How to Register for Corporate Tax in the UAE: Step-by-Step Guide

How to Register for Corporate Tax in the UAE: Step-by-Step Guide

Introduction:

The introduction of corporate tax in the UAE marks a new chapter for businesses operating in the region.

As of 2023, companies in the UAE must comply with the new Corporate Tax (CT) law, and understanding how to register for it is crucial for businesses. In this guide, we will walk you through the process step-by-step to ensure that your business meets all the legal requirements.

Step 1: Understand the Corporate Tax Law in the UAE

The Corporate Tax (CT) rate in the UAE varies depending on the income level of the business. The general rate is 9%, which applies to taxable profits exceeding AED 375,000. For profits below this threshold, businesses will be subject to a 0% tax rate.

It’s important to understand that the corporate tax is designed to align the UAE’s tax system with international standards and enhance the country’s economic competitiveness.

• Who is eligible? All businesses with taxable income exceeding the stipulated threshold will be required to pay corporate tax. Businesses in certain industries or free zone entities (subject to specific criteria) might qualify for exemptions.
• Tax Rates: The UAE has established a corporate tax rate based on income levels. Businesses with higher taxable income may face a higher tax rate, while businesses with smaller incomes may pay a lower rate.
• Free Zone Exemptions: Some companies operating in designated free zones may benefit from corporate tax exemptions, depending on their activities and compliance with regulations.

Step 2: Register with the Federal Tax Authority (FTA)

The registration process is carried out through the Federal Tax Authority (FTA), the body responsible for managing tax-related matters in the UAE. Here’s how you can register:

1. Create an Account on the FTA Portal: Visit the official FTA website and create an account by providing your business information.
2. Submit Documents: Upload the required documents, including your trade license and financial statements, to the portal.
3. Complete the Registration Form: Fill out the online registration form with details such as your business activities, revenue, and ownership structure.
4. Review and Submit: Once you’ve completed the form, review the information carefully and submit your application.

Step 3: Receive Your Tax Registration Number (TRN)

Once your registration is approved, you will receive a Tax Registration Number (TRN). This number is essential for filing tax returns, paying corporate tax, and complying with tax regulations.

Step 4: Understand Your Ongoing Tax Obligations

After registration, businesses must file annual tax returns with the FTA, along with other necessary filings. You’ll need to:

• File Tax Returns: Submit your tax return by the due date every year.
• Maintain Financial Records: Keep accurate financial records to support your tax filings.
• Pay Corporate Tax: Ensure timely payment of corporate tax based on your taxable profits.

Step 5: Keep Up with Tax Changes

The UAE’s corporate tax regulations are new, and there may be updates or changes over time. Stay informed by regularly checking the FTA website or consulting with a tax advisor to ensure your business remains compliant with any new regulations.

Conclusion

Registering for corporate tax in the UAE can seem like a complex process, but with the right preparation and understanding, it can be done smoothly. Make sure to follow the steps above and consult with a certified tax agent if needed. The FTA is dedicated to supporting businesses and ensuring tax compliance in the UAE.

For more information and personalized assistance with the registration process, contact FTH – Finance and Tax House for professional consultation.

Call to Action:

• Contact us today for a consultation on your corporate tax registration.
• Schedule a free consultation to learn more about corporate tax and other tax-related services in the UAE.