The United Arab Emirates (UAE) is known for its business-friendly environment, attracting entrepreneurs and investors from around the world. However, starting from 2018, the UAE introduced a new tax regime that requires companies to register for corporate tax. The Federal Tax Authority (FTA) is responsible for implementing the tax system, which includes VAT, excise tax, and corporate tax.

Corporate tax registration in the UAE is mandatory for all companies, regardless of their size or type of business. The tax rate is set at 5% of the company’s taxable income, which includes profits, capital gains, and other income sources. The FTA has set strict guidelines for companies to follow when registering for corporate tax, including providing accurate financial statements and tax returns. Failure to comply with these guidelines may result in penalties and fines.

Eligibility Criteria for UAE Corporate Tax Registration

To promote fiscal transparency and diversify its revenue sources, the United Arab Emirates (UAE) implemented a corporate tax system in 2018. The Federal Tax Authority (FTA) oversees the registration and administration of corporate tax in the UAE.

To be eligible for corporate tax registration, companies must meet certain criteria, which are outlined below.

Legal Entity Types

All legal entities operating in the UAE, including companies, branches, and permanent establishments, are required to register for corporate tax. This includes free zone companies, which were previously exempt from taxation.

Taxable Income Thresholds

Companies with an annual taxable income of AED 375,000 or more are required to register for corporate tax. Taxable income includes all revenue generated from business activities in the UAE, minus any allowable deductions.

Exemptions and Exclusions

Certain entities are exempt from corporate tax registration, including companies engaged in oil and gas exploration and production, and companies wholly owned by the federal or local government. Additionally, companies with a permanent establishment in the UAE but no taxable income are excluded from registration.

It is important for companies to understand their eligibility for corporate tax registration and comply with the FTA’s regulations. Failure to register or pay corporate tax can result in penalties and legal action.

Registration Process and Requirements

Documentation Needed

To register for corporate tax in the UAE, companies must provide certain documentation. These include:

• A copy of the company’s trade license
• A copy of the company’s memorandum and articles of association
• A copy of the company’s audited financial statements for the previous year
• A copy of the company’s tax residency certificate, if applicable
• Copies of the passports of the company’s directors and shareholders
• A copy of the Emirates ID of the company’s authorized signatory

It is important to ensure that all documentation is complete and accurate to avoid any delays in the registration process.

Timeline and Deadlines

Companies in the UAE are required to register for corporate tax within 30 days of becoming liable for tax. This includes newly formed companies and companies that have started generating taxable income for the first time. Failure to register within the stipulated time frame may result in penalties.

Once a company has registered for corporate tax, it must file its tax returns within 4 months of the end of its financial year. Late filing of tax returns may also result in penalties.

Online Registration Portal

The UAE Federal Tax Authority (FTA) has an online portal for companies to register for corporate tax. The portal is user-friendly and allows for easy submission of all required documentation. Companies can also track the status of their registration application through the portal.

To access the online registration portal, companies must first create an account on the FTA’s website. Once the account is created, the company can log in and begin the registration process.

In conclusion, registering for corporate tax in the UAE requires companies to provide certain documentation, adhere to specific timelines and deadlines, and use the FTA’s online registration portal. By following these requirements, companies can ensure a smooth and hassle-free registration process.