Corporate tax (CT) is a direct tax imposed on the net income or profit of corporations and other entities engaged in business activities. In the UAE, the Federal Decree-Law No. 47 of 2022 on taxation of corporations and businesses, also known as the Corporate Tax Law, mandates that businesses will be subject to corporate tax starting from their first financial year commencing on or after June 1, 2023. The introduction of corporate tax in the UAE serves several objectives, including solidifying its position as a global business and investment hub, expediting its development and transformation, and adhering to international tax transparency standards while combating harmful tax practices.
Objectives of Corporate Tax in UAE
By introducing Corporate Tax, the UAE aims to:-
- Establish the UAE as a prominent global hub for business and investment.
- Expedite the country’s development and transformation to accomplish strategic goals.
- Reinforce the UAE’s dedication to meeting international tax transparency standards and preventing harmful tax practices.
Taxable Income Slab
|Corporate Tax Rate|
|Taxable income up to AED 3,75,000||
|Taxable income above AED 3,75,000||
|Large Multinationals [with consolidated global revenue > AED 3.15Billion (Euro 750mn)]||
Different tax rates (with reference to pillar 2 BEPS 2.0)
Documents Required for Corporate Tax Registration in UAE
To register for corporate tax in the UAE, you will need the following documents:
- Copy of Trade License
- Passport copy and Emirates ID of the owner and authorized signatory
- Memorandum of Association (MOA)
- Power of Attorney (POA) in case of an authorized signatory
- Concerned person’s contact details (mobile number and email)
- Contact details of the company (complete address and P.O. Box)
- Corporate tax period
These documents are necessary to complete the registration process and ensure compliance with tax regulations in the UAE. Make sure to have these documents ready when applying for corporate tax registration.
Exception from Registration for UAE Corporate Tax
The following Persons shall not register for Corporate Tax with the Authority:
- A Government Entity.
- A Government Controlled Entity.
- A Person engaged in an Extractive Business that meets the conditions of Article 7 of the Corporate Tax Law.
- A Person engaged in a Non-Extractive Natural Resource Business, that meets the conditions of Article 8 of the Corporate Tax Law.
- A Non-Resident Person that derives only State Sourced Income under Article 13 of the Corporate Tax Law and that does not have a Permanent Establishment in the State according to the provisions of the Corporate Tax Law.
Make sure you have all the right documents in order with our guide to Corporate Tax Registration in UAE
For businesses seeking to register for corporate tax in the UAE, it is crucial to have the required documents in order to ensure a smooth registration process. At Elevate, we understand the importance of complying with corporate tax regulations in the UAE. Our experienced team is well-versed in the requirements and processes involved in corporate tax registration. We can assist you in gathering the necessary documents and navigating the registration process, ensuring that your business remains in compliance with the UAE tax laws.
Trust Elevate Auditing to provide you with expert guidance and support as you embark on your corporate tax journey in the UAE.