The landscape of corporate taxation in the United Arab Emirates (UAE) has seen recent updates, particularly regarding the registration process and timelines set forth by the Federal Tax Authority (FTA).
Here’s a breakdown of the latest developments and what they mean for businesses operating in the UAE:
Registration Requirements:
Under the UAE Corporate Tax Law, all Taxable Persons and certain categories of Exempt Persons must register for Corporate Tax (CT) with the FTA to obtain a Tax Registration Number (TRN). Exempt Persons include entities like Qualifying Public Benefit entities and Qualifying Investment Funds.
Timeline Clarifications:
The FTA, through Decision No. 3 of 2024, has specified the timelines for UAE Corporate Tax registration applications for all Taxable Persons. Additionally, Decision No. 7 of 2023 outlines the timelines for applying for exemption for specific categories of Exempt Persons.
| Category of Taxable Person | Taxable Person into existence as of 1 March 2024 | Taxable Person comes into existence after 1 March 2024 |
| Residents |
| Juridical Person | Date of license issuance | Timeline | |
| 1 Jan – 29 Feb | 31 May 2024 | ||
| 1 Mar – 30 Apr | 30 Jun 2024 | ||
| 1 May – 31 May | 31 July 2024 | ||
| 1 Jun – 30 Jun | 31 Aug 2024 | ||
| 1 July – 31 July | 30 Sep 2024 | ||
| 1 Aug – 30 Sep | 31 Oct 2024 | ||
| 1 Oct – 30 Nov | 30 Nov 2024 | ||
| 1 Dec – 31 Dec | 31 Dec 2024 | ||
| Does not have a License as on 1 March 2024 | 31 May 2024 |
| Natural Person | 31 March 2025 in case subject to tax for calendar year 2024. In other cases, 31 March following the respective Gregorian calendar year |
| Non Residents |
| Permanent Establishment (PE) | 9 months from the date of existence of the PE | 6 months from the date of existence of the PE |
| Nexus in the UAE | 31 May 2024 | 3 months from the date of establishment of the nexus |
| Natural Person | 3 months from the date of meeting the requirements of being subject to tax in UAE. | |
Key Points to Note:
- Resident Persons: The registration timeline is determined by the date of License issuance, regardless of the year of issuance. In cases where a Resident Juridical Person holds multiple licenses, the one with the earliest issuance date is considered.
- Non-Resident Persons: Non-residents earning only State Sourced Income without a Permanent Establishment (PE) or nexus in the UAE are exempt from CT registration. However, a nexus is established if income is derived from UAE immovable property.
- Natural Persons: Individuals conducting business activities must register for CT if their total turnover exceeds AED 1 million in a Gregorian calendar year.
Administrative Penalty:
Failure to submit a CT registration application within the specified timelines incurs an administrative penalty of AED 10,000.
Guidance and Next Steps:
- The deadline for submission of the registration application is crucial, and taxpayers must ensure compliance to avoid penalties.
- Valid licenses must be uploaded and accepted on the EmaraTax portal before initiating the registration application.
- Businesses should determine their due date for CT registration and adhere to it to prevent non-compliance.
EmaraTax Portal:
The EmaraTax portal for UAE Corporate Tax registration is now accessible to all eligible entities, streamlining the registration process.
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
Conclusion:
Understanding the recent updates to the UAE Corporate Tax registration process is vital for businesses to remain compliant with the law. By adhering to the specified timelines and requirements, companies can navigate the registration process effectively and avoid penalties.
At Elevate Accounting & Auditing, we recognize the significance of complying with corporate tax regulations in the UAE. Our seasoned team is proficient in the requisites and procedures associated with corporate tax registration. Act promptly to register for UAE Corporate Tax and reach out to Elevate Accounting & Auditing for additional support.