What is Corporate Tax in UAE?
The Basics
Corporate tax is a business profits tax introduced by Federal Decree-Law No. 47 of 2022 and enforced by the Federal Tax Authority (FTA).
Corporate tax is applicable to
- Taxable profits of both resident and non-resident entities, operating businesses, or having a permanent establishment in the UAE.
- The tax rate is 9 % on taxable earnings (exceeding AED 375,000);
- Earnings below AED 375,000 are exempt from taxes.
To comply with the UAE tax laws, the first step is to register and obtain a Tax Registration Number (TRN).
Understanding the process of corporate tax registration in the UAE
Registration of corporate tax in the UAE is a formal procedure to comply with the governing rules. The process includes informing the FTA about your business and receiving a valid Tax Registration Number.
Registration of every individual and organization is essential in case they fall within the scope of the law. Efforts to register after the deadline would result in administrative fines. The most prominent being a fine of AED 10,000 due to late registration.
When an entity has a taxable income of zero, as is the case with a free zone company that deserves a 0% regime as a Qualifying Free Zone Person, registration is nonetheless mandatory unless a particular exemption is given by the FTA.
Who needs to register for UAE Corporate Tax?
- All commercial entities, regardless of jurisdiction, are subject to corporate tax.
- It applies to mainland businesses, free zone entities, branches, foreign entities with a permanent establishment
- Qualifying natural persons—such as self-employed individuals or sole proprietors—whose business income exceeds the registration threshold of AED 1 million.
- Special categories, for example, a Qualifying Free Zone Person, must also register with the FTA.
Registration establishes an official tax profile of the legal entity or natural person, permitting his or her interaction with the EmaraTax portal to file returns, pay, and answer to FTA inquiries.
Step by Step process for UAE Corporate Tax Registration
- Mainland companies: All companies with a trade licence in the UAE, which operate on the mainland, are to be registered.
- Free zone companies: All free zone organizations are required to be registered, regardless of whether they are supposed to pay tax. The Qualifying Free Zone Person provisions stipulate the rate of tax payable, but does not give an exemption on registration.
- Branches of UAE companies: Though in some cases, the branches are considered part of the parent company, the registration regulations must be verified. As a matter of fact, a number of branches must be registered or included under the parent company tax profile.
- Foreign entities and non-residents: Entities and persons located outside the UAE but conducting business in the UAE on an ongoing and regular basis, or having a permanent establishment (PE) in the UAE, are required to register.
- Natural persons: Self-employed, freelancers, and sole proprietors whose annual business income is more than AED 1,000,000 are to be registered. The ones below the threshold can also gain administrative benefits as volunteers, even though not compulsory.
- Public benefit entities and non-profits: Public benefit entities and some non-profit organisations are required to be registered, provided they satisfy the requirements laid out by the FTA.
UAE Corporate Tax Registration via Emara Tax : Managed by Richman Associate - The Process Involved
Paperwork needed during registration
The documentary requirements to be provided by natural persons and legal entities are different. The FTA requires explicit evidence of identity, legal right of acting, and information regarding business activities. Typical documents include:
Concerning the persons (natural persons):
- Valid trade licence, in case the person is trading under a licence.
- Passport copy or Emirates ID.
- Bank contact, address and Contact information.
In the case of companies (legal entities):
- Valid trade licence.
- Incorporation documents in the form of MOA/AOA
- Emirates ID or passport of the signatory authorised.
- Evidence of authority (Power of Attorney or board resolution) in case the application is signed by persons other than a director.
- Name of beneficial owners/ shareholders where necessary (owners holding 25 percent plus of shares).
- Basic financial information, financial year-end, and start date.
Registering for corporate tax services through the EmaraTax portal can be complex if you are registering for the first time. To make the process easy, RichMan Associate assists clients by managing every step effectively on their behalf.
Start the UAE Corporate Tax Registration application.
- Log in to your EmaraTax account, and then use the Corporate Tax tab and select Register.
- Read and agree to the terms and directions, and move on.
EmaraTax account/log in.
- Open the EmaraTax portal and log in the already existing credentials or create an account.
- Add or connect the taxable individual.
Accurate entity information
- Enter the legal name (where applicable, to include Arabic), the trade licence number, the commercial registration, the contact details, and the start and end of the financial year.
- Select the right business activity as you have stated in your trade licence.
- In case you do not have any business associated with your profile, you can add your entity as a Taxable Person and enter the most basic information, such as the trade licence number and legal form.
Arrange proprietorship and beneficial owners.
- Disclose information of the shareholders or partners who own 25% and above of the stock, identity documents, and ownership percentage.
- Give details of ultimate beneficial ownership where necessary.
Add information about a branch or a group (when necessary)
- In case the entity has branches, provide their information.
- In case of being a part of a group, give group-specific information to make the FTA appreciate intra-group relationships.
Enter signatory details into the system.
- Give the name, Emirates ID or passport, and evidence of authorisation of the individual who can sign returns and bind the entity.
Upload documents
- Provide the necessary supporting documents in the right format and within the permitted file sizes.
- The usual files required are a trade licence, a signatory passport/Emirates ID, constitutional documents, and evidence of authorisation.
Submit the application
- Upon review and approval of the application, the FTA will provide a Tax Registration Number (TRN).
Reviewing the timeline and FTA.
- The processing time is 20 business days
- For complicated cases or other documentation can cause a delay or prolong the time.
- After approval, the FTA will send you a Tax Registration Number (TRN), and this will confirm that you are registered under the UAE Corporate Tax.
Corporate Tax Registration with RichMan Associate
As a professional consultant, RichMan Associate is committed to assist you in every step of corporate tax registration.
- We save time and minimize the possible mistakes in the UAE Corporate Tax Registration.
- RichMan Associate is an authorized Accounting Firm in Dubai.
- It has skilled tax advisors who help clients throughout the registration, filing, and compliance process.
Services provided by RichMan Associate
Confirm Your Legal Entity:
- Calculate whether your entity has to be registered.
- Recognise what legal entity need to be registered.
- Check whether you are a Qualifying Free Zone Person or another special category.
Prepare Checklist and documentation
- We prepare and verify all necessary documents to be accepted by FTA and correctly formatted to be used in EmaraTax.
- We monitor the Emara dashboard for any additional information or clarification.
EmaraTax submission
- We prepare, or update your EmaraTax account, fill in the registration application, and send in documents.
- RichMan Associates will assist in organizing the connection of the entity with the correct version and minimize the chances of rejections.
Communication with the FTA:
- Keep a track of the process of application,
- We answer FTA inquiries regarding the procedure, and follow the process until a Tax Registration Number (TRN) issued.
Continuous compliance:
- RichMan Associate maintains complete compliance when planning Corporate Tax Filing in the UAE.
- We prepare corporate tax files, which involve the preparation of returns, calculation of the tax payable.
- We do the record keeping on behalf of clients and everything is completed within the stipulated deadlines.
FAQ's
Q: Who should be registered as a corporate tax in the UAE?
A: Mainland companies, free zones, branches that have a PE, foreign entities that have business operations in the UAE, which are sourced in the country, and natural persons with a business income of more than AED 1,000,000 are obliged to register.
Q: What is a Tax Registration Number (TRN)?
A: The TRN is a special number that is given by the Federal Tax Authority when your corporate tax registration is approved. It verifies that your entity is registered in the corporate tax position and is obligated to file and conduct official correspondence.
Q: Do free zone firms have to be registered?
A: Yes. Even in cases where the free zone entity is expected to benefit under the Qualifying Free Zone Person rules, where the rate is 0%, the entity needs to complete UAE Corporate Tax Registration.
Q: What is the duration of registration?
A: Preliminary processing normally requires 20 business days, although the FTA can seek further documents and that can take up to 60 days (or longer) in special cases.
Q: What are the deadlines for filing after registration?
A: The corporate tax returns must be filed within a period of 9 months after the financial year is over. The payment requirements are observed, according to the return submission rules.
Q: What will happen if I do the registration late?
A: The administrative penalty applicable to late registration is AED 10,000, and additional penalties may be imposed on late filing, wrong returns, or inaccurate records.
Q: Does an accounting firm in Dubai come to my rescue?
A: Yes. Professional business consultancy service providers, like RichMan Associate, offer end-to-end services including registration, EmaraTax and corporate tax filing, record-keeping, and deregistration to enable compliance and minimize mistakes and penalties.
