What is Corporate Tax in UAE?
The Corporate tax is a 'direct tax' levied from the net income or profits of the corporation or business. It is also known as "Corporate income tax" or "Business Profits tax" in other jurisdictions. It helps the UAE meet international tax transparency standards and prevent harmful tax practices. The UAE introduced this federal corporate tax system on 1st June 2023. This article explores the key aspects of UAE corporate tax, including rates, exemptions, and applicability.
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Get Started!Who is subject to Corporate tax in UAE?
In UAE, companies or persons that fall under the following criteria are required to pay corporate tax.
Who is exempted from Corporate Tax in UAE?
Below, we have given about the companies or businesses exempted from corporate tax in UAE either automatically or through submission of an application to the Federal Tax Authority (FTA).
Automatic Exemptions from Corporate Tax:
Tax Exemptions Requiring Application:
UAE Corporate Tax Rates
In the following table, we have given the taxable profit and its equivalent corporate tax in UAE,
Taxable profit | Applicable corporate tax |
---|---|
0% | |
9% | |
15% |
Also read: How to calculate corporate tax in UAE?
How to register for Corporate tax in UAE?
Below, we have given the brief steps to capture the corporate tax registration process in UAE,
1. Log in to EmaraTax: Use your credentials or UAE PASS to access the EmaraTax user dashboard.
2. Check Taxable Persons List: The list should display businesses registered under your profile. If empty, click "Create" to add a new taxable person (your business).
3. Initiate Corporate Tax Registration: Locate the "Corporate Tax" tile on the dashboard and click "Register" to begin the registration application.
4. Complete Registration Application: The EmaraTax platform will guide you through the application process, prompting you for the necessary information.
5. Submit Application: Once you've entered all the required details, submit the application electronically.
6. Wait for Response: FTA could respond to the application after 20 business days from the submission date.
7. Get a Tax registration number (TRN): You'll receive a tax registration number (TRN) for your business after the successful registration.
Learn more: Steps to register for corporate tax in UAE?
Conclusion
The UAE implemented a federal corporate tax system on June 1st, 2023. Most businesses operating in the UAE are subject to the tax, with a 0% rate for profits below AED 375,000 and a 9% rate for exceeding profit. We hope you know who is subject to the tax, exemptions, corporate tax registration procedures, and tax rates with this article. Choose Filings.ae experts to make your corporate tax registration process simpler.
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Get Started! Updated on: September 5th, 2024 5:22 PM