The Ministry of Finance launched the Corporate Tax in the UAE in 2022. However, the new system was implemented in full swing in June 2023. Regarded as “Business Tax”, “Business Profit Tax”, or “Corporation Tax”, the corporate tax is a direct tax paid to the government by corporations and commercial entities based on their assessed income. It strictly follows the best global practices and aligns with international standards enabling the companies to conform to the UAE laws and explore the possibilities for higher income. This guide will take you through all the details and basics of Corporate Tax, including the deadline for corporate tax registration in UAE.
Corporate Tax Registration in the UAE
The Corporate tax regime was introduced in the UAE to improve the position of the country as the preferred business and investment destination of choice and meet its established strategic imperatives. It also encourages tax transparency to curb harmful tax competition and reciprocate with developed countries.
According to Federal Decree Law 47 of the Federal Tax Authority (FTA), every taxable entity, including the exempted ones, is required to register for corporate tax in the UAE under the novel CT regime. Fulfilling this obligation benefits companies and their owners in many ways. For example, they can stay compliant with the tax law and follow up on changes. They can easily identify malicious tax practices and follow supreme tax standards.
Corporate tax registration deadline UAE
The law states that taxable persons and entities are required to register for the Corporate Tax with the FTA in a specified format, within a timeline declared by the authority and obtain a Tax Registration Number. Once the registration is complete, the taxable entity is required to pay a Corporate Tax of 9% on taxable income above AED 375,000, and 0% on taxable income up to AED 375,000. Further, Corporate Tax returns must be filed for a tax period within 9 months from the end of a specific period.
Following the corporate tax registration deadline UAE helps companies minimize their after-tax revenue and return it to shareholders. This impacts both individuals with direct shareholdings and indirect shareholders.
If you own a business, you need to be informed of the deadline for corporate tax registration in UAE. Connect with Shuraa and get the details.
Categories exempted from Corporate Tax in the UAE
Although exempted entities are also required to register for Corporate Tax under the rule of FTA, they are subject to a 0% of corporate tax. The exempted category includes the following: –
- The individual salary of an employee. However, if the individual earns from activities conducted under a freelancing license, then their earnings will be subject to Corporate Tax.
- Shares/assets bringing in payments, capital gains, or any income earned by individual capacity
- Real estate Investments
- Potential intra-group transactions or reorganizations
- Income received by foreign investors from dividends, gains, royalties, and similar investment returns, but not through business or business activity
Eligibility for Corporate Tax Registration in the UAE
According to the UAE Law for Corporate Tax, there are two conditions for corporate tax registration –
- Mandatory Registration
- Voluntary Registration
Both types of registration are based on specific criteria, which you can learn from the corporate tax consultants of Shuraa Tax. In addition, they will assist you in the registration process and filing for returns accurately and on time.
Deadline for corporate tax registration in UAE
Federal Decree-Law No. 47 of 2022 mandates that all taxable persons adhere to a specified timeline for tax registration to ensure compliance with the UAE’s tax laws.
Resident juridical persons/corporates in the UAE established before 1 March 2024
The deadline for corporate tax registration in UAE is based on the month the commercial license was obtained in accordance with the following:
Date of issuance of the license – Deadline
1 January – 28/29 February -31 May 2024
1 March – 30 April -30 June 2024
1 May – 31 May -31 July 2024
1 June – 30 June -31 August 2024
1 July – 31 July -30 September 2024
1 August – 30 September -31 October 2024
1 October – 30 November 2024 -30 November 2024
1 December – 31 December -31 December 2024
For entities that do not have a license as of 1 March 2024, their application deadline would be three months from the mentioned date. On the other hand, for entities with multiple commercial licenses, the relevant deadline would be assessed based on the license with the earliest issuance date.
Resident corporates in the UAE established on or after 1 March 2024
- If the entity is established under the laws of the UAE, the deadline would be 3 months after the date of establishment
- If the entity is established under the laws of a foreign jurisdiction but centrally managed in the UAE, the deadline would be assessed 3 months after the end of the financial year of the entity
Non-resident corporates in the UAE established before 1 March 2024
- For a non-resident person having a Permanent Establishment in the UAE, the deadline would be the date falling nine months after the creation of the PE
- For a non-resident person having a nexus in the UAE, the deadline date would be evaluated three months after 1 March 2024
Non-resident corporates in the UAE established on or after 1 March 2024
- For a non-resident person having a Permanent Establishment in the UAE, the date falling six months after the formation of the PE
- For a non-resident person having a nexus in the UAE, the deadline date would be three months after the formation of the nexus.
Resident natural persons involved in business during 2024
The deadline for corporate tax registration in UAE for this specific category is 31 March in the year following the year in which their turnover exceeds the threshold of AED 1 Million.
Non-resident natural persons involved in business during 2024
The deadline date would fall 3 months after the date on which they meet the UAE corporate tax requirements.
Additionally, there are no specific deadlines mentioned in Decision Number 3 of 2024 for branches or other local establishments that were established before 1 June 2023, the day corporate tax was introduced in the UAE. Nevertheless, the law outlines administrative penalties for any failure or negligence to register in accordance with the specified timelines.
Corporate Tax De-registration and Tax Return Filing in UAE
According to the FTA guidelines, businesses must file a tax return within nine months of the end of each relevant tax period. Moreover, they can file a single consolidated tax return, rather than filing multiple returns.
Further, if at a point, the business plans for de-registration, the FTA de-registers it successfully if it files corporate tax returns and settles all of its tax liabilities and penalties due for periods up to and including the date of termination.
Here’s how Shuraa can help
Shuraa Tax professionals, with their expertise and significant experience in corporate tax-related matters across all industry sectors, will assess the impact of corporate tax on your organization and assist with all your corporate tax obligations, including CT registration, tax return filing, de-registration, and others.
Book your free consultation with the tax experts of Shuraa Tax only at www.shuraatax.com.
