Corporate Tax Registration in UAE

With top-tier corporate tax services, Taxfix ensures a timely and professional corporate tax registration in UAE in alignment with the new UAE CT regime. Understanding the corporate tax law and its registration procedures is crucial for any UAE business. Here’s a guide to help you through.

As most are aware, the UAE’s Ministry of Finance introduced the Corporate Tax in 2022, set to be in full effect by June 2023, influencing the financial years of companies or businesses. Consequently, audit firms in Dubai and tax consultants across the UAE have commenced offering Corporate Tax Advisory and Implementation Services for businesses. The UAE’s Corporate Tax system stringently adheres to the best global practices and OECD (Organization for Co-operation and Economic Development) regulations to mitigate business compliance risks.

Registration for Corporate Tax in UAE

According to the FTA’s Federal Decree Law 47, every taxable entity, including those in Free Zones, must register for Corporate Tax and secure a Registration Number. The Federal Tax Authority also emphasized that Exempted Persons should also register for Corporate Tax.

Taxable entities are obligated to file Corporate Tax returns for a specific Tax Period within nine months from that period’s conclusion. This deadline usually coincides with the payment of all due Corporate Taxes for the tax period under consideration.

Exceptions, as defined by the Minister, demand specific individuals to register for Corporate Tax with the Federal Tax Authority within a stipulated timeline.

The Authority mandates that Taxable Individuals or Independent Partnerships must register for Corporate Tax and obtain a Tax Registration Number. The Tax Authority’s unique decision on Corporate Tax Registration comes into play from the day an individual becomes a Taxable Person.

Upon completion of corporate tax registration, taxable entities are liable to a standard Corporate Tax rate of 9% on incomes exceeding AED375,000, while incomes up to AED375,000 are levied at 0%.

Need for Corporate Tax Registration in UAE

The UAE government and the Ministry of Finance have structured tax laws and frameworks beneficial for companies that adhere to corporate tax regulations. Entities subjected to corporate tax can leverage several advantages:

1. Compliance with tax laws and updates.
2. Identification of malicious tax practices.
3. Adherence to global tax standards.

Corporate Tax registration also serves to optimize post-tax revenue of companies, in turn benefiting shareholders. This impacts not just direct shareholders but also indirect ones via private pensions or investment funds.

Payments made under corporate tax offer business owners more benefits compared to individually incurring additional income tax.

Who is Exempt from UAE Corporate Tax?

Though the Federal Tax Authority advises Exempted Persons to register for Corporate Tax, such businesses are subject to a 0% corporate tax rate.

Several categories are exempt from Corporate Tax:

1. Employee salaries aren’t impacted by Corporate Tax unless the individual earns from activities under a freelancing license, subjecting them to company tax.
2. Dividends, capital gains, or incomes earned by personal potential from shares or similar assets.
3. Legal real estate investments in the UAE, provided the investor lacks a business license.
4. Intra-group transactions or reorganizations aren’t affected by Corporate Tax.
5. Corporate Tax isn’t levied on a foreign investor’s income from dividends, gains, royalties, and similar returns unless acquired through business activities.

If you own a UAE business, ensure you check whether your entity is exempt from corporate tax.

Who Should Register for Corporate Tax?

All Taxable entities, including those in Free Zones, should register for Corporate Tax and procure a Registration Number.

UAE Law for Corporate Tax defines conditions for tax registration, namely:

• Mandatory Registration
• Registration at FTA’s discretion

If your business falls under the Corporate Tax policy’s taxable bracket, ensure you apply for UAE Corporate Tax registration. Following registration, secure a Tax Registration Number within the specified period. Taxfix’s tax consultants facilitate businesses in streamlining the Corporate Tax registration process.

The Federal Tax Authority mandates certain individuals, such as Exempt persons and independent partnerships, to register under the Corporate Tax policy and secure the Tax Registration Number.

Timeline for Corporate Tax Registration

The registration process commences in early 2023. For businesses initiating their tax period from June 2023, registration should be completed by January 2023. The return filing deadline is February 2025. Post-registration, UAE businesses have a grace period of nine months from the relevant tax period’s end to file their returns to the Federal Tax Authority and make the Corporate Tax payment.

Why Corporate Tax Assessment is Necessary Before Registration?

Prior to and following corporate tax implementation, businesses should assess potential risks and legal implications. By doing so, they ensure compliance with the nation’s tax regime. Absent a thorough Corporate Tax assessment, businesses risk incurring fines and penalties. Pre-corporate tax assessments encompass impact evaluations, document assessments, and tax compliance checks. Engaging with professional corporate tax consultants or firms that provide comprehensive Corporate Tax assessment services is highly recommended.

Corporate Tax Registration Services

Taxfix boasts a team of highly skilled and experienced tax consultants specializing in Corporate Tax registration. Our tax advisors provide impeccable services during the Corporate Tax registration process.

Fully cognizant of the significant shifts due to Corporate Tax implementation, early preparations for corporate tax compliance can yield cost savings and reduce potential stress. With Taxfix’s team’s vast expertise and experience, seamless and smooth transitions are guaranteed.

Taxfix keeps you abreast with updates on Corporate Tax Registration and CT return filings, ensuring you stay compliant with regulations and avoid any penalties.