Corporate Tax Registration UAE
Corporate Tax Registration UAE, Dubai
The UAE has always been a business hub because of its tax-free nature. With the introduction of corporate tax by the Federal Tax Authority (FTA), businesses in Dubai and the entire UAE have to follow tax laws.
The UAE has always been a business hub because of its tax-free nature. With the introduction of corporate tax by the Federal Tax Authority (FTA), businesses in Dubai and the entire UAE have to follow tax laws. Knowing corporate tax registration is essential for businesses to stay compliant, prevent penalties, and handle financial planning effectively.
Corporate tax refers to a direct tax on the net profit or income of companies. The UAE implemented corporate tax to conform with global taxation trends without compromising its competitive business sector. The base corporate tax rate is 9% for taxable profits over AED 375,000, and profits less than this are exempted from tax to help small companies and start-ups.
Who Has to Register for Corporate Tax?
Compulsory Corporate Tax Registration
Companies obligated to register for corporate tax are:
Foreign enterprises with a permanent establishment in the UAE.
Any company carrying out commercial activities in the UAE.
Exemptions from Corporate Tax
Some organizations and businesses are exempt from corporate tax registration, such as:
Government Organizations: Organizations that are wholly owned by the UAE government and involved in sovereign activities.
Companies involved in the extraction of natural resources, as they are taxed at the Emirate level.
Charitable Organizations: Non-profit organizations, investment funds, and pension funds that qualify for exemption.
Registration for corporate tax in the UAE is a structured process through the FTA’s online portal. This is how companies can register:
Create an FTA Account: Login to the FTA’s e-Services portal and start the registration process.
Fill out the Registration Form: Input company information, financial data, and business activities.
Upload Mandatory Documents: Submit a trade license, Emirates ID, financial statements, and other supporting documents.
Submit the Application: The FTA will examine the application and grant a Corporate Tax Registration Number (TRN) upon approval.
Documents Needed for Corporate Tax Registration
The following documents should be submitted by businesses:
Valid Trade License
Copies of owners/shareholders’ Emirates ID and passport
Memorandum of Association (MOA)
Financial statements for a minimum of the last two years
Contact details and office address of the company
Corporate Tax Compliance and Filing
Keeping Accurate Financial Records
After registering, companies should keep proper accounting records to maintain tax compliance. Accounting statements should be prepared as per international accounting standards.
Companies have to submit their corporate tax return within nine months from the closure of their accounting year. For instance:
If the accounting year closes on December 31, 2024, the tax return should be submitted by September 30, 2025.
If the financial year closes on June 30, 2024, the due date is March 31, 2025.
Tax Deductible Expenses
Some business expenses are deductible, lowering the taxable income. These are:
Employee wages and benefits
Business travel expenses
Depreciation of assets of the company
Marketing and advertising expenses
Consequences of Late Filing or Non-Compliance
Non-compliance with corporate tax laws can lead to:
Financial Penalties: Late registration fines and erroneous tax returns.
Legal Actions: Repeated non-compliance can lead to legal consequences.
FTA Audits: Heightened inspection by the tax authorities.
The Role of a Corporate Tax Consultant in UAE
Considering the complications in tax regulations, it is best for businesses to hire a corporate tax consultant to maintain compliance and effectiveness. Consultants assist in:
Corporate tax registration and submissions
Tax strategy and planning
Knowledge of tax exemptions and deductions
Managing FTA audits and review of compliance