As the UAE braces up for a new era of corporate taxation in 2024, businesses operating in the country should equip themselves with the necessary procedures and knowledge to comply with the upcoming corporate income tax regulations. Successful enterprises and organizations seek corporate tax advisory in Dubai from established partners for adherence to the new policies. Let’s take a look at new corporate tax compliance requirements in the UAE in 2024 in this edition.
- Register for Corporate Tax
- Necessary Documents for Corporate Tax Registration
- Maintaining proper accounting records
- File a Corporate Tax Submission
- Corporate Tax Rates Businesses Must Know
- Corporate Tax for Free Zone Companies
- Relief for Small Businesses
- Calculating Taxable Profit
- Differentiating VAT and Corporate Tax
- What are the administrative penalties?
Register for Corporate Tax
In the UAE, the implementation of corporate tax is set to commence from the first financial year starting on or after 1st June 2023. All companies, including the ones operating in free zones, should register for corporate income tax, regardless of their existing VAT registrations.
The Emara Tax portal on the Federal Tax Authority’s (FTA) website facilitates this process, offering a seamless registration experience. The registration process is simple, and it won’t take more than 30 minutes to complete the process. A comprehensive video guide is available on the website for FTA to assist businesses. Even companies that have already registered for VAT and Excise Tax can complete their corporate tax registration through the portal.
Businesses that aren’t currently registered for Excise Tax or VAT first need to create a new user profile on Emara Tax. Next, they need to choose corporate tax registration and complete the application process. For your application to be successful, it’s imperative to furnish accurate information and update the supporting documents.
Necessary Documents for Corporate Tax Registration
The necessary documents to complete corporate tax registration of Legal Persons include:
- An Emirates ID of the authorized signatory
- Proof of authorization (POA/MOA) for the signatory
- Trade license or business license
- Passport
The FTA requires businesses to provide accurate percentages of shareholding that correspond to the actual holdings of the owners and align the date or incorporation with the commencement date of the company as per the MOA. Entities must also provide the tax period. Businesses willing to form a Corporate Tax Group have to register individually. They have to obtain a Tax Registration Number and apply to establish a Corporate Tax Group at a later date, according to FTA’s guidelines.
Maintaining proper accounting records
The corporate tax law in the UAE makes it mandatory for businesses to maintain specific accounting records. Companies must seek assistance from professional teams for compliant bookkeeping and accounting. Reputed tax consultants in Dubai can provide you with the necessary assistance and advice in this regard.
File a Corporate Tax Submission
Avoid a AED 10,000 fine by Meeting UAE's Corporate Tax Deadlines. Contact us for Expert Tax Compliance Guidance and Protect your Business.
Corporate Tax Rates Businesses Must Know
The corporate tax rates in the UAE are based on annual net profits.
- Tier 1: For companies with annual net profits up to AED 375,000, no tax has to be paid
- Tier 2: For companies with profits of more than AED 375,000, a 9% tax rate has to be paid
- Tier 3: Large MNCs need to pay tax at a different rate as per OECD Pillar Two guidelines
Corporate Tax for Free Zone Companies
Relief for Small Businesses
Calculating Taxable Profit
Differentiating VAT and Corporate Tax
What are the administrative penalties?
Businesses in the UAE failing to adhere to corporate tax regulations may face administrative penalties ranging from AED 500 to AED 20,000 from 1st August 2023.
The FTA has launched an extensive awareness campaign to help the business community understanding the implications of corporate income tax. This educational initiative includes several workshops, sessions, and webinars to provide in-depth insights into the Corporate Tax Law. This will help foster a culture of self-compliance among businesses. Both taxpayers and the broader business community will benefit from this programme.
Notably, virtual workshops conducted in Arabic and English on ‘Corporate Tax Registration’ cover critical aspects, including the creation of a new user profile on the Emara Tax portal, necessary documentation, application procedures, and obtaining a UAE Corporate Tax Registration Number.
As a leading company providing corporate tax advisory in Dubai, the IMC Group continues to assist businesses comply with tax norms. With professional guidance, businesses can make conscious decisions to ensure tax compliance.
