In a country where the word “tax” has historically been rare, UAE residents are now navigating a new era of corporate taxation. Since the introduction of VAT in 2018, the UAE has gradually expanded its tax landscape, and as of June 1, 2023, a corporate tax was introduced. This marks a significant shift, especially for businesses licensed in June, which now face a critical registration deadline.
Understanding Corporate Tax in the UAE
The corporate tax, set at 9%, applies to companies generating a turnover of AED 1 million or more annually. This tax is primarily targeted at private sector companies and public limited companies, excluding government entities and Freezone businesses, though registration for Freezone businesses is anticipated soon. For businesses with a turnover below AED 1 million, this tax does not apply, offering support to startups and small enterprises.
Additionally, the UAE’s Corporate Tax regime provides financial and administrative relief to these smaller businesses, exempting them from tax and simplifying the filing requirements for those with turnover up to AED 3 million.
Taxable entities are required to register and pay through EmaraTax, a digital platform facilitating UAE corporate tax processes. This platform is essential for all taxable persons, ensuring compliance with the new tax regulations.
Key Deadline: August 31, 2024
The UAE Federal Tax Authority (FTA) has set a crucial deadline for businesses licensed in June. These businesses must submit their Corporate Tax registration applications by August 31, 2024. This deadline follows the Federal Tax Authority Decision No. 3 of 2024, implemented on March 1, 2024, under the Federal Decree-Law No. 47 of 2022.
The FTA’s directive specifies that all Resident Juridical Persons established before March 1, 2024, must register based on the month their licenses were originally issued. Even if a license expires on March 1, 2024, the original issuance month determines the registration deadline.
How to Register
Registration is conducted through the ‘EmaraTax’ digital platform, available 24/7. This platform allows unregistered businesses to create user profiles and obtain tax registration numbers, simplifying the entire registration process.
To complete registration, businesses need to upload the following documents:
- Commercial license
- Emirates ID card
- Passport of the authorized signatory
- Proof of authorization
The Importance of Compliance
Compliance with the FTA’s deadlines and requirements is vital to avoid administrative penalties. The FTA has been diligent in reminding businesses of these deadlines to ensure timely compliance. Failure to register within the stipulated timeframe can result in fines and other penalties, making prompt action essential.
If you’re looking to understand more about the UAE’s corporate tax or need assistance in establishing your business in Dubai, now is the time to act. For those in need of commercial real estate, explore our live listings and secure your business’s future in one of the world’s most dynamic markets.