Corporate Tax Registration
Corporate tax registration refers to the process of registering a business entity for taxation purposes with the relevant tax authorities.
Corporate Tax Registration
Corporate Tax is a form of direct tax levied on the net income of corporations and other businesses. Corporate Tax is sometimes also referred to as “Corporate Income Tax” or “Business Profits Tax” in other jurisdictions. Corporate tax registration refers to the process by which a business entity formally registers with the appropriate tax authority to fulfill its obligations related to corporate taxation. The purpose of corporate tax registration is to ensure compliance with tax laws and regulations, enabling the business to fulfill its tax obligations, file tax returns, and pay taxes on its profits or income.
It is a mandatory requirement for companies or corporations to register for corporate tax in most jurisdictions. The specific steps and requirements may vary depending on the country or state where the business is located.
Who is subject to Corporate Tax?
Broadly, Corporate Tax applies to the following “Taxable Persons”:
- UAE companies and other juridical persons that are incorporated or effectively managed and controlled in the UAE;
- Natural persons (individuals) who conduct a Business or Business Activity in the UAE as specified in a Cabinet Decision to be issued in due course; and
- Non-resident juridical persons (foreign legal entities) that have a Permanent Establishment in the UAE .
Juridical persons established in a UAE Free Zone are also within the scope of Corporate Tax as “Taxable Persons” and will need to comply with the requirements set out in the Corporate Tax Law. However, a Free Zone Person that meets the conditions to be considered a Qualifying Free Zone Person can benefit from a Corporate Tax rate of 0% on their Qualifying Income .
Non-resident persons that do not have a Permanent Establishment in the UAE or that earn UAE sourced income that is not related to their Permanent Establishment may be subject to Withholding Tax (at the rate of 0%). Withholding tax is a form of Corporate Tax collected at source by the payer on behalf of the recipient of the income. Withholding taxes exist in many tax systems and typically apply to the cross-border payment of dividends, interest, royalties and other types of income.
Who needs to register for Corporate Tax in UAE?
Corporate tax in the UAE shall be imposed on the taxable income of businesses at the following rates:
- A 0% corporate tax rate applies to taxable income up to AED 375,000
- A 9% corporate tax rate applies to taxable income over AED 375,000
- A 15% corporate tax rate applies to all multinational corporations subject to OECD Base Erosion and Profit-Sharing laws that belong within Pillar 2 of the BEPS 2.0 framework, i.e. combined worldwide revenues in excess of AED 3.15 billion.
Corporate Tax Registration Services in UAE
We are providing best corporate tax registration services in UAE to get the corporate tax registration number and certificate from FTA. Portal for registration is now open in Emaratax for all businesses in UAE. As per UAE CT law, all taxable businesses in UAE are required to register for corporate tax and obtain a corporate tax registration number.
Corporate Tax Rates
- Corporate tax-Corporate Tax For Free Zone Companies in UAE with qualifying income will be 0%.
- Corporate Tax For Free Zone Companies with non qualifying income will be 9%
Documents required for UAE Corporate Tax registration
To register for Corporate Tax in UAE, businesses must be ready to submit the required documents. The process for corporate tax registration will be done online. The following documents required for Corporate Tax Registration in UAE.
- Copy of Trade License (must not be expired).
- Passport copy of the owner/partners who own the license (must not be expired).
- Emirates ID of the owner/partners who owns the license (must not be expired).
- Memorandum of Association (MOA) – Or – Power of Attorney (POA)
- Concerned person’s contact details (Mobile Number and E-mail).
- Contact details of the company (complete address and P.O. Box).
- Corporate tax period/ financial period of a company
Procedure of Corporate Tax registration
The procedure of filing corporate tax returns in UAE includes,
Tax registration: Obtain a tax registration number from the Federal Tax Authority (FTA) by submitting the required documents and information.
Record keeping: Maintain proper records of all financial transactions and tax-related documents in accordance with the UAE tax laws.
Preparation of tax return: Calculate taxable income and prepare a tax return based on the records maintained, taking into account tax deductions and exemptions as per the UAE tax laws.
Filing of tax return: Submit the tax return to the FTA through their online platform, e-Services, on or before the due date.
Payment of tax: Pay the tax liability as per the tax return filed on or before the due date.
Tax audit: In case of a tax audit, the FTA may request additional information or documents to verify the accuracy of the tax return filed.
We can help you in calculating and devising your tax liability for Corporate tax and assist you throughout the UAE Corporate tax return filing process.
How to register for UAE Corporate Tax?
The steps for UAE corporate tax registration are as follows:
Step 1 : The first step is to create an account on Emaratax by registering with your email address and phone number or logging in using your existing credentials.
Step 2 : Create a taxable person or select a taxable person from the list.
Step 3: The third step is to register for CT. Please select this option and complete the registration process.
Corporate Tax - Timeline
A taxable business has until the date of their first tax return to register, according to the Federal Tax Authority (FTA). In the case of a taxable business whose year ends on May 31st, there is a 26-month registration period available until February 28th, 2025. For taxable businesses with financial year ends on December 31st, a 33-months registration period is available until 30th September, 2025.
Corporate Tax Exemptions
- Government entities.
- Government controlled entities.
- Person engaged in an extractive business.
- Person engaged in a non-extractive natural resource business.
- Qualifying public benefit entity.
- Qualifying investment fund.
- Public pension or social security fund that is subject to regulatory oversight of the competent state authority.
- Private pension or social security fund that is subject to regulatory oversight of the competent state authority.
- A juridical person incorporated in the State that is wholly owned and controlled by an Exempt Person that conducts any of the following:
An Exempt person under the UAE Tax Law is a person who would generally be liable to tax, but by virtue of the specific exemption, they are exempted from taxation. The exemption in some cases is available after making an application to the FTA.
Frequently Asked Questions
CT is a form of direct tax levied on the net income or profit of corporations and other businesses. CT is sometimes also referred to as “Corporate Income Tax” or “Business Profits Tax” in other jurisdictions.
The UAE CT regime will become effective for financial years starting on or after 1 June 2023.
Examples:
- A business that has a financial year starting on 1 July 2023 and ending on 30 June 2024 will become subject to UAE CT from 1 July 2023 (which is the beginning of the first financial year that starts on or after 1 June 2023).
- A business that has a financial year starting on 1 January 2023 and ending on 31 December 2023 will become subject to UAE CT from 1 January 2024 (which is the beginning of the first financial year that starts on or after 1 June 2023).
Given CT is imposed on an annual basis, it is necessary to specify the “Tax Period”. The Tax Period will normally be the Gregorian calendar year (i.e. from 1 January to 31 December), unless the business applies a different 12-month period for preparing its financial statements.
UAE CT applies to juridical persons incorporated in the UAE and juridical persons effectively managed and controlled in the UAE, as well as to foreign juridical persons that have a permanent establishment in the UAE
Individuals will be subject to CT only if they are engaged in a business or business activity in the UAE, either directly or through an unincorporated partnership or sole proprietorship. A Cabinet Decision will be issued in due course specifying further information on what would bring a natural person within the scope of UAE CT.
If you are a registered business for VAT, you will have to pay VAT and CT separately. If your business is not VAT registered you may still have to pay CT.
UAE resident juridical persons will be subject to UAE CT on their income source from both the UAE and from abroad, although certain income earned through foreign subsidiaries and income of foreign branches that is subject to tax in another jurisdiction will generally be exempt from UAE CT. Further details of these exemptions are set out under question
Where income earned from abroad is not exempt, relief for income taxes paid in the foreign jurisdiction can be taken as a credit against the CT payable in the UAE on the relevant income to prevent double taxation