How to Register for Corporate Tax in UAE

Corporate Tax (CT) in the UAE is a federal tax levied on the net profits of businesses operating within the country. The UAE introduced Corporate Tax to align with global tax policies and to reduce dependence on oil revenues. The standard corporate tax rate is 9% for taxable income exceeding AED 375,000, while income below this threshold remains tax-free. Certain sectors, such as extractive industries and free zone entities meeting qualifying criteria, may be exempt or subject to different rates. Let’s find out how to register for corporate tax in UAE?

Corporate Tax in UAE

In UAE, all businesses, including Free Zone and mainland entities, must register for Corporate Tax, regardless of their taxable income. The tax rate is 0% for income up to AED 375,000 and 9% for income exceeding this amount. Registration is completed via the EmaraTax portal, requiring trade license details, business activities, and authorized signatory documentation. Upon registration, businesses receive a Tax Registration Number (TRN) and must comply with obligations such as filing tax returns within nine months of their tax period and maintaining accurate financial records.

Businesses ceasing operations must complete deregistration. Common registration mistakes include delays, incomplete submissions, and inadequate record-keeping, which may lead to penalties. Seeking professional guidance is advised to ensure compliance with UAE corporate tax regulations.

All About Corporate Tax Registration in UAE

Corporate Tax registration is mandatory for businesses operating in the UAE, including resident and non-resident companies. The Federal Tax Authority (FTA) oversees the registration process, and entities must comply to avoid penalties. Corporate Tax applies to various entities, including:

• Resident Judicial Persons: Companies incorporated in the UAE, including those in free zones.
• Non-Resident Judicial Persons: Foreign companies with a permanent establishment in the UAE.
• Natural Persons: Individuals conducting business activities meeting the taxable threshold.

Resident Judicial Persons

Resident judicial persons include:

• Limited liability companies (LLCs), private shareholding companies, public shareholding companies, and other UAE-incorporated entities.
• Businesses registered in free zones that derive taxable income from the mainland.
• Branches of foreign companies effectively managed in the UAE.

Tax Implications:

• Subject to 9% corporate tax on income exceeding AED 375,000.
• Exemptions apply to qualifying free zone persons.

Non-Resident Judicial Persons

A non-resident judicial person is an entity incorporated outside the UAE but earning income from UAE sources.

Tax Implications:

• Subject to corporate tax if they have a permanent establishment (PE) in the UAE.
• Required to register for corporate tax if their UAE-generated income meets taxable limits.

Natural Persons

Individuals conducting business in the UAE may be subject to corporate tax if they:

• Earn business or freelance income exceeding AED 375,000.
• Engage in commercial, industrial, or professional activities requiring licensing.

Exemptions:

• Employment income, rental income from personal properties, and investment returns are generally not taxable.

Key Documents Required for Corporate Tax Registration in the UAE

The documents needed for corporate tax registration in the UAE depend on whether the applicant is a natural or legal person.

For Natural Persons (Individuals):

• Valid Trade License (if applicable): Must be current and valid at the time of registration.
• Emirates ID / Passport: A valid identification document of the applicant.

For Legal Persons (Corporations or Entities):

• Valid Trade License: Must be up to date.
• Emirates ID / Passport of the Authorized Signatory: Identification proof for the authorized representative.
• Proof of Authorization: Documentation such as a Power of Attorney, if applicable.

Where Should You Register for Corporate Tax in UAE?

Businesses must register for Corporate Tax through the EmaraTax platform, the Federal Tax Authority’s digital system. Registration is available online, and businesses must ensure timely registration to avoid penalties.

Step-by-Step Guide to Registering for Corporate Tax

1. Log into EmaraTax

• Visit the FTA’s EmaraTax portal https://eservices.tax.gov.ae
• Enter your login credentials or create an account if new.

2. Add Taxable Persons

• Select “Taxable Person Registration“.
• Choose the type of entity you are registering (company, individual, branch, etc.).

3. Select Corporate Tax Registration

• Click on “Corporate Tax” under the tax registration options.

4. Review Registration Guidelines

• Carefully read the corporate tax guidelines and confirm understanding before proceeding.

5. Provide Entity Details

• Enter company details, including:
  • Trade name
  • Business address
  • Contact details
  • Legal structure (LLC, branch, free zone company, etc.)

6. Enter Identification Details

• Provide:
  • Trade License Number
  • Emirates ID (for individual businesses)
  • Passport Copy (for foreign business owners)
  • Memorandum of Association (MOA), if applicable

7. Add Business Activities

• Select and describe primary and secondary business activities.
• Mention industry classification codes where applicable.

8. Add Owners (if applicable)

• Provide details of owners/shareholders, including:
  • Name
  • Emirates ID/passport details
  • Shareholding percentage

9. Submit Application & Await Approval

• Review the entered details and submit the application.
• The FTA will review the application and may request additional documents.
• Upon approval, a Corporate Tax Registration Number (TRN) is issued.

Penalty for Non-Registration

Failure to register for Corporate Tax within the stipulated time results in penalties imposed by the FTA. Penalties include:

• AED 10,000 fine for late registration.
• Additional fines and legal consequences for non-compliance or misreporting.

What Happens After Registration?

Once your application is submitted, the Federal Tax Authority (FTA) reviews it and issues a Tax Registration Number (TRN) upon approval. The process typically takes up to 20 business days, though processing times may vary if additional information is required.

Ongoing Corporate Tax Obligations

After registration, businesses must comply with ongoing tax requirements, including:

• Filing Tax Returns: Corporate tax returns must be filed within nine months after the end of the tax period.
• Maintaining Accurate Financial Records: Businesses must keep detailed records for tax filing and audit purposes.
• Deregistration: If a business ceases operations, it must submit a final tax return and apply for deregistration.

Common Mistakes to Avoid During Registration

• Delays in Registration: Late registration can result in fines of up to AED 10,000.
• Incomplete or Incorrect Information: Ensure all details are accurate to prevent delays or rejections.
• Poor Record-Keeping: Inadequate financial records may lead to penalties or audits.

Deregistration Process

Businesses that close or cease operations must complete the deregistration process, which includes:

1. Filing the Final Tax Return: Ensure all outstanding tax liabilities are settled.
2. Submitting a Deregistration Application: This is done through the EmaraTax portal.

Related: Top Strategies for Corporate Tax Planning in UAE

Top Corporate Tax Mistakes Every UAE Business Should Avoid

FAQs About How to Register for Corporate Tax in UAE

What is the deadline for corporate tax registration?

Deadlines depend on business incorporation dates and specific FTA guidelines.

What are the penalties for late registration?

A penalty of up to AED 10,000 may apply for late registration.

Do Free Zone businesses qualify for tax exemptions?

They may qualify for a 0% tax rate if they meet FTA criteria as a Qualifying Free Zone Person.

When do natural persons need to register for corporate tax?

Natural persons must register if their business income meets the FTA’s specified thresholds.

Does corporate tax apply to non-business income for individuals?

No, non-business income such as salaries and investments is generally exempt.

Conclusion

Registering for Corporate Tax in the UAE is a mandatory requirement for businesses. By following the above steps and ensuring compliance, businesses can avoid penalties and streamline tax obligations. It is advisable to keep financial records updated and seek professional tax advisory for complex cases. For official registration, visit the FTA’s EmaraTax portal and complete the process as soon as possible.

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