Corporate Tax Consultant in UAE
Corporate Tax Registration in UAE
In the UAE, it is mandatory for individuals or entities liable for taxation, including those operating in free zones, to undergo Corporate Tax registration and acquire a unique Corporate Tax Registration Number.
- The Federal Tax Authority may stipulate that specific exempt individuals or entities register for Corporate Tax.
- Individuals or entities subject to taxation must submit a Corporate Tax return for each taxable period, with a deadline of nine months from the conclusion of that period.
- The payment deadline for any owed Corporate Tax for that period is generally nine months from the end of the corresponding period.
Applicability of UAE Corporate Tax
The scope of Corporate Tax (C.T.) in the UAE encompasses a wide range of entities and activities, including:
- Free zone businesses are also subject to Corporate Tax, but they may still benefit from existing Corporate Tax incentives if they comply with regulatory requirements and exclusively operate within the free zones. This means that free zone businesses conducting their operations solely within the free zones and not in the UAE mainland can still enjoy these incentives.
- All businesses and individuals operating with a commercial license within the UAE are subject to Corporate Tax This applies to companies and individuals engaged in commercial activities within the country.
- Foreign entities and individuals are liable for Corporate Tax if they engage in regular or ongoing trade or business activities within the UAE. This ensures that foreign entities conducting business operations in the country contribute to the tax system.
- Banking operations, including financial institutions involved in activities such as accepting deposits, providing loans, and offering other financial services, fall under the scope of Corporate Tax in the UAE.
Corporate Tax Rate in UAE
The UAE offers one of the most competitive Corporate Tax rates in the Middle East. Entrepreneurs can seek Corporate Tax advisory services in the UAE to understand the specific Corporate Tax rate applicable to their business model. Corporate Tax in the UAE is based on the annual taxable income of businesses and is structured as follows:
1. A Corporate Tax rate of 9% is applied to taxable income exceeding AED 375,000.
2. Taxable income below the threshold of AED 375,000 is not subject to Corporate Tax and enjoys a 0% rate.
Who is subject to corporate Tax in the UAE?
Corporate Tax in the UAE applies to several entities and individuals, known as “Taxable Persons.” The following are the categories of individuals and entities subject to Corporate Tax:
- Companies and Juridical Persons: This includes all companies and other legal entities that are incorporated or effectively managed and controlled within the UAE. They are required to fulfill their corporate tax obligations.
- Natural Persons (Individuals) Engaged in Business: Individuals who are involved in business or business activities within the UAE, as specified in an upcoming Cabinet Decision, are also subject to Corporate Tax.
- Non-Resident Juridical Persons with a Permanent Establishment: Foreign legal entities that have a Permanent Establishment in the UAE, as defined in Section 8 of the relevant legislation, are liable for Corporate Tax.
Additionally, Juridical Persons established in UAE Free Zones are considered Taxable Persons and must comply with the Corporate Tax Law. However, if a Free Zone Person meets the criteria to be classified as a Qualifying Free Zone Person, they may enjoy a 0% Corporate Tax rate on their Qualifying Income, as detailed in Section 14.
For individuals or entities without a Permanent Establishment in the UAE or those earning UAE-sourced income unrelated to their Permanent Establishment, Withholding Tax may be applicable. Withholding Tax is collected at the source by the payer on behalf of the income recipient and applies to cross-border payments of dividends, interest, royalties, and other forms of income. The rate for Withholding Tax is 0%
Who is Exempted from UAE Corporate Tax
Certain individuals and entities in the UAE are automatically or upon application exempted from Corporate Tax. The exemptions include the following:
- UAE Federal and Emirate Governments, their departments, authorities, and other public institutions.
- Wholly Government-owned companies engaged in activities mandated by a Cabinet Decision.
- Businesses involved in extracting UAE natural resources and related non-extractive activities are subject to Emirate-level taxation after meeting specific conditions.
- Public Benefit Entities as listed in a Cabinet Decision.
- Investment Funds that meet the prescribed criteria.
- Public or private pension or social security funds that satisfy certain conditions.
- UAE juridical persons wholly owned and controlled by the aforementioned exempt entities provided they fulfil specific conditions.
Relevant Documents required for Corporate Tax Registration in UAE
Businesses must provide specific documents to register for Corporate Tax in the UAE. The registration process can be completed online, and the following documents must be submitted:
a) A valid copy of the Trade License.
b) Valid passport copies of the owner(s) or partners associated with the license.
c) Valid Emirates ID of the owner(s) or partners associated with the license.
d) A Memorandum of Association (MOA) or a Power of Attorney (POA).
e) Contact details of the responsible person, including their mobile number and email address.
f) Company contact details, including the complete address and P.O. Box.
g) The Corporate Tax Period.
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Are you eligible for corporate tax exemptions in the UAE? Our Corporate consultants have in-depth knowledge of the tax laws and regulations, including the various exemptions available. We will assess your eligibility and guide you through obtaining exemptions, ensuring you take full advantage of the benefits.
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