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Corporate Tax Registration Deadlines For Free Zone In The UAE

Latest UAE directives No.3/2024 and 10/2024 issued by the Finance Ministry made registration mandatory for companies with the specific guidelines having consequences 10,000 AED fine in case of failure to get registration in time. The Federal Tax Authority has introduced a decisive set of guidelines that mandate registration deadlines for corporate tax for both juridical and natural persons. The FTA’s recent Decision outlines specific registration deadlines for entities and individuals, emphasizing the importance of compliance to uphold the integrity of the UAE’s tax regulations. This comprehensive directive affects Resident and Non-Resident Persons alike and is a testament to the UAE’s dedication to maintaining its status as a leading business hub.

Registration Of Free Zone Companies Under Corporate Tax:

  • Free Zone Entities are Subject to Corporate Tax (CT) Liability: Businesses and branches registered in a Free Zone are subject to CT Law. They must carry out their regular compliance obligations, including transfer pricing obligations.
  • Person in the Qualifying Free Zone (QFZP): A Free Zone entity is entitled to a 0% CT rate on its qualifying income if certain requirements are fulfilled. Income that is not eligible, however, will be charged the usual 9% CT rate.

Eligibility for the 0% Corporate Tax Rate:

In the United Arab Emirates, a Free Zone entity can be eligible for the 0% Corporate Tax (CT) rate by satisfying the specific criteria as stated below: A free Zone entity including all branches, must be registered in a Free Zone in the United Arab Emirates with following features

  • Preserve Adequate Substance: The entity needs to continue being economically active in the Free Zone.
  • Does Not Elect to be Subject to CT: The entity shouldn't have decided to be subject to the normal UAE CT rates.
  • Derive Qualifying Income: The income must satisfy the standards of the UAE CT regime.
  • Adheres to Transfer Price Criteria: The entity has to maintain proper transfer price documentation and adhere to the Arm's Length Principle.
  • Comply with any further requirements: Any other specifications given by the

Registration Deadlines for Free Zone (Juridical Persons)

Entities recognized before March 1, 2024, are subject to a structured timeline for completing their registration process. The FTA has categorized the deadlines based on the month in which licenses were issued, ranging from January to December.

Detailed Timeline for Compliance

  • January or February License Issuance: Registration must be finalized by May 31, 2024.
  • March or April License Issuance: Registration must be completed by June 30, 2024.
  • Subsequent Months: The deadlines continue in a similar pattern, with each subsequent month having a specific cut-off date for registration.

Who Should Register and What's the Process?

In the United Arab Emirates, all individuals who are subject to taxation must electronically register with the Authority for Corporate Tax (CT) within a designated period and acquire a Tax Registration Number. A Taxable Individual is required to go through this registration process even if they are already registered for Value Added Tax (VAT). Administrative duties are made simpler by the CT Law, which requires each Taxable Person to file a single tax return for each tax period.

The following are some instances of deadlines for filing, payment, and Transfer Pricing (TP) disclosures:

First Reporting PeriodRegistration DateFiscal Year EndDate of Submission for First CT Return
December 2022June 2023June 2024 – July 2023To be decided on March 31st, 2025
January to DecemberFrom Jan to Dec  2024To be decidedSeptember 30th, 2025,
2024decided December 2024To be decidedupon September 30, 2025

The period is 9 months as the deadline to complete a file electronically from the relevant tax period conclusion. Additionally, any UAE Corporate Tax that is owed must be paid within these deadlines.

UAE’s Corporate Tax Compliance Landscape

The Mandate of Compliance and Consequences of Non-Adherence

In the pursuit of fortifying its tax infrastructure, the UAE’s Federal Tax Authority (FTA) has delineated a clear framework for Corporate Tax compliance. Under Cabinet Decision No. 75 of 2023, entities are mandated to adhere to the registration requirements set forth by the Federal Decree-Law No. 47 of 2022, along with its subsequent amendments. Failure to comply invites administrative penalties, underscoring the FTA’s commitment to maintaining a transparent and robust economic environment.

FTA’s Initiative for Taxable Entities

The FTA is starting a series of informative webinars to help with a seamless transition to the Corporate Tax regime. This initiative marks a significant phase in the broader campaign to elevate the business community’s understanding of Corporate Tax obligations. The webinars are designed to impart a comprehensive understanding of the registration process, ensuring that all taxable persons are well-equipped to meet the impending deadlines.

Empowering Stakeholders Through Resources and Guidance

The FTA encourages stakeholders to immerse themselves in the Corporate Tax Law by exploring the wealth of resources available on its official website. Decision No. 3 of 2024, which specifies the taxable entities’ registration deadlines, is especially important.

Streamlining the Registration Process via EmaraTax

The FTA has made the Corporate Tax registration procedure more efficient by utilizing the 24/7 digital tax services platform EmaraTax.  The user-friendly interface allows for a straightforward registration experience, comprising four simple steps that can be concluded swiftly.

Simplified Procedures for Existing Taxpayers

Taxpayers with prior registrations for VAT or Excise Tax benefit from an expedited process. By logging into EmaraTax, they can easily navigate the Corporate Tax registration form and submit the required documentation. A unique Tax Registration Number for Corporate Tax is then issued upon approval.

Onboarding New Taxpayers

New taxpayers are guided to establish their user profiles on the EmaraTax platform. The FTA’s e-Services portal facilitates this setup, enabling new users to create an account and proceed with the Corporate Tax registration seamlessly

Implications Of The Latest Amendment To Free Zone:

The Federal Tax Authority's latest orders No. 3/2024 and 10/2024 emphasize how important registration is for corporate tax compliance in the United Arab Emirates (UAE). These directives, which have strict guidelines and include a 10,000 AED punishment for non-compliance, are intended to strengthen the UAE's commitment to promoting an open and effective tax system. The inclusion of Free Zone enterprises under the corporation tax framework is noteworthy as it emphasizes the all-encompassing scope of the FTA's ruling. Under Corporate Tax (CT) law, Free Zone entities—including branches—are considered taxable individuals and are obligated to comply with certain laws, such as those about transfer pricing.0% corporate tax is applied to Free Zone firms that meet the requirements to become Qualifying Free Zone Persons (QFZPs) upon the fulfillment of certain requirements set forth by the UAE government. This entails keeping adequate substance, complying with documentation and transfer pricing guidelines, and being registered or incorporated in a Free Zone.

All things considered, the goal of these directives is to provide fair taxes and clarity for businesses that operate within the UAE's Free Zones. The need that all taxable individuals, including those operating in Free Zones, register for Corporate Tax (CT) within the allotted time limit highlights the UAE's dedication to upholding its position as a premier economic hub with an open and effective tax system.

Shayan Khan is an experienced Corporate Tax Consultant with over 4 years of expertise. He's skilled in negotiating and investigating taxes with government bodies like the Federal Tax Authority. Shayan excels in reviewing and drafting tax documents and offers strategic advice on complex tax matters. Clients trust his guidance in navigating tax procedures and minimizing liabilities. Read more