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. 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 is a form of direct tax levied on the net income of corporations and other businesses
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.
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.
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
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