Following the implementation of the corporate tax regime across UAE in June 2023, there has been a significant shift in financial handling for businesses. All businesses, regardless of size or sector, are now mandated to register with the Federal Tax Authority.
In this article, we provide a thorough overview of the corporate tax registration process in Dubai, complete with step-by-step instructions, key deadlines to watch for, and valuable insights to help your business remain compliant with the law.
Overview of Corporate Tax in Dubai
Under the Federal Decree-Law No. 47 of 2022, the UAE imposes a corporate tax rate of 9% on taxable income that exceeds AED 375,000 (around USD 102,000). If a business’s taxable income is below this threshold, it will be subject to a 0% tax rate.
Furthermore, individual entrepreneurs will incur the 9% corporate tax only if their annual revenue exceeds AED 1 million, with no tax liability for those below this threshold. For Qualifying Free Zone Businesses, they pay 0% on qualifying income but 9% on non-qualifying income.
You can find more details on the UAE Corporate Tax Calculator.
Regardless of tax liability, all businesses must register with the UAE Federal Tax Authority to obtain a Corporate Tax Registration number, lest you pay a penalty of AED 10,000 for non-registration.
When do you need to Register for Corporate Tax in Dubai
To determine when to register for corporate tax in Dubai, businesses must adhere to specific deadlines set by the Federal Tax Authority (FTA) based on their incorporation date and type:
A. For Businesses Established Before March 1, 2024:
If the business license was issued in January or February must register by May 31, 2024. However, for licenses issued in March or April were required to register by June 30, 2024, and so forth, with the final deadline for December licenses being December 31, 2024.
B. For Businesses Established On or After March 1, 2024:
New entities must register within three months from their date of incorporation or recognition. This applies to both UAE-based entities and foreign entities managed in the UAE.
C. For Non-Resident Entities:
Non-resident businesses with a permanent establishment in the UAE must register within six months from the date of establishment. Regardless of whether a business is liable for corporate tax, all entities must apply for registration with the FTA.
How to Complete Your Corporate Tax Registration in Dubai
Documents Required for Corporate Tax Registration in Dubai, UAE
When registering for corporate tax in Dubai, you will be required to have the following documents:
- Copies of passports/ Emirates ID for shareholders and key decision-makers
- Trade License
- Memorandum of Association (MOA)
- Office lease agreement
- Bank reference letter
- Documents authorizing the signatory to act on behalf of the entity.
- Annual financial audit report (if applicable)
It’s important to note that submitting outdated or incorrect documents can lead to penalties. Therefore, ensure all documents are current and accurate before submission. Emerhub’s local experts will handle the necessary submissions for your company’s tax registration in your stead, ensuring that everything is prepared and submitted accurately.
Essential Steps for Corporate Tax Registration in Dubai
Once you have all the necessary documents, the next step is to submit your application to FTA. Once your application is submitted, the Federal Tax Authority (FTA) will review your application and issue a Tax Registration Number (TRN) upon approval. This process typically takes up to 20 business days, but may vary if additional information is requested. Upon approval, you will receive a notification in your registered email with your Tax Registration Number (TRN).
What to Expect After Registering Corporate Tax
Following your corporate tax registration, you will be expected to undergo tax compliance. This includes complying with tax deadlines and detailing information about their financial activities.
By implementing strong disclosure protocols and maintaining accurate records, companies can mitigate the risks of non-compliance while also adhering to regulatory requirements and practicing sound business management.
Emerhub will assist your business by providing a comprehensive range of services tailored to ensure compliance with local regulations. Our experienced accountants handle tax reporting and compliance, ensuring that all financial activities are accurately recorded and reported.
Are you ready to register your corporate tax in Dubai? Fill out the form below and get in touch with our advisors today!
