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How to Register for Corporate Tax in UAE Using Emaratax
Kreston Menon
With the introduction of corporate tax in UAE, the face of tax and the entire economy have changed deliberately. Emaratax, the UAE’s official online portal offering streamlined services, makes registration and payment easy. Through this, companies can easily submit their registration applications online and manage all tax-related matters efficiently. This eliminates the need for complex paperwork and physical visits to the Authority. 

This Emaratax portal simplifies corporate tax-related tasks, allowing existing and new business owners to register and pay taxes easily.

Therefore, it’s important to know processes like tax registration, deregistration, payments, and deadlines to avoid hefty penalties and other future issues. 

Table of Contents


What is Corporate Tax? 


Corporate tax is a tax imposed on businesses that generate taxable income over a threshold amount and operate within a specific jurisdiction. The UAE corporate tax is a new regulation introduced by the UAE government to reduce the country’s reliance on oil-related income and match the country’s tax standards to global tax standards. 

Companies registered in the UAE, generating impressive net profits above AED 375,000 are required to pay 9% of the amount in corporate tax to the FTA. Fortunately, budding businesses are exempt from this category and are not asked to contribute any sum in the form of tax to the government because they have relatively less role in uplifting the economy. 


Who Needs to Register for UAE Corporate Tax? 


All companies in the country generating taxable incomes above the threshold should register for corporate tax with the FTA (Federal Tax Authority). This includes any business regardless of origin. As far as a business operates in the UAE, tax must be paid to its government. However, businesses with profits below the threshold are not asked to pay corporate tax. However, they can voluntarily do so if they want to make their company look more appealing and trustworthy to the public. 

There are also a few other exemptions for companies operating in designated free zones. These companies are either free from tax obligations or they can enjoy reduced rates. However, these benefits can only be availed once the government is convinced of their specific limitations. Except for these, it is mandatory for all other companies, including LLCs, partnership companies, joint stock companies, sole proprietorships, holding companies, real estate investors, and foreign business owners to file for corporate tax in UAE.  


How to Register for Corporate Tax in UAE?




UAE companies must register with the FTA to comply with the latest tax regime. But before that, it is important to have at least a vague picture of the UAE corporate tax registration guide. To complete the registration, An Emaratax login is suggested. The process involves sharing key details about the company. The FTA has announced a pre-registration corporate tax for certain companies to encourage them to register for the same through the Emaratax portal. The Emaratax login can be done easily using an FTA account or UAE pass. Individuals with no FTA account need to create one by clicking on “Sign Up” or “Register” on the Emaratax website. 

The website ensures a seamless user experience with links to powerful government entities like the Central Bank and national programs such as UAE Pass. Users will get access to all the necessary information needed for the tax registration. Moreover, it has a few self-help options in case users get stuck in the middle. The platform is easy to navigate and is a one-place stop for entities looking to manage their corporate tax, VAT payments, registrations, and so on. 


Documents Required for Corporate Tax Filing in the UAE 





When preparing to register for Corporate Tax in UAE, the following information and documents should be kept handy/ submitted:

  • Taxable income: This includes the details of operating expenses, revenues, cost of goods, and any tax deductions. 
  • Financial statements for the relevant period.
  • Profit details.
  • Taxable losses: Any losses carried forward from the previous year.
  • Transfer pricing documentation.
  • Tax adjustments.
Also Read: Documents Required for VAT Registration UAE.

Corporate Tax Registration Guide


To register, determine the structure of the business, trading name, necessary approvals, and license, and then apply for the registration number. Following that, entities can pay their taxes per the tax regulations put forth by the UAE government. The step-by-step process is as follows: 

Step 1: Login to the portal: Login can be done using the UAE pass. Once logged in, users will be automatically taken to the Emaratax user dashboard, an interface where the Taxable Person details pop up. If there is no data available associated with the user profile, a new Taxable Person should be added. 

Step 2: To complete the registration, the user must tap on the “Register” tab under the Corporate Tax tab. Following that, another interface will appear with guidelines and instructions. It is important to go through them before clicking on the confirm button. 

Step 3: Click “Start” to begin the registration process. 

The application is divided into many sections and there’s a progress bar to denote how many sections need to be finished. All the necessary fields have to be filled in to avoid the application being rejected later. 

Step 4: Select the entity type among the following: 

UAE Public Joint Stock Company.
UAE Private Company.
Currently, the application is available for more entities including legal person entities and natural person entities. 

Step 5: After filling in the details, tap on the ‘Next Step.’ This will automatically save the updates and direct the user to the ‘Identification Details’ section. 

Step 6: To add the trade license-related activity details, tap on ‘Add Business Activities.’

Step 7: Once all the key details are added, click on the activation code.

Step 8: Following that, click on the ‘Add Owners’ button and provide the details of the owner who holds at least 25% or more.

Step 9: If the entity has multiple branches, select ‘Yes,’ and add the branch details, including the owners’ list, business activities, and trade license details.

Step 10: Once this section is done, click ‘Next Step’ to proceed to the ‘Contact Details’ segment.

Step 11: Enter the detailed address of the entity. 

Step 12: (The application is likely to be rejected if the original address is not provided. In case the company has more than one address, the address of the company where most activities are held should be provided).

Step 13: After completing this part, click on the ‘Next Step, to save the details entered so far and proceed to the ‘Authorized Signatory’ section.

Step 14: Click on the tab named ‘Add Authorized Signatory’ to provide the details.

Step 15: After adding the details, click ‘Add’.

Step 16: On completion, tap on the ‘Next Step’ option and head to the ‘Review and Declaration’ part. This is a review section; hence, all the crucial information entered so far will be displayed for review. Any edits have to be made quickly before clicking on the ‘Submit’ bar.

Step 17: After clicking on the ‘Submit’ bar, the application will be submitted to the registration authority. 

Step 18: Finally, a reference number is provided. It has to be noted for future correspondence with the tax authority/ FTA. 


UAE Corporate Tax Deadline for filing


One of the major flexes of UAE corporate tax is its focus on self-assessment. This means, the businesses are responsible for themselves and must ensure all the submitted documents are true and comply with the law. The due date for filing a corporate tax return is 9 months from the closing of the financial year. The law allows business entities up to 21 months to prepare for filing and making their payments. For example, businesses with a tax period beginning from January 1, 2024, and extending to December 31, 2024, have time until January 1 and September 30, 2025. 


UAE Corporate Tax Deregistration 


Deregistration for Corporate Tax refers to removing a business entity from the UAE’s corporate tax system. Businesses have to be removed when they no longer meet the criteria for tax registration. Generally, a business becomes eligible for deregistration in the following situations:

Profit falls below the threshold: If a business’s net profit falls below AED 375,000 annually for any reason, it can proceed with deregistration. 
Business Ceases Operations: If a company is dissolved or suddenly stops engaging in business activities, it may apply for deregistration


Deregistration of Corporate Tax in UAE 


Before deregistering, make sure there are no outstanding tax liabilities, including interest or penalties. 

  • Login to the FTA portal using username/password.
  • Initiate deregistration by filling out the form.
  • Provide the appropriate deregistration reason. 
  • Submit request documents which may include proof of business closure, final financial statements, and other required documents. 
  • Wait for the FTA review.
  • Once all the documents are received and all requirements are met, the FTA will approve the deregistration, cancelling the corporate tax of the company.
  • An official confirmation will be received from the FTA once the application is approved. 
  • Upon the approval of deregistration, it is crucial to cancel the trade license of the company with the regulatory authority.
Note: Corporate Tax deregistration has to be initiated within 20 days from the event that pushes a deregistration. And if the entity is registered for VAT, it has to be taken care of separately. 


FAQs 


  1. How efficient is online tax payment in the UAE?

    In UAE, online tax payment is highly useful for companies registered for corporate tax as it eliminates the risk of paperwork and physical visits. Via this platform, services like submitting tax returns, paying bills, registering, and claiming refunds can be carried out effectively.

  2. How to pay tax in Emaratax?

    Paying tax via Emaratax is trouble-free and understandable. Simply log in to the Emaratax portal and select the ‘My Payments’ option. Tap on the ‘Select and Pay’ bar and choose the payment methods. Once the payment is completed, a confirmation message will be received.

  3. How often will companies in the UAE have to file a CT return?

    Companies are only required to file one CT return per financial year. Which means, only once a year. No advanced or provisional Corporate Tax filings are required. 

  4. Are salaries subject to UAE Corporate Tax?

    Regardless of whether the employment falls under the category of public or private sector, UAE corporate tax will not apply to any employment income, and salaries are no exception. 

  5. How crucial is FTA in UAE CT?

    The processes like administration, collection, and implementation of UAE corporate tax is carried out by the FTA, making it a crucial authority.  In essence, the FTA ensures that companies in the UAE meet their tax obligations. 
Read More
Corporate Tax UAE: Everything You Need to Know in 2024
Kreston Menon

Before beginning a business in the UAE you need to understand the country’s corporate tax system properly. UAE introduced corporate tax for keeping companies to keep up with global standards and also for avoiding any surprises down the line. 

So here we are breaking down corporate tax UAE for your better understanding. If you are a well established company or building a new one this complete guide will help you plan better and avoid any penalties. 

Table of Contents


What Is Corporate Tax In The UAE?




In 2022, the UAE Ministry of Finance introduced a Federal Corporate Tax for the first time. The corporate tax is set at 9% on business profits exceeding AED 375,000. This rate remains quite low compared to other countries, ensuring that the UAE’s corporate tax remains highly competitive.

The corporate income tax is a direct tax levied on the net income of corporations and other entities. 

These corporate taxes mainly focus on the earnings a business generates after deducting operating costs, salaries, and other expenses. UAE has mainly introduced this corporate tax to diversify the economy and align itself with global taxation standards. In June 2023, this corporate tax UAE became applicable to all businesses in the UAE, a shift from the previous tax-free environment the country was known for. 

UAE corporate tax is important for business in many ways, 

  • Global tax practices: The introduction of UAE’s global taxes will help them enhance the transparency and credibility of the UAE as an international business hub. In this way, they can attract more foreign investment. 
  • Compliance: for all the business understanding and adhering to corporate tax UAE laws is important. Non-compliance typically leads to penalties, audits and other reputational damages and staying with a compliant business can operate smoothly without interruptions.
  • Financial planning: all companies always go for long-term financial planning. so corporate tax forces businesses to reevaluate their financial strategies better. 
  • Free Zones and Exemptions: Businesses operating in free zones remain largely exempt from corporate tax, making these areas highly appealing to international companies. However, free zone businesses need to meet specific conditions to maintain their tax-free status, ensuring they contribute to the UAE’s economy in meaningful ways.

Who Should Register for Corporate Tax in UAE?


Any business entity, whether operating on the mainland or in a free zone, should register for corporate tax in UAE. Even if a company qualifies for exemptions or relief, it must still go through the registration process to ensure compliance with the UAE’s tax laws. The registration ensures that the business is recognized by the authorities and is properly categorized based on its income and activities. Under certain conditions and thresholds, natural persons may also be required to register for corporate tax. There may also be situations where non-resident juridical persons would need to register for UAE corporate tax if prescribed conditions are met. 



Who is Exempted from the Corporate Tax in the UAE? 


There are some categories that are exempted from the Corporate Tax UAE as follows, subject to certain conditions: 

  • UAE corporate tax does not apply to any government departments, authorities, or other public institutions.
  • Companies that are controlled by the UAE government and carry out specific activities are also exempt from these corporate taxes. 
  • Organizations that are established for charities, non-profits or other educational institutions can be exempt from the UAE corporate tax.
  • Mutual funds and alternative investment funds that are regulated by the UAE may qualify for corporate tax exemptions.
  • The UAE does not impose corporate tax UAE on oil and gas companies.

Effects of Corporate Tax on UAE Businesses


A number of changes have been made to business policies and the overall environment in the UAE since the introduction of corporate tax:

Impact on Business Operations and Profits


With corporate tax, all businesses will need to adjust their operations to account for these new tax regulations. This means higher operational costs, more financial planning, and other paperwork. The UAE’s corporate tax rate is still quite low compared to other countries, so many businesses should be able to adapt without significant financial strain.

Attraction for Foreign Investment


UAE has been a magnet for foreign investors due to its tax-free benefits, great location, and infrastructure. Now that there’s a corporate tax, some might wonder if that attractiveness will drop, but the UAE remains highly appealing with its low tax rate and numerous free zones offering tax incentives.

Impact on Small and Medium Enterprises


Small enterprises might feel the impact of corporate tax a bit more than larger companies. The UAE government set up certain exemptions or reduced rates for businesses that don’t meet a certain profit threshold.

Impact on Free Zone Businesses


Free zones in the UAE have long been attractive to companies because they offer perks like 100% foreign ownership and tax breaks. At the same time, free zone businesses may still benefit from some of these advantages, so some businesses may reconsider whether operating in free zones or mainland UAE is more cost-effective.

Government Revenue and Public Services


By collecting corporate tax, the government will have more funds to invest in key public services like infrastructure, healthcare, and education. This can have a positive effect, improving the overall quality of life in the country and making it an even better place to do business.

Corporate Behavior and Strategic Adjustments


Businesses will likely start making strategic adjustments to minimize their tax burden. This could involve restructuring, finding ways to qualify for deductions, or investing in more tax-efficient operations. Corporate tax UAE will become a part of the decision-making process for businesses. It leads them to seek out opportunities for cost savings in other areas. 

Also Read : Documents Required for VAT Registration UAE

Required Documentation for Corporate Tax Registration UAE


Here’s a checklist of the key documents and information required for successful corporate tax registration in the UAE,

  • Trade License: You need a copy of your company’s valid UAE trade license.
  • Owner/Shareholder Information: Personal identification details and proof of identity (e.g., passport copies) for all owners and shareholders.
  • Business Activity Information: An overview of the nature of your business, its legal structure, and the activities you perform.
  • Authorised signatory details: personal identification details, proof of identity (e.g., passport copies) and proof of authorisation  (e.g. power of attorney, MoA) for the authorised signatory

How To Calculate Corporate Tax In UAE


Here’s what the Ministry of Finance says about corporate tax UAE rates,

  • 0% – to taxable income up to AED 375,000
  • 9% – to taxable income above AED 375,000
  • Keep in mind that large multinationals may have different rates in the future (Global minimum tax) depending on certain criteria.
First, you need to prepare the books of accounts according to the International Financial Reporting Standards, which are acclaimed by the UAE authorities for corporate tax purposes. 

You need to remember that 9% is charged only if the taxable profit crosses AED 375,000. So up to AED 375,000 is 0%.

Here is how you can calculate the corporate tax under the 9% corporate tax in UAE.

In the case of an income of AED 600,000, the corporate tax would be calculated as follows:

(600,000 – 375,000) * 9% = AED 20,250. 


Conclusion


In summary, understanding business taxes in the UAE is essential for business. To ensure you are compliant, it is recommended that you learn all the necessary guidance, from how to register with tax companies to the documents required for annual returns.

Seek advice from a professional tax advisor. This is where Kreston Menon, one of the best tax advisor in the UAE, can play a key role. Whether it’s helping you register with tax companies or ensuring your returns are accurate, they will advise you on every issue. With their in-depth knowledge of UAE tax laws, you will be sure that your business is fully compliant and avoids any obstacles.


FAQ



  1. What is corporate tax in UAE?

    Corporate taxes are direct taxes levied on the income of businesses operating in the country. They apply to corporations, other legal entities and natural persons in some cases, but there are some exceptions for certain businesses in the UAE.

  2. Who needs to register for UAE corporate tax?

    All companies incorporated in the UAE need to register for corporate tax, irrespective of the turnover, profitability or activity. There are thresholds prescribed for natural persons, beyond which a registration is warranted. 

  3. How much is corporate tax in UAE?

    The regular business tax in the UAE is 9% on taxable income over AED 375,000. Values ​​below this threshold and some free zone businesses will be exempt.
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