Fortunately, there are no direct government taxes levied solely on the acquisition of a business in the UAE. This means you won’t typically pay any specific taxes solely for acquiring a business entity.
However, depending on the nature of the acquisition and the structure of the transaction, there might be other potential tax implications to consider:
- Value Added Tax (VAT): If the acquired business is registered for VAT and exceeds the annual threshold for mandatory VAT registration (currently AED 365,000), the buyer might be responsible for any outstanding VAT liabilities. It’s crucial to conduct proper due diligence to understand the VAT status and potential liabilities of the acquired business.
- Import duties and customs taxes: If the acquisition involves any transfer of assets subject to import duties or customs taxes, such as machinery or equipment, the buyer might be responsible for these taxes upon importing the assets into the UAE.
- Withholding tax: In specific scenarios, like acquiring shares in a company from a non-resident seller, withholding tax might be applicable on the sale proceeds depending on the nature of the seller and the type of shares acquired.
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