The Ministry of Finance, UAE augmented corporate tax in 2022, marking the beginning of a new era in UAE’s business setup. Being a new-age concept in UAE, companies and businesses might find it challenging to critically know about the corporate tax, its registration and the said procedures. In tandem with this, corporate tax consultants in Dubai can ensure timely corporate tax registration in UAE.
Characterized by seamless regulations issued by the Organization for Cooperation and Economic Development (OECD), UAEs corporate tax regime minimizes compliance risk for the business. Having said that, the FTA’s Federal Decree Law 47, clearly outlines that adherence to corporate tax law is compulsory for all taxable entities, including Free Zone Person. In regards to this, every taxable person needs to undergo corporate tax UAE registration.
Understanding Corporate Tax Framework
Since corporate tax registration UAE and the acquisition of a unique Registration Number is a mandatory requirement outlined by the Federal Tax Authority, even a few exempted persons are urged to complete the registration process. In cases exempted by the Ministry, a taxable person is obligated to register for corporate tax with the FTA, following a prescribed format and adhering to a timeline determined by the authority.
The Federal Tax Authority has mandated that both taxable persons and independent partnerships need to undergo corporate tax registration UAE and obtain a unique tax registration number. Upon the successful completion of the registration process, a taxable person is subjected to compliance with a standardised corporate tax rate of 9% on taxable income exceeding AED 375,000. At the same time, taxable income up to AED 375,000 is subject to a 0% charge.
Decoding the Need for Corporate Tax
UAE’s Ministry of Finance has launched such a tax framework that offers benefits to businesses paying corporate tax, which in return voluntarily stimulates enterprises to pay corporate tax. Leveraging this dual-benefit tax structure, businesses subjected to corporate tax can maintain compliance with tax law, and identify malicious tax practices by harnessing the power of world-class tax standards. Providing additional advantages to corporate taxpayers, it reduces the after-tax revenue of the company. Simultaneously, corporate tax not only impacts people with direct shareholdings but also indirect shareholders through private pensions or investment funds.
Documents required for Corporate Tax Registration UAE
The process for corporate tax registration is conducted online. However, here’s a list of documents required for Corporate Tax Registration in UAE.
- Copy of Eligible Trade License
- Passport copy of the owners/partners/shareholders who own the licence
- Emirates ID of the owners/partners/shareholders who owns the licence
- Memorandum of Association (MOA) – Or – Article of Association (AOA)
- Concerned person’s contact details, namely Mobile Number and E-mail
- Contact details of the company include complete address and P.O. Box
- Corporate Tax Period
UAE Corporate Tax Return Filing
For instance, if a company adopts a fiscal year which begins from 1 June 2023 and ends on 31 May 2024. Then the said company will be subjected to corporate tax from 1 June 2023, for which the first tax return filing will be due on 28 th Feb 2025.
On the contrary, if a company employs a financial calendar year that begins on or after 1 January 2023 and is completed on 31 December 2023. Then the concerned company will be subjected to corporate tax from 1 January 2024 and filing for the same will likely be due on 30 th Sep 2025.
Start of Financial Year | July 2023 – June 2024 | January 2024- December 2024 | April 2024 – March 2025 |
End of Financial Year | 30th June 2024 | 31st December 2024 | 31st March 2025 |
Filing and Payment Due Date | 31st March 2025 | 30th September 2025 | 31st December 2025 |
It is important to note that the FTA has announced corporate tax fines and penalties in the UAE. Penalty of AED 10,000 shall be imposed for late corporate tax registration UAE.
Wrapping Up
If you are planning for Corporate Tax Registration in UAE or if you have any inquiries, please feel free to contact A&A Associate LLC, a pioneering tax consultant in Dubai. We are committed to providing you with the best-in-class services backed by a strong team of corporate tax consultants in Dubai.