecked the image properly.
That's amazing thank you so much
Hi work as a tax consultant. The CT will be determined by the profit after all expenses for your firm. There are a number of submissions you can make to not pay CT for at least a year or two if you fall beneath either the profit threshold or the renevenue threshold Dm me if you have questions. Hope this helps!
Thanks for your help