UNITED ARAB EMIRATES

UNITED ARAB EMIRATES2017-04-30T20:15:30+00:00

International Activities in Various Jurisdictions

We offer to assist national and global clients alike while carefully building our international reach on an extensive network of leading law firms throughout Europe and in the international community with whom we interact closely to provide our clients integrated solutions to multi-jurisdictional matters.

We accompany our clients alike, whether you are an individual, a non-profit organization or company, where the economies blossom and boom and in particular in Eastern Europe, Middle and Far East. We also suggest focused trainings, language lessons, longer and deepened cultural immersions and any other types of accompaniment if we find it useful  for the development of your expansion.

United Arab Emirates: single Tax Optimization Method

1. Quotes

« You, the people have the power (…) the power to create happiness! You, the people, have the power to make this life free and beautiful, to make this life a wonderful adventure.

Let us fight to free the world, to do away with national barriers, to do away with greed, with hate and intolerance. Let us fight for a world of reason, a world where science and progress will lead to all men’s happiness »

Charlie Chapin, The Great Dictator, 1940.

An EU entrepreneur may therefore express her faith in the business community and her role as manager as follows :

  • Our businesses’ perspective as EU entrepreneurs is that planning is an integral part of business activity and, as tax is a cost to the business, tax planning is a legitimate business activity and is not necessarily aggressive.
  • We are therefore enticed to apply solutions that are 100 pc compliant and make full use of the large range of Double Tax Treaties (DTT) that the OECD countries signed.
  • Companies and Individuals may thus opt to be taxed in the Emirates and contribute to wealth creation and adding value to the society in a tax favorable climate“.

2. A unique “TOM”

The Tax Optimization Method (TOM) developed especially for attractive business communities as the GFF countries is unique in that it is based on 4 steps precisely defined as the “4W’s”:

  • Where (in the world) should I pay my company or individual taxes ?
  • What (Income Tax) should I or my enterprise pay ?
  • Which (of the 4 taxable incomes from the individual income tax) should I pay ?
  • Who  bears the costs (the company or the individual)?

2.1. Where (in the world)?

Local or International companies based in the UAE deliver goods or render services to EU companies whose entrepreneurs are also active in the UAE or directly to their customers.

The agreement between the kingdom of Belgium and the United Arab Emirates for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and on capital dates back to the 30th of September 1996.

It has more legal value than Belgian or UAE laws and must be therefore be strictly applied by any officer of the Belgian tax authorities.

This means that an employee of a United Arab Emirates company can only be taxed in the Emirates as long as a resident company pays him.

The services provided by local or international enterprises are the most diverse and best meet the needs of our companies active in Belgium:

  1. Advice, consultancy and assistance to businesses
  2. Legal advice
  3. Business accounting and finance management
  4. Tax plus social security advices and optimizations
  5. Tips for business and management
  6. Public Relations Offices
  7. Management activities
  8. Activities of head offices and management consulting
  9. Technical consulting and engineering
  10. Investment advice, asset management, mergers and acquisitions
  11. Management and structuring of business assets
  12. Family Office
  13. Finance and cash management
  14. Financial transactions (IPO, OPA, OPE, OC, OBSAR.)
  15. Partial or total management of investments in listed and unlisted companies
  16. Valuations of companies
  17. Domestic or international transactions implying SMEs
  18. Operations on a wide range of sectors including industrial and commercial enterprises, information technology, financial services, real estate and the luxury sector
  19. Technical Studies
  20. Technical testing and analysis
  21. Advertising and market research
  22. Marketing and communication
  23. Coaching and personal and professional development
  24. Organization of events
  25. Secretariats
  26. Translation services and interpreters
  27. Administration activities
  28. Investigation and security activities in different areas of business activity
  29. Activities of scientific research and development
  30. Organization of trade fairs, exhibitions and scholarships
  31. Business center
  32. Impresarios and Cultural Agencies
  33. Human Resource Management
  34. Operational cost reduction
  35. Professional, scientific and technical services, such as design and design
  36. Activities of agencies of labor and temporary employment
  37. Office administrative services and other business support activities
  38. IT Services
  39. Business intelligence
  40. Risk analysis

Why not also take the opportunity of your presence in the UAE to help you discover:

  • The Emirates
  • Their infrastructure at the forefront of technology
  • Their dynamism and openness/entrepreneurship
  • Their locals and expats
  • Their economies and entrepreneurs
  • Their intellectuals and university professors
  • Their artists
  • Their experiences of well being and personal development
  • International Tax and Social Security Optimizations in Belgium and the UAE “for non-lawyers”.

The United Arab Emirates will not be implementing any corporate or personal income taxes for at least another two years, and proposals to institute a Value Added Tax system are equally far off into the future. http://www.taxationinfonews.com/2012/04/no-income-taxes-in-the-uae & http://www.mof.gov.ae/en/Pages/default.aspx

The UAE have entered into 55  Tax Treaties to prevent double taxation : http://www.mof.gov.ae/En/Publication/Pages/doubletaxationavoidanceagreements.aspx

2.2. What (Income Tax)?

  1. Not-for profit income tax ?
  2. Corporate Income tax ?
  3. Individual Income tax ?
  4. Non-resident income tax ?

Each tax regime has its own taxpayers, taxable base and ways to calculate the final tax due. One should definitely not immediately “jump” to only one regime, say the Corporate Income tax, but also consider the others.

2.3. Which (of the 4 taxable incomes from the individual income tax)?

  1. Movable Income
  2. Professional Income
  3. Immovable Income
  4. Other Income

Each income has its own elements, tax rates and are either tax distinctively or globally with the others. Let us also not forget that professional incomes only are accompanied by social security contributions!

2.4. Who (company or individual)?

A Belgian company always deducts its professional expenses from its taxable income. Professional expenses’ role is to acquire or maintain taxable income.

This is the simple principle of taxation on net income (Gross – deductible business expenses) that can be found under section 6 of the Belgian Income Tax Code:

“Taxable income consists of the total of net incomes, minus deductible expenses.”

The Belgian tax administrations and income tax codes reject more and more professional costs.

3. 100% Compliant

Foreign “management” companies offer solutions often playing with fictitious services and payments “off-shore” unreported in the country of residence of the individuals.

These solutions are illegal and have to be abandoned.

Based on international treaties between Belgium and the UAE, tax optimization solutions are totally legal.

Revenues obtained in the Ajman Free Zone Company for instance by a local company are not taxable in Belgium (in the absence of permanent establishment) and its employees and officers are not taxable in Belgium either.

4. What about Wealth+Health?

In addition to the benefit for EU companies receiving services with high added value that are also fully tax deductible, our local companies and their directors/executives or employees have expanded their activities internationally.

The directors, executives or employees join a business community particularly active, dynamic and at the forefront of new technologies. They enjoye useful services for their company growth and expansion.

Our local partners also aim at reconciling business, tax and personal and professional development by asking this question:

“Can International Tax and Social Security optimizations create new wealth, consciousness of new worlds and added values that enhance our well-being, empathy and life balance?”

And therefore strive to go one step further: “Wealth for Health and Personal and Professional Progress.”