Intro
With the implementation of Federal Decree-Law no. 47/2022, the tax landscape has become expanded in the UAE. Particularly, corporate tax in the UAE has broadened, covering natural persons and companies of multiple ranges.
This law requires taxable persons to register for corporate tax with the Federal Tax Authority in the UAE and get a registration number. The registration is also mandatory for those who are exempted from corporate tax according to Article 4 of the Federal Decree-Law no. 47/2022.
After the successful registration of a taxable person, the FTA imposes a 9% tax on the taxable person whose income crosses the threshold of AED375,000. In contrast, below the threshold, there is 0% corporate tax.
In this article, we cover the details of the corporate tax rate for registration, the required documents, the step-by-step registration process, and the timeline for corporate tax submission. A penalty of AED 10,000 will be imposed on you if your net profit income crosses the threshold and you fail to register for corporate tax in the UAE.
For error-free corporate tax registration and to avoid any penalty risk, you must get the assistance of experts at Now Consultant in the UAE.
Corporate Tax Rate in UAE
The Corporate tax in the UAE has different rates, and it depends on the entity’s taxable income. The Federal Tax Authority sets the following corporate tax rates for taxable persons in the UAE:
- 9% Corporate Tax Rate: This corporate tax rate is set for the taxable person whose net profit of the business crosses the threshold of AED 375,000.
- 0% Corporate Tax Rate: The 0% corporate tax rate is set for the taxable person whose net profit of the business is less than the threshold of AED 375,000.
Documents Required for Corporate Tax Registration
The following documents are required for an error-free corporate tax registration process for taxable persons in the UAE.
- Trade License Copy
- Owners/Partners (License Holders) Passport Copies (Must not be Expired)
- Owners/Partners (License Holders) Emirates ID (Must not Expired)
- Power of Attorney (POA) or Memorandum of Association (MOA)
- Contact Details of the Concerned Person – Mobile Number & E-Mail Address
- Company Contact Details – Address and P.O Details
- Business’s Annual Financial Audit Report
FTA may demand some additional documents as per your business activities in the UAE.
Step-by-Step Process of Corporate Tax Registration
The following is the step-by-step process for corporate tax registration in the UAE:
Step 1: Determine Eligibility Criteria
The first step is determining whether your income qualifies for corporate tax as per Federal Decree-Law No. 47 of 2022.
Step 2: Log into EmaraTax
In the second step, you need to open the EmaraTax portal on the FTA website by entering your credentials or UAE Pass. You need to create an account if you are a new user.
Step 3: Add Taxable Person
In the third step, you need to check if any taxable person has been added to your profile. If it is not added, you must add a new taxable person to proceed with the registration process.
Step 4: Select Corporate Tax Registration
Here on the portal, you go to the corporate tax section and click on the “Register” option. It will start your application for corporate tax registration.
Step 5: Read the Registration Guidelines
At the start of the application, you will be provided with registration guidelines. You need to read the guidelines carefully, as they will help you proceed with the registration process.
Step 6: Enter Entity Details
In the sixth step, you need to choose your entity type, either a “Natural Person or Legal Person,” from this menu. Here, you need to enter the important details such as your trade license number, legal structure, and registration number.
Step 7: Add Business Activities
In the seventh step, you click on the “Add Business Activities” button. In this menu, you have to add the business activities of your trade license.
Step 8: Add Owners (if applicable)
In this step, you need to add owners if the stakeholders acquire 25% or greater shares. Also, provide the relevant details about their ownership.
Step 9: Add Branch Information (if applicable)
If your business has branches, you need to select “Yes” in the branch section. After selecting “Yes,” enter the details of branches.
Step 10: Add Authorized Signatory
In this step, you need to add an authorized signatory with the details of their Emirates ID or passport details. Also, attach proof of authorization to verify their role in the business.
Step 11. Review and Submit Application
In the last step, you need to review all the information and submit your corporate tax registration application.
Corporate Tax Registration Penalties:
The Ministry of Finance (MoF) issued Cabinet Decision No. 75 of 2023, further enhanced in February 2024. The decision recommends the initial penalties of AED 10,000 in case of violation of corporate tax registration for taxable persons in the UAE. If the violation continues, the penalties increase and it even causes suspension of the trade license of business in the UAE.
How Can We Help You?
If you lie under the corporate tax criteria and have not yet registered your business with the FTA, you may face harsh consequences. The tax experts at Now Consultant help you throughout the corporate tax registration process. Our expert team guides you at every step, ensuring you stay compliant with UAE tax laws and avoid the risk of penalties.
We examine your eligibility criteria and prepare the required documents to accurately complete your registration through the FTA portal. We also help you with a tax exemption for your business in the UAE. We also maintain proper records, file tax returns on time, and adhere to all legal obligations to protect your business from fines or penalties.
