- July 13, 2023
- Posted by: Shuraa Tax Consultant
- Category: Corporate Tax
Businesses liable to corporation tax need to register for corporate tax in the UAE and receive a corporation Tax Registration Number. Contact Shuraa’s competent professionals for corporation tax registration and other query such as documents required for corporate tax registration in UAE.
The UAE has announced the adoption of a 9% corporation tax on business earnings, with an AED 375,000 threshold. Businesses planning for the planned UAE corporate tax must grasp important administrative procedures such as corporate tax registration, deregistration, submission of corporation tax reports, payment and documents required for corporate tax registration in UAE.
Consulting with corporate tax advisors in Dubai will enable business owners to have a grasp of such compliance obligations in advance. Failure to meet these rules may result in significant company tax fines in the UAE.
Registration for Corporate Tax in UAE
According to the FTA’s Federal Decree Law 47 of 2022, the corporate tax regime requires every taxable person, including a Free Zone Person, to register for Corporate Tax and get a Registration Number. The Federal Tax Authority also demanded that certain exempted persons to register for Corporate Tax.
Entities subject to taxation must submit their Corporate Tax returns for a specific Tax Period within a timeframe of 9 months from the conclusion of that tax period. This deadline is typically applied to the payment of all Corporate Taxes owing for the Tax Period for which the return is submitted.
In the instances specified by the Minister, a Taxable Person must register for the Corporate Tax with the Federal Tax Authority in a certain format and within the timeframe specified by the authority.
The Taxable Person or Independent Partnership is required by the Authority to register for Corporate Tax and get a Tax Registration Number. From the moment an individual becomes a Taxable Person, the Tax Authority should have a distinct judgment for Corporate Tax Registration.
Once the corporation tax registration is completed, taxpayers must pay a normal rate of 9% on taxable profit more than AED 375,000, while taxable profit less than AED375,000 is charged at 0%. For free zone entities preferential corporation tax rate may apply if required conditions are met. As per preferential corporation tax structure eligible FZ businesses will pay 9% only on non-qualifying income profit whereas qualifying income will be subject to tax at 0 %.
Documents Required for UAE Corporate Tax registration
Businesses must be prepared to provide the necessary paperwork in order to register for Corporate Tax in the UAE. The registration and payment of corporate taxes will be done online. Documents required for corporate tax registration in UAE are:
Copy of Trade License:
Businesses need to provide a copy of their valid and unexpired trade license. The trade license is a legal document that allows a company to conduct its specific business activities.
Passport Copy of The Owner/Partners:
The passport copies of the owner or partners who own the trade license must be submitted. These passports should be valid and not expired. This helps establish the identity of the individuals associated with the business.
Emirates ID of the Owner/Partners:
Latest Emirates ID copies of the owner or partners who own the trade license are required. The Emirates ID is a unique identification card issued to residents of the UAE. It functions as an official means of identification.
Memorandum of Association or Power of Attorney:
Businesses must submit either the Memorandum of Association (MOA) or the Power of Attorney (POA). The MOA is a legal document that outlines the company’s constitution, including its objectives, shareholders, and management structure. The POA is a legal document that authorizes an individual or entity to act on behalf of the Company.
Authorised Person’s Contact Details:
The contact details, including a valid mobile number and email address, of the person authorised by the company for the corporate tax registration process need to be provided. This allows the authorities to communicate with the concerned person regarding the registration. Registrants can add one or more authorised signatories if needed.
Company Contact Details:
The complete address and P.O. Box number of the company must be provided. This information helps establish the location and mailing address of the business. Company’s mobile number and land line number need to be mentioned under this section.
Branch:
Select yes if you have branch. Registrants need to add details of local branch if any.
Details of branch are must like trade license. Business activity and ownership.
The above mentioned are the documents required for corporate tax registration in UAE and corporate tax registration documents UAE must be genuine and unambiguous. Submitting forged or out-of-date papers might result in penalties and legal issues.
Need for Corporate Tax Registration in UAE
The UAE Governance and the Ministry of Finance have developed a tax system and rules that may assist corporate taxpayers. If your company is subject to corporation tax, you can benefit from the following:
- Maintaining compliance with tax laws and monitoring changes
- Adhering to world-class tax standards
Corporate tax registration reduces a company’s after-tax revenue and hence ultimately returns to shareholders.
Who should register for Corporate Tax?
Every taxable business and certain taxable natural persons in UAE, even those in Free Zones, must register for Corporate Tax and get a CT Registration Number.
The UAE Law on Corporate Tax stipulates the following prerequisites for tax registration:
- Mandatory Registration
- Registration at the choice of FTA
Businesses must get a Corporate Tax Registration Number within a certain time frame, which is before filing of their first return.
The Federal Tax Authority requires specific individuals, autonomous partnerships, and so on, to register under the Corporate Tax policy and acquire a Tax Registration Number.
Who is Exempt from UAE Corporate Tax?
Despite the Federal Tax Authority’s desire that Exempted Persons register for corporation Tax, exempted businesses must pay 0% corporation tax.
There are several industries that are free from corporate taxation. Now, we will explore a selection of them:
- Corporate Tax will have no effect on the employee’s income. However, if the person receives revenue from freelancing activities or business activities (without license), he or she will be subject to corporate tax only if the annual turnover from such activities is greater that AED 1,000,000.
- Dividends, capital gains, or any other income obtained by personal potential were generated by shares or comparable assets.
- Real estate investment is permissible in the UAE unless the investor obtains a company license. The rental income generated by individual will not be taxed under CT.
- The Corporate Tax will have no effect on potential intra-group transactions or reorganizations subject to fulfilment of certain conditions.
- The corporate tax shall not be levied on dividends, profits, royalties, and similar investment returns received by a foreign investor unless they are gained via business or business activity.
Conclusion
Registering for Corporate Tax in the United Arab Emirates (UAE) involves the submission of specific documents. documents required for corporate tax registration in UAE include a copy of the trade license, valid passport copies and Emirates IDs of the owner/partners, the Memorandum of Association (MOA) or Power of Attorney (POA), contact details of the concerned person and the company. These requirements ensure that businesses comply with the tax regulations and provide accurate financial information. By understanding the necessary documents and following the online registration process, businesses can successfully complete their Corporate Tax registration in the UAE.
We at Shuraa Tax can provide you with several services that will help you successfully run your business in UAE. Contact our professionals right away to get started on your path to creating a flourishing company in the UAE. Our team of experienced company tax advisers is ready to help you in preparing for business tax. Call +971 508912062 or send an email to info@shuraatax.com get in touch with us.