In a nation where taxation was once a rarity, the UAE is ushering in a new era of corporate taxation. Following the introduction of VAT in 2018, the UAE has steadily expanded its tax framework, culminating in the launch of corporate tax on 1 June 2023. This change is particularly significant for businesses licensed in June, as they now face an important registration deadline.
Understanding Corporate Tax in the UAE
The new corporate tax, set at 9%, is applicable to companies with an annual turnover of AED 1 million or more. This tax primarily affects private sector companies and public limited companies, excluding government entities and Freezone businesses. However, Freezone businesses are expected to be required to register soon. For businesses with annual revenues below AED 1 million, the tax does not apply, offering relief to startups and smaller enterprises.
The UAE’s Corporate Tax regime also provides financial and administrative relief to smaller businesses, exempting them from tax and simplifying the filing requirements for those with a turnover of up to AED 3 million.
Taxable entities must register and pay their dues through EmaraTax, the digital platform designed to facilitate corporate tax processes in the UAE. This platform is essential for all taxable businesses to ensure compliance with the new tax regulations.
Key Deadline: 31 August 2024
The UAE Federal Tax Authority (FTA) has set a critical deadline for businesses licensed in June. These companies must submit their Corporate Tax registration applications by 31 August 2024. This deadline is in accordance with the Federal Tax Authority Decision No. 3 of 2024, which took effect on 1 March 2024, under the Federal Decree-Law No. 47 of 2022.
The FTA’s directive specifies that all Resident Juridical Persons established before 1 March 2024 must register based on the month their licenses were initially issued. Even if a license expires on 1 March 2024, the original issuance month determines the registration deadline.
How to Register
Registration is completed through the EmaraTax digital platform, which is available 24/7. This platform allows unregistered businesses to create user profiles and obtain tax registration numbers, streamlining the entire registration process.
To complete registration, businesses must provide the following documents:
- Commercial license
- Emirates ID card
- Passport of the authorized signatory
- Proof of authorization
The Importance of Compliance
Adhering to the FTA’s deadlines and requirements is crucial to avoid administrative penalties. The FTA has consistently reminded 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 seeking more information 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.
