How to Register for Corporate Tax in the UAE: A Step-by-Step Guide

In June 2023, the United Arab Emirates (UAE) introduced a federal corporate tax system, signaling a significant shift for businesses across the nation. For years, the UAE’s tax-free environment has attracted businesses, but the introduction of corporate tax marks a new chapter in the country’s financial regulations. This new tax system is part of the UAE’s plan to diversify its revenue streams and align with international tax standards.

For businesses operating in the UAE, registering for corporate tax is mandatory and must be completed in a timely manner to avoid penalties. Whether you’re a large corporation or a small business, this guide will walk you through the step-by-step process of registering for corporate tax in the UAE, ensuring compliance with the law and avoiding costly fines.

1. Who Needs to Register for Corporate Tax?

Understanding who is required to register for corporate tax is essential before diving into the registration process.

• Mandatory Registration: Any business that generates taxable income above AED 375,000 annually must register for corporate tax. The taxable income is calculated based on the company’s net income or profit, adjusted for certain deductions and add-backs.
• Voluntary Registration: Businesses earning below this threshold can opt for voluntary registration. Though not obligatory, this can be beneficial for businesses seeking to claim foreign tax credits or operate in multiple jurisdictions.
• Free Zone vs. Mainland Businesses: Businesses operating in free zones may qualify for a 0% corporate tax rate under the UAE’s Qualifying Free Zone Person (QFZP) rules, provided they meet the specific criteria.

2. Key Documents Required for Registration

The UAE Federal Tax Authority (FTA) requires a specific set of documents to process corporate tax registrations, depending on the nature of the applicant.

• For Natural Persons (individuals):some text
  • Trade license (if applicable).
  • Emirates ID / Passport of the applicant.
• For Legal Persons (corporations or legal entities):some text
  • Trade license.
  • Emirates ID / Passport of the authorized signatory.
  • Proof of authorization for the authorized signatory (e.g., Power of Attorney).

The accepted file formats for submission are PDF and Word, with a maximum file size of 5 MB per document.

3. Step-by-Step Guide to Registering for Corporate Tax

Here’s a detailed step-by-step guide to help you navigate the registration process via the EmaraTax portal:

1. Log into EmaraTax:
   • Begin by logging into your EmaraTax account using your credentials or through the UAE Pass. If you’re new to EmaraTax, click the ‘sign up’ button to create an account.
2. Add Taxable Persons:
   • Once logged in, you’ll see a dashboard displaying the Taxable Persons linked to your profile. If none are linked, you’ll need to add a Taxable Person before proceeding with corporate tax registration.
3. Select Corporate Tax Registration:
   • In the dashboard, navigate to the Corporate Tax section and select ‘Register’ to start the process.
4. Review Registration Guidelines:
   • A page containing the registration guidelines will appear. It is important to read through the guidelines carefully. Once reviewed, accept the guidelines by checking the box and click ‘Start’ to begin your application.
5. Fill in Entity Details:
   • Choose your business’s entity type (Natural Person or Legal Person) from the dropdown menu. The form will automatically adjust the fields based on your selection. Enter the relevant entity details such as the legal structure, trade license, and registration number.
6. Enter Identification Details:
   • In the next section, provide the identification details of your business. This includes your trade name, license number, and legal name (in both English and Arabic).
7. Add Business Activities:
   • Click the ‘Add Business Activities’ button to enter details about the specific business activities related to your trade license. Be sure to provide accurate information as required.
8. Add Owners (if applicable):
   • For businesses where individuals or entities own 25% or more, click ‘Add Owners’ and input their details, including ownership percentage and personal identification documents.
9. Input Branch Information (if applicable):
   • If your business operates through multiple branches, select ‘Yes’ when prompted and enter details for each branch, including trade license numbers and associated business activities.
10. Provide Contact Details:

• Enter the full address of your registered business, including the building name, street number, city, and preferred contact details (mobile, landline, and email).

11. Add Authorized Signatory:

• If your business has an authorized signatory, click ‘Add Authorized Signatory’ and provide the necessary details, including Emirates ID or passport copies, and proof of authorization.

12. Review and Declaration:

• After completing the previous steps, proceed to the ‘Review and Declaration’ section. Thoroughly review all the information entered and ensure its accuracy. Mark the declaration checkbox to confirm that the information is correct.

13. Submit Application:

• Once you are confident that all the information is accurate, click ‘Submit’ to send your corporate tax registration application through the EmaraTax portal.

4. What Happens After Registration?

After submitting your application, the FTA will process your request. The processing time typically takes around 20 business days, but it may take longer if additional information is required.

Once your registration is approved, you will receive a Tax Registration Number (TRN), which will be used for all corporate tax-related transactions, such as filing tax returns and issuing invoices.

5. Ongoing Corporate Tax Obligations

After receiving your TRN, businesses must fulfill their ongoing corporate tax obligations. This includes:

• Filing Tax Returns: All registered businesses are required to file corporate tax returns within nine months after the end of the tax period.
• Maintaining Proper Financial Records: Businesses must maintain accurate financial records and submit these as part of their tax filing.
• Deregistration (if applicable): If a business ceases operations, it must submit a final tax return and deregister from the corporate tax system.

6. Common Mistakes to Avoid

Here are some common mistakes businesses should avoid during the corporate tax registration process:

• Delaying Registration: Late registration can result in hefty fines (up to AED 10,000).
• Incorrect or Incomplete Information: Ensure all details entered during registration are accurate to avoid delays or rejections.
• Not Keeping Proper Records: Businesses are required to maintain proper financial records for tax filing, and failure to do so can lead to fines and audits.

7. Deregistration Process

If your business ceases operations, you must deregister from the corporate tax system. The steps include:

• Filing the final tax return and paying any outstanding tax liabilities.
• Submitting a deregistration application through the EmaraTax portal.
• Ensuring compliance with all tax obligations before deregistration to avoid penalties.

8. FAQs About Corporate Tax in the UAE

• When is the deadline to register for corporate tax? The registration deadline depends on your business's financial year. You must register within nine months of the end of the applicable tax period.
• What if I fail to register on time? Failing to register for corporate tax can result in penalties of up to AED 10,000, in addition to fines for non-compliance with tax filing and payment.
• Are there tax benefits for Free Zone entities? Yes, Free Zone entities may qualify for a 0% corporate tax rate if they meet the criteria set by the FTA under the Qualifying Free Zone Person (QFZP) rules.

9. Conclusion

Registering for corporate tax in the UAE is a mandatory requirement for all businesses earning above the taxable income threshold. By following the steps outlined in this guide, businesses can ensure timely compliance and avoid costly penalties. Professional tax advisors can help simplify the process and provide guidance on ongoing compliance.

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