Decisions No. 10 & 3 of 2024 were Issued by the UAE Government by declaring mandatory registration for all taxable entities including free zone companies. Earlier in December 2022, the new legal regime of the corporate tax UAE was introduced by the Ministry of Finance and was declared effective from June 2023, for adjusting the companies’ fiscal years operating within the UAE. Due to compliance and risk management, audit firms in Dubai and all tax advisors in the UAE including corporation tax consulting have started guidance in respect of corporate tax law implementation. This blog outlines the details with respect of the registration process for companies in the UAE for corporate tax, critical deadlines, procedures, and the types of reliefs that are accessible so companies can steer clear of the penalties and compliance with international standards.
Ultimate Checklist for Corporate Income Tax Registration in the UAE
Before the corporate tax registration deadline in the UAE, businesses should thoroughly assess their operational readiness. Key actions to consider include:
- Maintain Comprehensive Books of Accounts: Ensure all financial records are up-to-date and accurately reflect business activities.
- Verify Accurate Financial Statements: Confirm that there are no undisclosed incomes or expenses and that the balance sheet includes only actual assets and liabilities from the previous year.
- Separate Financial Records for Each Entity: Prepare distinct trial balances for each business entity to maintain clarity and precision.
- Accounting Standards compliance:- Ensure accounts, including inventory, are maintained as per the IFRS (International Financial Reporting Standards).
- Segregate Free Zone and Mainland Transactions: Keep transactions from free zones separate from those conducted in the mainland to avoid compliance issues.
- Align Sales Records with VAT and Corporate Tax: Ensure that sales figures reported for VAT purposes match those reported for corporate tax.
- Document Capital Investments: Record capital in the books to support investments and spending, with proper documentation as proof.
- Reconcile Bank Transactions with Turnover: Ensure that all bank account transactions are consistent with the reported turnover.
Preparation of Necessary Documentation:
Businesses must gather essential documents for corporate tax registration, including: Businesses must gather essential documents for corporate tax registration, including:
- Trade License
- Copy of passport of the owners, partners, or shareholders
- Memorandum and Article of Association
- Contact information of a responsible person
- Complete company address
Categories of taxable persons:
The following subtopics represent the checklist of the guide aiming to explain the general procedure and conditions for registering corporate tax in the UAE. Below are the categories of taxable persons:-
- Legal Persons
- UAE Public Joint Stock Company Currently, the aggregate of the population of the members of the board of directors of UAE Public Joint Stock Company is 13.
- UAE Private Company (including Establishments)
- UAE Partnership
- Foreign Company
- Trust/ Foundation/ Charity
- Federal/Local/emirate Government Entity
Other
- Natural Persons/ Individual
- Sole Traders/Establishment or Civil Company
- Partner in a Partnership
- Club, Association, or Society
The Corporate Tax registration is available for the license of any UAE Public Joint Stock Company and any UAE Private Company (Establishment).
Corporate Tax Registration Details of the Time Frame:-
For businesses with a financial year running from January 1st to December 31st, the registration timelines are as follows:For businesses with a financial year running from January 1st to December 31st, the registration timelines are as follows:
Registration timelines and financial year ends:
| Financial Year End | Registration Deadline | Registration Period |
| May 31st | February 28, 2025 | 26 months |
| December 31st | September 30, 2025 | 33 months |
Corporate Tax Registration Manual:
The FTA has included a User Manual which depicts how the interface of the EmaraTax portal operates as well as instructions to be followed. Guide on How to Register for Corporate Tax
- Sign-up/Sign-In:- Before proceeding with the subsequent step, the user must first Sign In to the EmaraTax Portal. Go to EmaraTax Portal linking, and input the email address and password that was used during registration of the EmaraTax account. If there is no account, first click “sign-up”. For the currently used FTA accounts not yet migrated, first, forget login details and then set a new password. However, you can use UAE Pass sign-in to log in also you can log in with your password and username.
- New Taxable Person Profile:- Coordinators must formulate a New Taxable Person Profile.
In case the list of taxable persons is empty, register a new profile, completing the profile name in English and Arabic, as well as the preferred language of communication, and the channel. Click 'Create'.
- Select Taxable Person:-Select the taxable person from the list and then click on ‘View’, to get to the dashboard.
- Initiate Registration:- Navigate to the Taxable Person dashboard and click on the Corporate Tax title and click on ‘Register’. Drawn directions and instructions, followed by the confirmation of the decision by checking a box with it and ‘Start’ to come to the page with the CT registration application.
- Provide Entity Details:- Please give information on the entity type, subtype and date of incorporation. Certain fields will be auto-populated in case you have your VAT registration number. To continue further to the section ‘Identification Details’, click on the ‘Next Step’ button.
- Enter Identification Details:- Maintain details concerning the license of the business, the allowed activities, owners, and branches of business in the region. After filling in the data on this page, the applicant can click the ‘Next Step’ button to be taken to the ‘Contact Details’ page.
- Enter Contact Details:- Please fill in the registered address of the business. In case many addresses are provided, indicate the accompanying details of the main business operations. Select ‘Next Step’ to go to ‘Authorized Signatory’.
- Authorized Signatory Information:- When editing details of the authorized signatory, include the name, Emirates ID/Passport copy, and other documents that support the authorization. You are also allowed to input more than one authorized signatory if the need arises. To move to the next step of the ‘Review and Declaration’ link, click ‘Next Step’.
- Review and Declaration:- It is important that one thoroughly double-check all the information that has been entered into the database. Tick this check box to affirm the accuracy of the above information, then click ‘Submit’ to complete the Corporate Tax Registration application.
- Approval Process:- After submitting, the FTA will either approve the application, deny it, or ask for more information and inform the applicant.
- Post-Registration Considerations:- Each legal individual, even if he is a member of a group of companies, must complete the procedures for corporate taxation. Each company that is related should determine which of them should be included in the ‘’Tax Group’’ before registering the service. Individuals can go ahead with the registration of the single entities. The registration period will end on the date that is the same as the filing of the first tax return for corporations thus providing minimal time for entities to register.
Key Points of Corporate Tax Registration in 2024
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Mandatory Registration: All entities including free zone entities are affected by the new registration deadline and consequences thereof and they are required to pay corporate tax through registration depending on their licenses’ issuance date and penalties are provided for in this law.
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Registration Timeline:- The UAE has a progressive system of corporate tax registration timetable which depends on the license issuing date of a company. Thus, this approach facilitates the movement from one sector to the other more efficiently. The important dates are from 31 May 2022 to 31 December 2024, implying that organizations ought to be cautious and ready to avert requisite penalties.
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Consequences of Missing Deadlines:- The business must register for corporate tax before the deadline for failing to do so incurs the business a penalty fee of AED 10000 and legal consequences. Still, it leaves an opportunity for the Federal Tax Authority (FTA) to register an entity and make them liable for past tax years, hence it is always advised to be compliant on time.
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Competitive Tax Framework & Ongoing Compliance:- UAE Corporate tax plays an important role in maintaining a good business climate with a tax rate of 9% and other requirements like certain exclusions and zero rates on the first AED 375,000 of assessable income. After registration, the operations of the businesses should meet certain requirements such as; documentation, transfer pricing, and use of Double Taxation Agreements not to be taxed twice.
Understanding of International Standards:-
The structure of the UAE’s corporate taxation system is particularly appropriate for its focus on international standards and for the development of an effective legislative base for the inviting of foreign investments. Thus, the standard corporate income tax rate of 9% is lower than the average rates in the EU, the OECD, as well as in G7 countries. This rate concerns several legal forms of Company activity, for example, LLCs and PJSCs.
Identifying Your Business’s Tax Obligations:-
These details include; entity type, trade license, business activities, and substantial ownership interest to be registered for corporate tax. There are some other requirements to register such as non-residents having a business establishment in UAE must register. Businesses with turnover not exceeding AED 3m have some benefits understood as reliefs but there are anti-abuse rules that a business must meet.
Taxable Income and Rates:-
The UAE taxable income is obtained from the accounting net profit with certain adjustments on allowable and prohibited deductions. Businesses can deduct 50% of entertainment costs and net interest costs provided the later does not exceed 30% of EBITDA. Other expenses not allowed for deductions include fines, and recoverable VAT included in the supplies made. The use of tax losses is indefinite after loss transfer of the business by restricting the offsetting from taxable income to 75%, and transfer can be done among group companies holding at least 75% interest.
Utilizing Professional Services for Setup
Professional service providers can assist businesses in registering for the services while adhering to the laid down rules and regulations. Some of these services include getting the right trading license, user-friendly documentation, and other approvals and permits for certain trades.
Exemptions and Special Considerations
In this case, some categories of taxpayers that are not subject to corporate tax include charitable organizations, public benefit organizations, investment funds, and industries that engage in the business of extracting natural resources. Personal income continues to be left untaxed which preserves the favorable climate for individual income. Some business fields are supported by a 0% corporate tax rate for activities that meet the requirements set by the government.
Criteria for Exempt Income:-
Some of the exempt persons are persons earning income from international transport operations, persons with an income of less than AED 3 million, operations of an accounting year below AED 3 million, and persons who are not part of a multinational group which is bigger than AED 3. 15 billion in revenues. Activities that make the company qualify and follow the limits of non-qualifying revenues is crucial to ensure exemption.
Benefits for Free Zone Businesses
The free zone businesses are relieved from tax if the business earns ‘Qualifying Income’ and also fulfills the transfer pricing regulation where the tax rate is zero percent. These business entities can conduct specified qualifying activities with, mainland or any person that is not resident in the UAE without losing their tax exemptions.
Compliance with Transfer Pricing Rules in Corporate Tax
It is expected that in nine months after the end of the chosen tax period, businesses have to file tax returns and make payments. They are to keep supporting records for seven years and inform the FTA of any changes within 20 days. The law applies and adheres to the Economic Substance Regulations to check the reported income against economic activity.
Keeping Up with Transfer Pricing Rules
Transfer pricing rules insist on dealing with related parties at arm’s length by recording related party transactions. In their case ,multinational companies based in UAE must keep records for CbC reporting where the group revenue of the business entity is over AED 3. 15 billion. As a result of this, international tax cooperation standards are complied with.
Leveraging Double Taxation Agreements
DTAs are there to ensure that when operating in several countries there should not be the repetition of taxes on earnings. Companies are allowed to offset foreign taxes they pay which helps support business and trade internationally. DTAs increase the UAE’s competitive advantage as a location for international business.
To comprehend the basics of corporate tax registration in UAE one must gain sufficient knowledge on critical timeline, registration procedure and compliances. The UAE has set out an excellent corporate tax regime that enhances the competitiveness of the corporate environment concerning the taxation system. Non-compliance after registration mainly around transfer pricing rules and utilization of DTAs makes sure that companies maintain good standing with the authorities.
Frequently Asked Questions
What is the rate of corporate tax in the UAE?
The standard corporate tax rate of 9% is implemented above the threshold of 375000 AED in the UAE and the rate is still at 0% for below the threshold. This rate is lower than the global average; the tax environment remains relatively favorable up to the implementation of the new rate.
Which organizations or companies are out of the UAE corporate tax?
Currently, corporations including non-profit organizations, investment funds and enterprises operating in the extraction of natural resources are free from the UAE corporate tax. Moreover, other persons receiving income from abroad in connection with international transportation are also relieved from this taxation system.
How do the businesses in free zones stand to benefit from the UAE corporate tax regime?
