Corporate Tax Registration in UAE: How to Guide 2024

The United Arab Emirates (UAE) has introduced federal corporate tax as part of its economic diversification strategy and to align with global tax standards. This new economic change affects businesses operating in Dubai and across the UAE. 

All companies must understand the registration process, requirements, and implications to ensure compliance with new tax regulations. Businesses must come up with new tax strategies and optimise their operations to stay on top of their game.

In this blog, we will cover the following points:

• Understanding your corporate tax obligations and registering on time
• Familiarising yourself with allowable corporate tax deductions and incentives
• Implementing accounting and record-keeping systems
• Considering seeking professional tax advice to ensure compliance and optimise your tax position

Overview of Corporate Tax in the UAE

The UAE Ministry of Finance has introduced corporate tax, effective June 1, 2023, or January 1, 2024, based on a business’s fiscal year. Key features include:

• Tiered tax rates: 0% on taxable income up to AED 375,000, 9% above that.
• Broad application: Applies to all UAE businesses, except natural resource extraction, taxed at the emirate level
• Loss utilisation: Allows current tax losses to offset future income
• Free zone incentives: Tax incentives for compliant UAE Free Zone companies
• International alignment: Designed to meet OECD standards and enhance global business appeal

Corporate Tax Registration Step-by-Step Process

The corporate tax registration process in the UAE involves several steps. The initial steps are conducted through the EmaraTax platform.

Now let’s understand each step in proper order.

Step 1: Prepare Required Documents

As the first step, it’s crucial to gather all necessary documents. Having all the required documents will ensure a smooth and efficient registration experience. Required documents include:

• Passport copies of shareholders and key decision-makers
• Trade name reservation certificate
• Detailed business plan highlighting services, planning, and strategy
• Memorandum of Association (MOA)
• Office lease agreement 
• Visa copies (if applicable)
• No Objection Certificate (NOC) from sponsors (if required)
• Bank reference letter

Ensure all documents are up-to-date and accurately reflect the current state of the business.

Step 2: Access the Emara Tax Platform

The EmaraTax platform is the portal for all tax-related activities in the UAE. To begin the registration process:

1. Visit the official EmaraTax website.
2. Log in using your Federal Tax Authority (FTA) credentials.
3. “Sign Up” for a new account if you do not have one already.

Businesses already registered for VAT or Excise Tax can use their existing credentials to access the platform. 

Step 3: Complete the Registration Application

Once logged in, follow these steps to complete the registration application:

1. On the dashboard, locate and click the “Register” button under the Corporate Tax tile.
2. Tick the checkbox to confirm you’ve read and understood the instructions and guidelines.
3. Click “Start” to begin the registration process.

The registration process consists of multiple sections, each requiring certain details.

1. Entity Details

• Select the business entity type (e.g., LLC, PJSC, branch of foreign company).
• Provide basic information about your business structure.

2. Identification Details

• Enter trade licence details.
• Add business activities. 
• Provide ownership information for those holding 25% or more of the entity.

3. Contact Details

• Enter the business’s registered address. 
• Provide contact information for official communications.

4. Authorised Signatory

Add details of individuals authorised to act on behalf of the company for tax purposes.

Do note that incorrect or missing information can lead to delays in the registration process.

Step 4: Submit the Application and Pay the Fees

After completing all sections:

1. Review all entered information in the “Review and Declaration” section.
2. Tick the checkbox to declare that all provided information is accurate and complete.
3. Click “Submit” to finalise your application.
4. Pay applicable fees as instructed by the system.

Step 5: Await FTA Review and Approval

Once submitted, the FTA will review your application. FTA may send you requests for additional information or clarification if required. Once your application is approved, you will receive a notification in your registered email with your Tax Registration Number (TRN).

Factors to consider when planning for registration

Although the steps of UAE corporate tax registration are explained above, a few factors must be considered before proceeding with them.

1. Internal Preparation: Allow yourself sufficient time to gather all necessary documents and information and prepare everything in advance.
2. System Updates: Implement updated accounting and financial systems to meet new tax requirements.
3. Staff Training: Train relevant staff members on the new tax system and compliance requirements for business.
4. Professional Assistance: Consider engaging tax professionals to assist with the registration process and ensure all requirements are met.

Corporate Tax Registration Deadlines

The Federal Tax Authority has issued deadlines for corporate tax registration based on the licence issuance month. Here’s a summary of the deadlines:

• January or February: May 31, 2024
• March or April: June 30, 2024
• May: July 31, 2024
• June: August 31, 2024
• July: September 30, 2024
• August or September: October 31, 2024
• October or November: November 30, 2024
• December: December 31, 2024

Businesses need to plan ahead to ensure a smooth transition into the new corporate tax regime. Missing these deadlines may result in penalties for late registration. 

Post-Registration Compliance

After successfully registering for corporate tax, businesses must maintain compliance with ongoing requirements:

Tax Return Filing

After successfully registering for corporate tax, your primary obligation is to file your tax returns regularly. Key points to remember include:

1. Filing Deadline: Corporate tax returns must be filed within nine months of the end of the tax period.
2. Accuracy: Double-check the accuracy of all reported income, expenses, and tax liability.
3. Format: Returns must be filed electronically through the EmaraTax platform.
4. Supporting Documents: Keep all supporting documentation ready in advance if requested by the FTA.

Businesses should implement strong internal processes to ensure accurate and timely filing of tax returns. 

Record-Keeping Requirements

Maintaining accurate and audited financial records is crucial for corporate tax compliance. Key requirements include:

1. Accounting Standards: Financial records and statements must follow internationally accepted accounting standards.
2. Retention Period: Records must be preserved for a minimum period as specified by the FTA (usually five years at least).
3. Accessibility: Records must be easily accessible for potential FTA Tax audits or inquiries.
4. Comprehensiveness: Maintain records of all transactions, including income, expenses, assets, and liabilities.

Penalty for Non-Registration or Late Registration

To ensure businesses follow the new corporate tax regime, the FTA will impose a penalty on non-registration or late registration. Therefore, following the deadlines and preparing in advance is important to avoid unnecessary financial burdens.

FTA will impose a fine of AED 10,000 for failure to register for corporate tax by the specified deadline. This penalty became effective on March 1, 2024. 

To avoid any such penalties, you must prioritise registering before the deadline. You can also engage professional tax advisors to ensure timely registration.

Deductions and Allowances in Corporate Tax

In the UAE, businesses can benefit from various tax deductible expenses to optimise taxable income. Key deductible items include:

• Operational expenses
• Employee remuneration
• Depreciation on assets
• Interest on business loans
• Approved charitable contributions

You can consult a tax advisor to remain in compliance and maximise deductions.

Challenges in Corporate Tax Registration and Compliance

The FTA has aimed to make the federal corporate tax regime as straightforward as possible. However, most businesses may still face some challenges, such as:

• How certain tax regulations apply to specific business models
• How to implement new accounting and reporting systems to comply with evolving tax requirements
• How to manage cash flow to meet tax obligations
• How to handle transfer pricing requirements in case of multinational enterprises

To tackle these challenges, businesses should:

• Invest in providing tax education and training to relevant teams and staff
• Implement specialised tax management software
• Seek professional advice from qualified tax consultants, such as Avyanco
• Structure your company for tax optimizations 
• Plan ahead for tax payments to avoid cash flow issues

Role of Expert Tax Consultants

Given the complexity of tax regulations, it is recommended to engage tax consultants. Non-compliance can result in heavy fines, so professional advice is necessary to avoid unnecessary financial burdens. Tax professionals can provide valuable services, including:

• Assistance with corporate tax registration
• Guidance on tax planning and structuring
• Preparation and filing of tax returns
• Representation in case of tax audits or disputes with the FTA
• Ongoing advice on tax compliance and optimization

When choosing a tax agent or consultant, look for professionals who are registered with the FTA and have experience in UAE tax matters. You can consider Avyanco, leading accounting and auditing firms in Dubai, UAE with a team of expert accountants and tax professionals. 

Corporate Tax Registration with Avyanco

Avyanco can assist you with corporate tax registration in Dubai. Our expert accounting and bookkeeping experts can also help you remain compliant with the ever-changing corporate tax regime. 

Corporate tax registration is a mandatory requirement for Dubai companies. Failure to comply may have severe consequences. Therefore, engaging expert tax consultants offering corporate tax services in Dubai, UAE will ensure accurate and timely tax reporting and filing. 

Connect with our corporate tax advisors today to manage all your corporate tax requirements while you focus on revenue generation and scaling your business.