Corporate Tax Registration: A Critical Step for New Businesses in the UAE

Corporate tax registration necessitates the submission of financial statements for a company that outline all the transactions, revenue, expense, and profit in detail. The financial records are important when it comes to calculating the tax liability. In June 2023, the UAE introduced a federal corporate tax system that came up with tax regulations for businesses. For years, companies in the UAE have worked without tax obligations. However now for businesses to operate, registration of tax has become mandatory. It is also very important to meet the corporate tax registration deadline to avoid penalties.

In this article, we will walk you through a comprehensive corporate tax registration guide to help your business comply with the regulatory framework for taxation in the UAE.

Who is Liable to Register for Corporate Tax?

Businesses that are liable in the UAE to register for corporate tax fall into the following three categories.

Mandatory Registration

Any business in the UAE with more than AED 375,000 income annually is liable to register for corporate tax.

Voluntary Registration

Businesses that lie under the earning of AED 375,000 can opt for voluntary registration. 

Free Zone vs. Mainland Businesses

Businesses operating in free zones do not need to pay corporate tax under the UAE’s Qualifying Free Zone Person (QFZP) rules if they meet the specified criteria.

Documents Required for Corporate Tax Registration in UAE

The following documents are mandatory to submit for tax registration as specified by the UAE Federal Tax Authority (FTA). However, the document requirements vary based on the size and nature of the businesses. 

For Individuals:

• Trade license (if applicable)
• Emirates ID /Applicant’s passport

For Legal Identities:

• Trade license
• Emirates ID /Passport
• Proof of authorization (e.g., Power of Attorney)

Guide to Corporate Tax Registration UAE

Follow the steps below to register for your business tax in the UAE

1. Sign up to the EmaraTax account and then log in to access the portal.
2. After logging in, navigate to the dashboard and look for the taxable person, link one to proceed with the corporate tax registration process. 
3. Go to the Corporate Tax section in the Dashboard and click on register to start the process.
4. You will see a page with registration guidelines. Read and follow through all the requirements and click on the start button to proceed.
5. Choose a business type and provide information in the fields related to your business.
6. Provide identification details such as trade number, legal name, and license number. 
7. Provide details related to your business nature and activities.
8. Provide detailed information about your company’s branches including business activities and trade license numbers.
9. Provide the complete address of your registered business.
10. Add an authorized signatory for your business if applicable. 
11. Submit the registration form after a thorough review.

Compliance and Regulatory Obligations

Companies must know the initial corporate tax filings as per the requirements for their business. Tax is filed within nine months of their financial year. It is important to adhere to the deadlines to avoid hefty fines. Secondly, entities must provide information regarding their business activities and services in detail for better verification. Transparency in business operations is essential for compliance.

The UAE corporate tax registration process follows robust protocols that are required for businesses to fulfill to reduce the risks of repercussions associated with non-compliance. Keep an active financial record to streamline the registration process. Starting from 1 August 2023, the Ministry of Finance has enforced strict administrative penalties for violations of tax laws. Businesses that fail to comply with tax requirements are imposed with large penalties. The non-compliance criteria include failure to declare taxon time, late tax payments, and inaccurate or insufficient financial records.

Tax Exemptions

In UAE corporate taxation requirements, some exemptions must be considered to obligate financial rules. The entities that are exceptions to tax requirements include the ones that serve the greater good. These include:

• Charities
• Investment funds
• NGOs
• Businesses that are part of the extraction of natural resources

The UAE goes above and above by providing a 0% rate for qualified operations, guaranteeing that some enterprises may prosper without the burden of taxes, even while the ordinary corporation tax rate provides a competitive edge. This multi-tiered approach to specific considerations and exemptions from taxes highlights the UAE’s strategic goal of promoting a strong and diverse economy.

Due to changing regulatory requirements, it might seem difficult to navigate the new business tax environment. Nonetheless, your business can confidently achieve compliance if you take a logical approach and have a thorough grasp of the registration procedure. At ZSConsultants, we guide you through detailed steps on how you can register for corporate tax in the UAE. Remember that prompt registration upholds the integrity of your company’s activities and brings your firm into compliance with the UAE’s commitment to international tax standards.