Corporate tax became a mandatory requirement for UAE businesses following the introduction of Federal Decree–Law No. 47 of 2022. For a new business, timely Corporate Tax Registration would play a dual role: it helps them avoid penalties and confirms their legal status before the Federal Tax Authority (FTA). A registered business gets its Tax Registration Number (TRN) and emerges as a recognized taxable person for corporate tax purposes in the UAE.
This guide will explain who needs to register, what documents are required, and why early compliance is crucial for each new company operating in Dubai.
Corporate Tax Registration is a business goes through a formal process with the FTA to get a Tax Registration Number. This is the number representing it in all matters regarding tax, including sending annual filings, tax payments, and communications with UAE authorities.
The UAE Corporate Tax Law requires that all qualifying entities proceed with registration even when the business is exempt or has zero tax payable. Any failure to do so will attract an administrative penalty for non-registration or late registration at AED 10,000.
Registration is a mandatory process for most companies, including mainland entities, free zone companies, and foreign businesses that have a taxable presence here in the UAE.
Corporate income tax is imposed based on the business activity and not necessarily the place of business. Generally, the following categories should fill out the registration:
All UAE-incorporated juridical persons will be required to register, including but not limited to LLCs, establishments, and free zone companies. The registration for a TRN and reporting is also required for the free zones that provide a corporate tax rate of 0%
Natural persons, or individuals, shall register when their annual business income exceeds AED 1 million, including freelancers, sole proprietors, and home-based businesses.
Any foreign legal entity is required to register if it has a Permanent Establishment or any other taxable nexus in the UAE, such as having employees based in the UAE, fixed business premises, or regular business activities targeting UAE clients.
Certain entities might be tax-exempt but still have to register, such as:
The confirmation of exemption has to be done through registration by each entity separately.
In order for registration to be made through the FTA’s online portal, the following documents would have to be prepared by the company:
Proof of business activity, ownership structure, and licensing authority.
This helps the FTA verify the company’s tax profile.
Emirates IDs of partners
Passports of owners/shareholders
residence visas
Necessary for verification and possibly for paying taxes.
Memorandum of Association (MOA)
Power of attorney, if applicable
Shareholder resolution for authorized signatory
Basic financial information, particularly for newly established firms, with a view to confirming the classification of a taxable person.
Ejari or tenancy contract, indicating the registered business address.
Accurate and complete documents avoid delays/rejections at the time of registration.
Accurate and timely completion of the Corporate Tax Registration has several key advantages for new businesses in Dubai, including:
The penalty for late registration is AED 10,000. Moreover, continued non-registration will result in an increased risk for further penalties due to missed filings or omission of updating business information.
The registration will help the company strictly follow the requirements that the UAE Corporate Tax has established. This will also protect the business from any dispute, regulatory issues, or penalties arising out of non-compliance.
A valid TRN supports trust with:
In many authorities, proof of tax compliance must be shown before any approval or financing can be granted.
Some companies, such as free zone companies can get incentives in the form of a 0% rate on specified income. Moreover, SMEs must be aware of the possibility of Small Business Relief in connection with the revenue threshold.
Proper registration helps to ensure that:
Registration helps the business attain stability and builds investor confidence in the long run.
As many companies start their business for the first time in Dubai, they have to face delays or extra fines. Some of the common ones are:
Failure to submit within the FTA deadline attracts a penalty of AED 10,000.
Any discrepancy in the trade license, Emirates ID, MOA details, or authorized signatory will cause delayed approval.
Corporate tax and VAT are two completely different regimes; being registered for one does not replace the requirement for the other.
Books need to be clear and well-organized, according to the FTA. Poor record-keeping may cause problems during a tax audit or ascertainment of taxable income.
Some businesses do confuse categories of juridical person vs. natural person, hence leading to wrong applications.
Related-party transactions must be at an arm’s-length principle, and entities must document the transactions.
Professional help reduces risks related to wrong filings or misinterpretation of tax law.
Working with corporate tax consultants who have experience will help the new business in understanding UAE regulations and avoid compliance gaps. Professional tax advisors will help for:
These consultants enable you to minimize penalties, maintain compliance, and optimize your tax position in line with the laws of the United Arab Emirates.
It is the process of registration with the FTA for obtaining a TRN. It has been made compulsorily by Federal Decree-Law No 47 of 2022 for the purpose of compliance/reporting
This comprises the companies in the mainland, free zone companies, individuals whose business income is in excess of AED 1 million, and non-resident entities having a permanent establishment.
Trade license, MOA, IDs, visa copies, bank details, business address proof, and financial information.
Avoid penalties, legal compliance, access to benefit from tax, enabling better financial planning, and enhancing credibility.
Late filings, furnishing of incorrect information, misunderstanding relating to VAT, keeping inadequate books and records, and a lack of understanding on what type of entity.