Who should get corporate tax registration in UAE?

Corporate tax is a direct tax charged on the profit or net income earned by the corporation and other entities. In UAE, 9 percent is levied on taxable income exceeding AED 375,000, and it has been effective since June 2023. All "Taxable Persons", including free zone persons, must do the Corporate tax registration with the Federal Tax Authority (FTA) and obtain a Tax Registration Number (TRN). Failing to be registered leads to penalties and legal issues. In this article, you can understand the taxable persons, those who are exempted from corporate tax and the registration process in UAE.

Simplify the Corporate tax registration with Filings.ae experts!!

Get Started!

Who should register for Corporate tax?

Both  'residents' and 'non-residents' are taxable persons liable to pay corporate tax under the UAE CT law. They must register for corporate tax and obtain a tax registration number. Below, you can understand the distinction between resident and non-resident persons in UAE.

A resident person includes:

• Juridical persons, such as corporations, that are incorporated within the UAE.
• Foreign juridical persons that are effectively managed and controlled within the UAE.
• Natural persons who conduct business or business activities within the UAE and generate a turnover exceeding AED 1,000,000 per Gregorian calendar year from such activities.

A non-resident person includes:

• Non-resident juridical persons (foreign juridical entities) who have a Permanent Establishment in the UAE.
• Non-resident persons who derive income from sources within the UAE.
• Non-resident juridical persons that have a connection within the UAE due to earning income from immovable property within the country.

Who is exempted from Corporate tax registration?

Article 4(1) UAE Corporate Tax Law exempts particular persons from corporate tax who have strong public interest and policy justifications for not being taxed. Those exempted persons come under one of the following four categories,

1.Government entities include the federal government, local governments, government departments, government agencies, authorities, and public institutions of the federal or local governments.

2.Businesses involved in the extraction or non-extraction of natural resources and meeting the required criteria

3.Entities listed in Cabinet decision include government entities or qualifying public benefit entities.

4. Persons applied to the Federal tax authority (FTA) and show they met the necessary criteria,

• A pension fund, whether public or private or a social security fund, subject to supervision by the relevant authority in the UAE and meeting specific criteria;
• An investment fund that qualifies under specified criteria;
• A juridical person established in the UAE, wholly owned (either directly or indirectly) and controlled by one of the following exempt persons:
• A government entity,
• A government-controlled entity,
• An investment fund meeting the relevant conditions outlined in Cabinet Decision No. 81 of 2023;
• A public pension fund or, social security fund, or
• A private pension fund or social security fund fulfils the conditions outlined in Ministerial Decision No. 115 of 2023.

Note: Here, a person is used to denote a 'legal person', which means any entity recognised by the law with distinct rights and obligations

How to register for Corporate tax in UAE?

Emara Tax portal, the official e-service platform of FTA, is used to register for corporate tax online in the UAE. The following steps are to be done for the corporate tax registration in UAE.

1. Gather documents: Required documents include trade licenses, financial statements, passport copies of owners, etc. (Refer to the FTA website for the exact list).

2. Create an EmaraTax account: Register with your email and phone number or use UAE Pass. Select "Corporate Tax" and navigate to the registration application.

3. Fill out the application: Provide accurate company, financial, and contact details.

4. Upload required documents: Ensure files are in the specified format and size.

5. Submit the application: Review your entries and submit them electronically.

6. Await confirmation: The FTA will process your application and notify you of the outcome.

Learn more: Step by Step process for Corporate tax registration in UAE

Conclusion

Businesses operating in the UAE must carefully assess their activities and income to determine if Corporate tax registration is required. Whether you're a resident or non-resident entity, exceeding specific income thresholds or having certain connections to the UAE requires registration and tax liability. You could be exempted from the corporate tax if you fall into the specific criteria discussed in this article. If you're in the position to register for corporate tax, contact Filings.ae experts for a smooth registration.

Corporate tax registration made easier with Filings.ae!!

Get Started!