Corporate Tax Filing uae
Corporate Tax Filing in the UAE, Dubai
The United Arab Emirates (UAE) has long been recognized as a global business hub, attracting investors and entrepreneurs from around the world.
Operating the UAE, Dubai corporate tax landscape is a business-critical function that requires constant monitoring and thorough knowledge of the regulatory landscape. With the recent implementation of a federal corporate tax regime in the UAE, businesses must be in the know and compliant to optimize their tax positions and avoid the risk of possible penalties.
The United Arab Emirates has traditionally had a tax-haven status, with
businesses all over the world flocking to it. But in a bid to keep up with
global standards and to diversify government income, the UAE Ministry of
Finance recently announced the implementation of a federal corporate
tax regime effective from financial years beginning on or after June 1,
2023.
Key Features of the Corporate Tax UAE
0%: To be charged on taxable income up to AED 375,000, in favor of small
and medium-sized enterprises (SMEs).
9%: To be charged on taxable income above AED 375,000.
15%: A Domestic Minimum Top-up Tax (DMTT) of 15% to be charged on large multinational groups with consolidated worldwide revenues of at least €750 million, effective from January 1, 2024
9%: To be charged on taxable income above AED 375,000.
15%: A Domestic Minimum Top-up Tax (DMTT) of 15% to be charged on large multinational groups with consolidated worldwide revenues of at least €750 million, effective from January 1, 2024
Scope of Application:
The corporate tax will be charged on all businesses and individuals
engaged in commercial activities under a commercial license in the UAE.
Free zone businesses which are compliant with regulations and which do not conduct business with the UAE mainland may continue to benefit from existing tax incentives.
Foreign entities and individuals are subject to corporate tax only if they conduct a trade or business in the UAE on a continuing or recurrent basis.
Banking operations are also subject to corporate tax
Free zone businesses which are compliant with regulations and which do not conduct business with the UAE mainland may continue to benefit from existing tax incentives.
Foreign entities and individuals are subject to corporate tax only if they conduct a trade or business in the UAE on a continuing or recurrent basis.
Banking operations are also subject to corporate tax
Businesses engaged in the extraction of natural resources are exempt, as
they continue to be subject to existing emirate-level taxation.
Dividends and capital gains arising on qualifying shareholdings are
exempt from corporation tax.
Qualifying intra-group transfers and reorganizations are exempt from
corporation tax, subject to conditions prescribed being fulfilled
Corporate Tax Registration Process
For corporate tax compliance, the companies are required to register
with the Federal Tax Authority (FTA) and obtain a Tax Registration
Number (TRN). Registration is facilitated through the EmaraTax portal. The
process includes:
Create an Account: Register on the EmaraTax portal with a valid email and mobile number.
Set Up Taxable Person Profile: Set up or select the applicable taxable person profile from those available.
Register for Corporate Tax: Select the option to register for corporate tax and proceed with the registration process by entering required details and documents.
Create an Account: Register on the EmaraTax portal with a valid email and mobile number.
Set Up Taxable Person Profile: Set up or select the applicable taxable person profile from those available.
Register for Corporate Tax: Select the option to register for corporate tax and proceed with the registration process by entering required details and documents.
After registration, companies are required to file a corporate tax return
for every tax period, ideally aligning with their financial year. The
corporate tax return must be filed electronically through the FTA’s
EmaraTax portal within nine months from the end date of the relevant
tax period. For instance, if a company’s financial year ends on December
31, 2024, the corporate tax return must be filed by September 30, 2025.
Steps for Corporate Tax Filing
Maintain Accurate Financial Records: Record all financial transactions,
such as revenues, expenses, assets, and liabilities, accurately and
correctly documented.
Calculate Taxable Income: Determine the taxable income by adjusting the net accounting profit for exempted income and non-deductible expenses as required by UAE tax law.
Prepare the Tax Return: Prepare the tax return from the calculated taxable income, including filing all necessary information and supporting documents.
Submit Tax Return: Submit the tax return electronically through the EmaraTax portal before the specified deadline. Settle Tax Liabilities: Settle tax liabilities as stated in the filed tax return within the specified timeframe to prevent penalties.
Calculate Taxable Income: Determine the taxable income by adjusting the net accounting profit for exempted income and non-deductible expenses as required by UAE tax law.
Prepare the Tax Return: Prepare the tax return from the calculated taxable income, including filing all necessary information and supporting documents.
Submit Tax Return: Submit the tax return electronically through the EmaraTax portal before the specified deadline. Settle Tax Liabilities: Settle tax liabilities as stated in the filed tax return within the specified timeframe to prevent penalties.
Penalties for Non-Compliance
Non-compliance with corporate tax requirements may attract heavy
penalties in the form of fines for delayed filing, late payment, and failure
to maintain proper records. Companies should strive to comply rigorously
with the requirements to avert such penalties.
Special Considerations for Free Zone Entities
Free zones within the UAE offer a variety of incentives, such as tax-free
benefits, to entice foreign investment. Yet, the applicability of corporate
tax to free zone entities depends on specific conditions:
Qualifying Free Zone Persons: Entities eligible to be a “Qualifying Free Zone Person” may enjoy a 0% corporate tax rate on eligible income.
Non-Qualifying Income: Income from operations with the UAE mainland may attract the normal corporate tax rate. Compliance Requirements: Free zone entities are required to adhere to all regulatory requirements in order to be eligible for tax-exempt treatment.
Qualifying Free Zone Persons: Entities eligible to be a “Qualifying Free Zone Person” may enjoy a 0% corporate tax rate on eligible income.
Non-Qualifying Income: Income from operations with the UAE mainland may attract the normal corporate tax rate. Compliance Requirements: Free zone entities are required to adhere to all regulatory requirements in order to be eligible for tax-exempt treatment.
How We Can Assist You
At vat registration uae, we are specialists in offering end-to-end
corporate tax solutions to meet the specific requirements of businesses in Dubai and across the UAE.
Our services cover:
Corporate Tax Registration: Arranging the registration process to ensure accurate and timely filing with the FTA.
Tax Advisory: Offering strategic advice for optimizing tax positions and maintaining compliance with evolving rules.
Tax Return Preparation and Filing: Preparation and submission of corporate tax returns accurately and promptly to prevent mistakes and penalties.