Corporate Tax Registration Guide
Corporate Tax Registration
Under UAE corporate tax, entities falling under the purview of Taxable Persons are required to undergo the corporate tax registration process. All Taxable Persons, including those operating within Free Zones, are obligated to complete the corporate tax registration procedure and acquire a unique Corporate Tax Registration Number before they can submit their initial corporate tax returns. It is important to note that UAE branches of domestic juridical persons are exempt from the obligation to register independently for UAE Corporate Tax, as they are deemed extensions of their parent or head offices and are not considered autonomous legal entities. For seamless adherence to corporate tax regulations and to ensure seamless registration, Taxable Persons are recommended to avail the expertise of Top Tax consultants in UAE.
Steps to Register for Corporate Tax in the UAE
The registration process for corporate tax in the UAE is a structured procedure initiated by registering the trade license with the Federal Tax Authority (FTA) to obtain a Tax Registration Number (TRN). This involves completing an online registration form and submitting requisite documents such as the trade license and articles of incorporation. Upon successful registration, businesses are issued a TRN, which is a crucial reference for all tax-related documentation and filings.
To facilitate your corporate tax registration in the UAE, here are the general steps prescribed by the Federal Tax Authority:
- Account Creation/Login
Access the FTA's official website and either log in to your existing Emara Tax account using your credentials or create a new account if you don't have one. This account will serve as the hub for all tax-related activities.
- Selection of Taxable Person
Create your taxable person profile or choose the appropriate taxable person from the provided list.
- Company Information
Fill out the requisite forms and furnish information about your company.
- Registration Application Submission
Complete the online registration application through your e-Services account, ensuring that all mandatory fields are accurately filled.
The FTA will review your application, possibly requesting additional information or documentation, and carry out necessary checks for validation.
- Receipt of Corporate Tax Registration Number
Upon approval of your application, you will be issued a Corporate Tax Registration Number as mandated by UAE Corporate tax regulations.
- Corporate Tax Return Filing
Taxable Persons are obligated to submit a Corporate Tax return for each Tax Period within a timeframe of 9 months from the conclusion of the respective period. Typically, this deadline coincides with the settlement of any Corporate Tax liabilities related to the same Tax Period for which the return is filed.
- Ongoing Compliance
After obtaining your corporate tax registration number, it is imperative to maintain continuous compliance with tax regulations. This entails the submission of regular tax returns, meticulous record-keeping, and adherence to all tax obligations as per the guidelines set by the FTA.
Required Documents for Corporate Tax Registration in Dubai
To successfully complete the corporate tax registration process in Dubai, UAE, businesses must diligently prepare and submit the requisite documentation online. The following documents are necessary to ensure smooth and efficient corporate tax registration:
- A copy of a valid Trade License.
- Passport copies of the owner(s)/partners associated with the license (valid).
- Emirates ID copies of the owner(s)/partners associated with the license (valid).
- Memorandum of Association (MOA) or Power of Attorney (POA).
- Contact details of the designated person (mobile number and email address).
- Company's contact details, including a complete address and P.O. Box.
- Corporate Tax Period information.
- Crucial Aspects of Corporate Tax Registration in the UAE:
For the purposes of corporate tax registration, there are essential components that Taxable Persons must bear in mind. These components not only ensure compliance with the UAE's tax regulations but also facilitate the smooth operation of tax-related activities. The key elements include:
- Tax Registration: Entities meeting the criteria for corporate tax must register with the UAE Federal Tax Authority (FTA). The registration process necessitates the provision of precise information about the company, encompassing trade license details, ownership structure, financial records, and contact information. Taxable Entities: The determination of tax liability is contingent on the legal structure and activities of entities operating in the UAE. Entities subject to corporate tax encompass limited liability companies, partnerships, branches of foreign companies, and free zone companies unless exempted.
- Taxable Period: The FTA designates the taxable period for each registered entity, typically aligned with the company's fiscal year. Accurate accounting records must be maintained, and the filing and payment of taxes should be executed within the designated timeframe.
- Taxable Profit Calculation: Registered entities are responsible for calculating their taxable profit using the guidelines stipulated by the FTA. This process involves applying the relevant tax rate to the net profit derived from the company's activities after making necessary adjustments, deductions, and exemptions as per UAE tax laws.
- Tax Returns and Payments: Companies must submit their tax returns to the FTA within the prescribed timeframe. This entails providing the requisite forms, statements, and supporting documents that detail income, expenses, and tax liabilities. Any outstanding tax obligations must be settled within the specified deadline to avoid penalties and fines.
- Accounting and Record-Keeping: The maintenance of accurate accounting records and supporting documentation is imperative for corporate tax compliance. Businesses should retain financial statements, invoices, receipts, bank statements, and other pertinent records for at least five years from the end of the taxable period.
- Auditing Requirements: Depending on their turnover and other criteria, companies may be subject to auditing their financial statements by an approved auditor. The FTA may request these audited financial statements during tax assessments or investigations.
- Penalties and Compliance: Non-compliance with tax obligations can result in penalties and fines imposed by the FTA. It is essential for businesses to remain up-to-date on tax regulations, fulfill their filing and payment obligations, and promptly respond to any inquiries or audits conducted by tax authorities.
Seek the Expert Guidance of Top Tax Consultants in the UAE
To ensure effective compliance with the Corporate Tax Law, mitigate risks, and effectively implement corporate tax practices, it is strongly advisable for Taxable Persons to seek the guidance of Tax Consultants in the UAE. Corporate Tax UAE, a reputable Tax Consultant in the UAE, is dedicated to assisting Taxable Persons in meeting their tax obligations and ensuring adherence to the regulations and standards set forth by the Federal Tax Authority. Reach out to us today for expert assistance and we shall be glad to assist you.
Frequently Asked Questions
What is Business and Business Activity under Corporate Tax UAE?
Defining the terms "Business" and "Business Activity" is of paramount importance within the context of the UAE Corporate Tax Law when assessing the tax obligations of both individuals and entities. "Business" encompasses any economic endeavor, whether it is of a continuous or short-term nature, undertaken by an individual or an entity, with the implicit intention of profit generation and a certain level of organization and systematization.
Concerning companies and legal entities under the Corporate Tax Law, all their activities, asset utilization, and possession are generally considered integral components of a "Business."
Who are Resident Persons under Corporate Tax?
The determination of "Resident Persons" for UAE Corporate Tax purposes entails recognizing companies incorporated in the UAE, including Limited Liability Companies, Private Joint Stock Companies, Public Joint Stock Companies, and other UAE legal entities. An entity incorporated in the UAE is automatically considered a "Resident" Person under the UAE Corporate Tax regime. Likewise, a natural person engaged in a Business or Business Activity within the UAE is also considered a Resident Person for UAE Corporate Tax purposes.
In the case of foreign companies, they can attain Resident Person status for UAE Corporate Tax purposes if they are "effectively managed and controlled" within the UAE. This determination takes into account all relevant facts and circumstances, with a significant indicator being the location where the company's board of directors makes strategic decisions that significantly impact the company.
Who are Non-Resident Persons under Corporate Tax in UAE?
Identifying "Non-Resident Persons" under UAE Corporate Tax Law is governed by the provisions of the Corporate Tax Law. A legal entity is categorized as a "Non-Resident Person" if it is incorporated in a foreign country and is effectively managed and controlled outside the UAE. Natural persons are considered Non-Resident Persons for UAE Corporate Tax purposes if they are not engaged in a taxable Business or Business Activity within the UAE.
For Non-Resident Persons, UAE Corporate Tax is applicable only to:
Income attributable to their Permanent Establishment in the UAE.Income that is attributable to a nexus in the UAE as determined in Cabinet Decision No. 56 of 2023.Income sourced in the UAE, subject to a 0% Withholding Tax.
UAE Resident Persons, including UAE-resident legal entities, are subject to UAE Corporate Tax on their income generated both within the UAE and abroad. However, certain income earned through foreign subsidiaries and income from foreign branches subject to taxation in another jurisdiction may qualify for exemptions from UAE Corporate Tax.
In cases where foreign-earned income is not exempt, relief can be obtained by offsetting income taxes paid in the foreign jurisdiction against the Corporate Tax payable in the UAE on the relevant income to prevent double taxation.
Are Natural Persons Subject to Corporate Tax in UAE?
Regarding natural persons, they will be subject to UAE Corporate Tax if their annual Turnover from a 'Business' or 'Business Activity' in the UAE, as defined by the Corporate Tax Law and Cabinet Decision No. 49 of 2023, exceeds AED 1 million. This excludes income generated by a natural person from specific sources that are not considered as Businesses or Business Activities, namely Employment income, Personal Investment income, and Real Estate Investment income.
Who is a Juridical Person under Corporate Tax in UAE?
A "juridical person" is an entity established or recognized under UAE laws and regulations or the laws of a foreign jurisdiction. It possesses a distinct legal personality separate from its founders, owners, and directors. Examples of UAE domestic juridical persons include limited liability companies, foundations, 'onshore' trusts, public or private joint stock companies, and other entities with separate legal personality under applicable UAE 'mainland' legislation or Free Zone regulations. UAE branches of domestic or foreign juridical persons are treated as extensions of their "parent" or "head office" and are not considered separate juridical persons.