As a UAE resident, hearing the word ‘tax’ might be uncommon and most of us don’t even think about it.
At least till 2023, but like most countries globally, the UAE has recently announced the introduction of UAE tax, starting with VAT back in 2018, there’s now corporate tax in the UAE.
The Federal Tax Authority has announced a new corporate tax deadline, and structure for those June-licensed businesses who are new to the UAE and to the concept of corporate tax.
Let us break everything down for you…
Refreshing: Corporate tax in the UAE
Effective June 1st, 2023 - The UAE announced a corporate tax of 9% which is applicable to companies that generate a turnover of AED 1 million yearly, which was announced on May 17th, 2023.
This tax applies only to private sector companies, public limited companies and businesses but is exempt to government companies and is currently not applicable to Freezone businesses either, but registration for Freezone will be made soon.
Businesses that generate a turnover below AED 1 million will be exempted from corporate tax as this is to support start-ups and small businesses.
In addition, the Corporate Tax regime provides financial and administrative relief to support start-ups and small businesses. Businesses qualifying for such relief will not pay any tax and avail of simplified filing requirements where their turnover is up to AED 3 million.
EmaraTax is a digital tax services platform that Taxable Persons need to be paying for UAE corporate tax purposes. All those working in public joint stock companies and private sector companies are liable to UAE tax and are to be paying corporate tax.
The new deadline - How it works
The UAE Federal Tax Authority has set an important deadline for businesses licensed in June to submit their Corporate Tax registration applications by August 31, 2024. This deadline follows the Federal Tax Authority Decision No. 3 of 2024, which was implemented on March 1, 2024, as part of the Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses.
Who needs to register?
The FTA's directive is clear: all Resident Juridical Persons (companies) established before March 1, 2024, must submit their tax registration applications based on the month their licences were issued. Even if a licence expires on March 1, 2024, the original issuance month dictates the registration deadline.
The month in which the business licence was originally issued determines the exact submission date.
How can you register?
Businesses must register through the ‘EmaraTax’ digital platform, which operates 24/7. This platform allows unregistered persons to create user profiles and obtain tax registration numbers, streamlining the registration process.
The documents required for registration include:
- The commercial licence
- Emirates ID card
- Passport of the authorised signatory
- Proof of authorisation
These documents must be uploaded to complete the registration.
Importance of compliance with corporate tax
Compliance with the FTA's deadlines and requirements is crucial to avoid administrative penalties.
The FTA has been proactive in reminding taxable persons about these deadlines to ensure timely compliance. And, if anyone fails to register within the stipulated time, it can result in fines and other penalties, so it is essential for businesses to act promptly.
Curious to know more about corporate tax?
For inquiries about corporate tax, contact AMS Support and Consultancy.
