Corporate Tax Registration
Corporate tax is a crucial factor for businesses operating in Dubai, UAE. In June 2023, the UAE government implemented a federal corporate tax applicable to all companies, both foreign and locally owned. This tax is set at a rate of 9% and is levied on taxable income, computed after deducting allowable expenses. All corporate entities operating in Dubai must adhere to tax regulations established by the Ministry of Finance and the Federal Tax Authority. Companies must file their tax returns annually and settle any tax liabilities accordingly. Additionally, the corporate tax regime provides various exemptions and reliefs.
The Ministry of Finance, UAE, introduced an enhanced corporate tax framework in 2022, signaling a significant shift in the UAE’s business landscape. Given its novelty in the UAE, companies may encounter difficulties in understanding corporate tax, its registration process, and associated procedures. Corporate tax consultants in Dubai can play a pivotal role in facilitating timely corporate tax registration in the UAE, assisting businesses in navigating this new regulatory landscape.
Corporate Tax Rates
The UAE Corporate Tax system introduces a tiered structure consisting of three rates:
Profits up to AED 375,000 annually are taxed at 0%.
Profits exceeding AED 375,000 annually are taxed at a rate of 9%.
Multinational enterprises (MNEs) falling under the scope of Pillar 2 of the BEPS 2.0 framework, with consolidated global revenues surpassing AED 3.15 billion, will be subject to varying rates in accordance with OECD Base Erosion and Profit-Sharing rules. However, until the adoption of the Pillar Two rules by the UAE, these multinationals will be taxed under the regular UAE Corporate Tax regime.
Taxable profits refer to accounting profits subject to specific adjustments.
Documents necessary for corporate tax registration
The corporate tax registration process is conducted online in the UAE. However, several documents are required for this registration:
- Copy of the Eligible Trade License
- Passport copy of the owners/partners/shareholders who own the license
- Emirates ID of the owners/partners/shareholders who own the license
- Memorandum of Association (MOA) or Article of Association (AOA)
- Contact details of the concerned person, including mobile number and email
- Company contact details, including complete address and P.O. Box
Corporate Tax Filing
if a company’s fiscal year starts from June 1, 2023, and ends on May 31, 2024, it will be liable for corporate tax starting from June 1, 2023. Consequently, the initial tax return filing for this period will be due on February 28, 2025.
Conversely, if a company follows a financial calendar year beginning on or after January 1, 2023, and concluding on December 31, 2023, it will be subject to corporate tax starting from January 1, 2024. In this scenario, the filing deadline for the corresponding tax period is likely to fall on September 30, 2025.
It’s crucial to highlight that the FTA (Federal Tax Authority) has introduced fines and penalties for corporate tax violations in the UAE. A penalty of AED 10,000 will be levied for late registration of corporate tax in the UAE.
Start of Financial Year | July 2023 – June 2024 | January 2024- December 2024 | April 2024 – March 2025 |
End of Financial Year | 30th June 2024 | 31st December 2024 | 31st March 2025 |
Filing and Payment Due Date | 31st March 2025 | 30th September 2025 | 31st December 2025 |
Corporate Tax Exemptions
The UAE government extends various tax exemptions and incentives to businesses, including:
Tax exemptions for specific industries: Certain industries, such as those in the extractive sector, benefit from tax exemptions provided by the UAE government.
Double Taxation Avoidance Treaties (DTAs): The UAE has established DTAs with several countries to prevent the double taxation of income. This enables businesses taxed in the UAE to potentially claim a credit against their tax liability in their home country.
Non-taxation of individual employment income: Income earned through employment is not subject to taxation in the UAE.
Exemption of other personal income: Dividend income is exempt from taxation. Additionally, rental receipts from investments in UAE real estate are not taxable, even if held through a private or family trust, subject to specific conditions.
Navigating corporate tax in Dubai can be intricate and subject to change. It’s crucial for businesses in Dubai to seek expert guidance to ensure complete compliance with all relevant laws and regulations.
By choosing Czar BizServ for your corporate tax registration needs in Dubai, you’re not only ensuring compliance but also unlocking opportunities for financial optimization and risk mitigation. Our dedicated team is committed to providing personalized assistance and support every step of the way, helping your business thrive in the dynamic landscape of Dubai’s corporate tax environment. With Czar Bizserv, you can navigate the complexities of taxation with confidence and focus on achieving your business goals.
