This is a booming era for the United Arab Emirates thanks to the economic stability. Therefore, from the lottery licensing to the digital nomad residency, things are transforming for the good. Ease in taxation and reporting, like UAE corporate tax in the is creating new financial opportunities as of 2024.
UAE authorities are fighting the financial crimes, by enforcing the anti money laundering and anti terrorism financing measures. Both the businesses and individuals have to know the filing procedure of the corporate tax in the UAE. Business consultancy and audit firms in Dubai can help you in the registration for taxation big time.
United Arab Emirates is following the rules for global trade set by the Organisation for Economic Co-operation and Development (OECD). Implementation of corporate tax in the UAE is solidifying its position as a hub for international trade and investment. Also, the UAE government is implementing the regulations of the Financial Action Task Force (FATF).
UAE corporate tax registration process on EmaraTax portal
Businesses and juridical persons meeting the criteria by the Federal Tax Authority (FTA) must register for corporate tax in UAE. Finalize your annual accounting records and prepare the necessary documents. Create an account on the EmaraTax portal to become a taxable person, and follow this step-by-step process.
Now, we look upon these steps of filing the corporate tax in the UAE.
Entity Details
The smart form simplifies entity registration by providing pre-populated fields to avoid errors and ensure accurate information. It allows selecting the appropriate entity type and sub-type, from the two options. However, it currently only allows registration for the two options.
- Legal Person – UAE Public Joint Stock Company
- Legal Person – UAE Private Company (incl. an Establishment)
You have to follow these steps.
- Log in to the official website for accessing the EmaraTax portal.
- Choose your desired taxable person (natural person or a legal person), and select an existing entity from the list.
- Access the “Corporate Tax Tile” on the “Taxable Person Dashboard” and click on “Register” on the “Corporate Tax Registration” bar.
- Review the “Instructions and Guidelines Page”, which outlines eligibility criteria, necessary documents, and key information for the accurate application.
- Click on “Start” to begin the process, and provide company details and documents, to support the information in the application.
- Eligible file types for the supporting documents are PDF, DOC, and DOCX, with a size limit of 15MB.
- Save your application as draft (so that you can return to it later to make any necessary changes).
- After completing all mandatory fields, click “Next Step” to save and proceed further.
Identification Details
In this section, the Registration Assistant allows users to easily upload their Main Trade License details. For example, commercial name, license number, issuing authority, issue date, expiry date. Also, it includes legal name in English and Arabic, and trade name in English and Arabic.
Meanwhile, in the second sub-section, you need to provide a brief description of the primary business activities. For instance, Main Industry, Main Group, Sub-Group, Activity, and Activity Code, and whether owner(s) hold more than 25% of ownership. Moreover, it mentions any branches of the foreign parent company operating within the UAE.
Contact Details
To obtain a trade license in the UAE, provide the complete contact information of your business. It includes country, building name, street, area, city, and preferable contact details (mobile number, landline number, email address). In case, you are a natural person, provide your house address details matching the trade license information.
Authorized Signatory
This registration shortcut simplifies the process of uploading all such necessary information, contact details, and documents for an authorized signatory.
- First and last name
- Mobile number or landline number
- Email address
- Passport(s) of the owner(s) who own at least 25% of the shares
- Copy of the front and back side of the valid Emirates ID for the UAE residents
- Source of authorization, such as a power of attorney or memorandum of association
Review and Declaration
Ensure all information given is complete and accurate, by making all necessary corrections or additions. Once fully satisfied, submit your registration details through the EmaraTax portal. You will receive a confirmation message or notification, signalling your registration is successfully done.
Eligibility criteria for UAE corporate tax for businesses
United Arab Emirates requires businesses, local/foreign judicial persons, and natural persons taking part in business to register for corporate tax. Natural persons with taxable income over AED 375,000 are subject to a 9% corporate tax rate in the UAE. Whereas, those natural persons earning less than 375,000 Dirhams are exempt from the corporate tax in the UAE.
You get a tax registration number after the approval of the application. Corporate tax returns are due for filing within nine months of the effective end date. Exempt cases from the corporate tax have to file the returns on the 0% rate with the FTA.
Read further: Freelancers’ guide about corporate tax in UAE
Necessary documents for registering UAE corporate tax
You need to complete the legal paperwork and submit these documents for filing corporate tax in the UAE.
- Emirates ID
- Photocopy of the passport
- Contact information of the concerned person
- Copy of the trade license
- Company contacts details, address and P.O. details
- Memorandum of Association (MOA) or Power of Attorney (POA)
- Annual financial audit report
Additional documentation requirements may apply depending on the company’s structure, or if it is a foreign company.
UAE corporate tax registration deadlines to avoid fines
Businesses must take note of the UAE corporate tax registration deadlines of 2024. The Federal Tax Authority (FTA) of the United Arab Emirates has given a reminder to enterprises in this regard. It is part of the FTA’s efforts to streamline tax administration and ensure compliance in the UAE’s corporate sector.
UAE Cabinet’s Decision No. 3 of 2024 outlines the application submission timeline for registration of taxable persons for corporate tax. It does so as per the Article 51 of the Corporate Tax Law of the UAE. Juridical persons have to register for corporate tax according to the months they get approval of business licenses.
Timelines of corporate tax registration for UAE resident companies
What are the corporate tax registration timelines for UAE resident companies?
UAE corporate tax registration deadlines are dependent on the original month of the resident company incorporation. It ensures consistency for businesses in the UAE which are established in the same months. These are the timelines of corporate tax registration for UAE companies built by resident juridical persons.
| Company License Issuance Month | Corporate Tax Registration Application Deadline |
|---|---|
| January or February | 31 May 2024 |
| March or April | 30 June 2024 |
| May | 31 July 2024 |
| June | 31 August 2024 |
| July | 30 September 2024 |
| August or September | 31 October 2024 |
| October or November | 30 November 2024 |
| December | 31 December 2024 |
Remember, the year of the licence issuance is irrelevant. Also, the date of earliest issuance holds significance in the case of multiple licences.
Deadlines of corporate tax registration for non resident juridical persons
Which are the deadlines of corporate tax registration for non-resident juridical persons?
Timelines of the non-resident juridical persons are dependent on their status in the UAE. They can determine their status on the existence of their Permanent Establishment (PE) or the nexus. Accordingly, they have to follow this timeline to submit the tax registration applications with the FTA.
| Categories of Non Resident Juridical Persons | Timeline to apply for Corporate Tax Registration |
|---|---|
| Person having a PE before 1 March 2024 | 9 months from the date of existence of the PE |
| Person having a Nexus before 1 March 2024 | 3 month starting from 1 March 2024 |
| Person having a PE on or after 1 March 2024 | 6 months from the date of existence of the PE |
| Person having a Nexus on or after 1 March 2024 | 3 months from the date of establishment of the nexus |
Time-frame of corporate tax registration for natural persons
What is the time-frame of corporate tax registration for natural persons in the UAE?
Natural persons performing business activities in the UAE exceeding the AED 1 million threshold have to register for corporate tax. Also, its terms are dependent on their residency status in the UAE. Eligible natural persons have to submit tax registration application to the FTA as per these deadlines.
| Categories of Natural Persons | Deadline to apply for Corporate Tax Registration |
|---|---|
| Resident Persons | 31 March of the year where business activities took place |
| Non-Resident Persons | 3 months from the date of becoming subject to tax |
Penalties and fines on UAE corporate tax violations
How much is the penalty on not registering for the UAE corporate tax?
Businesses in the UAE face a fine of AED 10,000 for non-compliance with corporate tax registration. This penalty underwent enforcement starting from 1st March 2024. UAE Cabinet’s Decision No. 10 of 2024 empowers FTA to impose this hefty penalty (equaling to USD $2,722).
A penalty of AED 1000 to AED 10,000 applies on the late corporate tax filing in the UAE for the first time.
Know More: Taxes in the UAE
Conclusion
UAE’s federal tax authority approves, rejects, or requests re-submission of a corporate tax registration application after the filing. The tax regulatory authority of the UAE sends an email notification, if additional information is necessary. FTA duly informs the applicant and updates the application status on the dashboard.
Business consultancy firms in Dubai provide corporate tax registration services to help companies comply with the UAE laws. By utilizing these services, businesses can minimize legal risks, maintain compliance, and efficiently negotiate tax difficulties. Connect with KWS Middle East to ensure proper UAE taxation, regulatory reporting, and prevention of financial penalties.
Author bio
