The announcement of Corporate Tax in the UAE has made businesses and tax experts extensively deliberate on this development. According to the CT law, individuals and businesses will be subject to a 9% corporate tax from their initial financial year starting on or after June 1, 2023. Additionally, they are required to obtain a corporate tax registration number by registering with the tax authorities. However, it could be a concern for many - how to register for corporate tax in UAE?
Navigating the complex world of corporate tax in the UAE could be challenging. This comprehensive guide will walk you through the process of Corporate Tax Registration UAE, from understanding the basics to gathering the necessary documents, to ensure that your business stays fully compliant with the law and maximizes its financial potential.
Corporate Tax Registration UAE
Corporate Tax Registration is a legal process where businesses are required to register with the Federal Tax Authority (FTA) to ensure adherence to the regulations of the corporate tax regime in the UAE. Introduced on June 1, 2023, corporate tax applies to the net income of entities operating in the country. According to the law, businesses with annual taxable income exceeding AED 375,000 are required to register for corporate tax, ensuring their adherence to tax regulations and obligations such as filing returns, paying applicable taxes, etc.
Federal Decree Law 47 of the FTA mandates every taxable entity to undergo Corporate Tax Registration UAE and obtain a Registration Number.
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As per the FTA rule, exempt entities are also required to register for Corporate Tax.
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Taxable entities must submit tax returns within nine months of the end of the specified tax period.
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The business or individual must settle all taxes owed for the respective Tax Period before the deadline.
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The taxable entity must adhere to a specific timeline and format while registering fo corporate tax in the UAE.
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Registering for Corporate Tax and acquiring the Tax Registration Number is mandatory under the FTA guidelines.
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Once an individual becomes a Taxable Person, they must promptly complete Corporate Tax registration UAE with the tax authority.
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Upon successful registration, entities with taxable income exceeding AED 375,000 would be subject to a standard tax rate of 9%, whereas those with taxable income up to AED 375,000 would be subject to a 0% corporate tax.
Who must register for Corporate Tax?
Before determining how to register for corporate tax in UAE, it is crucial to know who needs to register. All establishments conducting business in the UAE are subject to corporate tax which may include resident companies, non-resident companies, free zone companies, and mainland entities. However, certain exemptions may apply depending on the type and size of the business. The tax professionals in our consultancy will help you determine your specific obligations so that your business stays ahead of the curve.
1. Rates and Qualifications
Here’s an overview of the corporate tax rates imposed upon different entities across the UAE –
2. For UAE Businesses and Taxable Persons:
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0% for taxable revenue up to AED 375,000
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9% for taxable revenue exceeding AED 375,000
3. For Entities in Qualifying Free Zones:
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0% on qualifying income
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9% on other income
4. Qualifying Free Zone Person’s Net Profit:
Qualifying Income refers to the profit earned by a Qualifying Free Zone Person from an international business or any Free Zone business in the UAE.
How to register for corporate tax in UAE: Understanding the process
Registering for UAE corporate tax involves several steps. Following them will ensure a smooth and hassle-free registration with the FTA.
Obtain a tax registration number (TRN)
The process starts with obtaining a tax registration number (TRN), which is not only unique to your business but also required for all tax-related transactions within the UAE. To obtain this number, the applicant must visit the official website of the FTA and complete the online registration form, providing information about the business, such as the legal structure, trade license number, and contact details.
Conclusion
With the support of experienced professionals like us, you can confidently navigate the complexities of the corporate tax system in the UAE, thereby setting your business on the path to financial success.
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