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

In the UAE, all businesses and taxable persons are required to register for Corporate Tax, regardless of their annual taxable income. Registration is mandatory for:

• Mainland and Free Zone Businesses: Free Zone entities may qualify for a 0% tax rate if they meet the criteria for a Qualifying Free Zone Person (QFZP). However, Free Zone businesses generating mainland income are subject to corporate tax. All Mainland entities must register for Corporate Tax.

The corporate tax rate is 0% on taxable income up to AED 375,000 and 9% on income exceeding that threshold.

Key Documents Required for Corporate Tax Registration

The required documents for corporate tax registration in the UAE vary based on whether the applicant is a natural or legal person.

For Natural Persons (Individuals):

• Valid Trade License (if applicable): Must be current and valid at the time of registration.
• Emirates ID / Passport: A valid identification document of the applicant.

For Legal Persons (Corporations or Entities):

• Valid Trade License: Must be up-to-date.
• Emirates ID / Passport of the Authorized Signatory: Proof of identification for the authorized representative.
• Proof of Authorization: Documentation such as a Power of Attorney, if applicable.

The FTA accepts digital submissions of PDF or Word files, with a maximum file size of 5 MB per document.

Step-by-Step Guide to Registering for Corporate Tax

1. Log into EmaraTax:
   Access the EmaraTax portal using your login credentials or UAE Pass. If you are a new user, register for an account.
   ‍
2. Add Taxable Persons:
   If no Taxable Persons are linked to your profile, add a new Taxable Person to proceed.
   ‍
3. Select Corporate Tax Registration:
   In the Corporate Tax section, select 'Register' to begin your application.
   ‍
4. Review Registration Guidelines:
   Read through the registration guidelines provided, check the agreement box, and proceed.
   ‍
5. Provide Entity Details:
   Choose the appropriate entity type (Natural Person or Legal Person) from the dropdown menu. Enter details such as trade license number, legal structure, and registration number.
   ‍
6. Enter Identification Details:
   Include the trade name, license number, and legal name (in English and Arabic).
   ‍
7. Add Business Activities:
   Click 'Add Business Activities' and specify the activities conducted under the trade license.
   ‍
8. Add Owners (if applicable):
   For entities with owners holding a 25% or greater stake, provide ownership details.
   ‍
9. Provide Branch Information (if applicable):
   If your business operates through multiple branches, select 'Yes' and add branch details.
   ‍
10. Add Authorized Signatory:
    Provide Emirates ID or passport details of the authorized signatory and relevant proof of authorization.
    ‍
11. Review and Declaration:
    Carefully verify all information entered. Confirm compliance by checking the declaration box.
    ‍
12. Submit Application:
    Finalize and submit the registration.

What Happens After Registration?

Once submitted, the FTA reviews your application and issues a Tax Registration Number (TRN) upon approval. The process typically takes up to 20 business days. If additional information is needed, processing times may vary.

Ongoing Corporate Tax Obligations

After successful registration, businesses must adhere to ongoing compliance requirements:

• Filing Tax Returns: Businesses must file their corporate tax returns within nine months after the end of their tax period.
• Maintaining Accurate Financial Records: Businesses are required to keep detailed and accurate records for audit and tax filing purposes.
• Deregistration: If a business ceases operations, it must file a final tax return and submit a deregistration application.

Common Mistakes to Avoid During Registration

1. Delays in Registration: Failure to register in time can result in fines of up to AED 10,000.
2. Incomplete or Incorrect Information: Ensure all submitted details are accurate to prevent delays or rejections.
3. Neglecting Proper Record-Keeping: Inadequate records can lead to penalties or potential audits.

Deregistration Process

Businesses that close or cease operations must undergo a deregistration process. This includes:

1. Filing the Final Tax Return: Ensure all liabilities are settled.
2. Submitting a Deregistration Application: This is done through the EmaraTax portal.

FAQs About Corporate Tax in the UAE

What is the deadline for corporate tax registration?

• Registration deadlines depend on business incorporation dates and specific guidelines issued by the FTA.

What are the penalties for late registration?

• A penalty of up to AED 10,000 may apply for late registration.

Do Free Zone businesses qualify for tax exemptions?

• Free Zone businesses may qualify for a 0% tax rate if they meet FTA criteria as a Qualifying Free Zone Person.

When do natural persons need to register for corporate tax?

• Registration requirements for natural persons apply if their business income meets specified thresholds set by the FTA.

Does corporate tax apply to non-business income for individuals?

• No, non-business income such as salaries and investments is generally exempt from corporate tax.

Conclusion

Corporate tax registration is mandatory for all businesses operating in the UAE. By adhering to FTA guidelines and maintaining compliance, businesses can avoid penalties and operate smoothly within the UAE’s new tax regime. Consulting with professional tax advisors is highly recommended for businesses seeking tailored advice and support.

‍