Corporate tax, also called corporate income tax or business tax, is an important part of a country’s financial system for businesses. In the United Arab Emirates (UAE), introducing corporate tax has major effects on businesses. This guide offers a detailed look at corporate tax in UAE to help you understand and follow the regulations properly.
What is Corporate Tax in UAE?
Corporate tax (CT) is a tax that businesses must pay on their profits. It is also known as “Corporate Income Tax (CIT)” or “Business Profits Tax” in other places.
On January 31st, 2022, the UAE Ministry of Finance announced that a new corporate tax started on June 1, 2023. Businesses in the UAE will pay a 9% tax on their profits, which is the lowest in the GCC region, except for Bahrain. This new system is designed to be easy for businesses to follow.
In simple terms, if a business makes more than AED 375,000, they will pay a 9% tax on the amount above that. They won’t pay any tax if they make less than AED 375,000.
Objectives of Corporate Tax (CT):
The UAE’s goals with the new Corporate Tax (CT) are:
- Make the UAE a top place for global business and investment.
- Speed up its growth and meet its big goals.
- Show it is serious about international tax rules and stopping bad tax practices.
Who should register for Corporate tax in UAE?
CT will be for:
- All businesses and people with a business license in the UAE.
- Free zone businesses (they still get their current tax benefits if they follow all rules and don’t do business in the mainland).
- Foreign businesses and people if they regularly do business in the UAE.
- Banks.
- Real estate businesses (like management, construction, development, agency, and brokerage).
Also, CT doesn’t apply to:
- People earning a salary or other work income from any sector.
- Interest and earnings from bank deposits or savings by individuals.
- Foreign investors’ earnings from dividends, capital gains, interest, royalties, and other investments.
- Individuals investing in real estate for themselves.
- Dividends, capital gains, and other earnings from shares or securities owned by individuals for themselves.
Who is Exempted From UAE Corporate Tax?
Some entities are automatically exempt from corporate tax in the UAE. These include government entities and government-controlled entities. Others that may be considered exempt are:
- Extractive businesses in the UAE (this includes mining, oil & gas, quarrying etc)
- Non-extractive natural resource businesses
- Government entities
- Entities controlled by the government
- Qualifying investment funds
- Pension or social security funds, both public and private
- Any other people specified by a Cabinet decision.
How To Register Corporate Tax in UAE Online?
To register for corporate tax in UAE online, you can use this method:
Register for Corporate Tax in UAE via EmaraTax Portal
To register through the EmaraTax Portal UAE, you can simply follow the steps below:
1. Log in to EmaraTax
- Visit the FTA EmaraTax website.
- Click “E-services”.
- Use your credentials or UAE PASS to log in.
- Once logged in, you’ll be directed to the EmaraTax dashboard.
- If no taxable persons are linked to your profile, click “Create New Taxable Person Profile” to add a new person.
2. Start the Registration Process
- Enter the profile name in English and Arabic.
- Choose your preferred language and communication channel.
- Then click “Create”.
- After you get the successful message, click “Ok”.
3. Start the Application Process
- Under your company name, click “View”.
- Click on the three “Corporate tax” dots and click “Register”.
- Next page, scroll down, and click on “I confirm that I have read the instructions”.
4. Select Entity Type
- Choose the entity type and entity sub-type of your business from the list in the entity details section.
- Select the date of incorporation, or you can upload the certificate of incorporation.
- Your financial year is your corporate tax period, so select accordingly.
- After completing the mandatory fields, click ‘Next Step’ to the ‘Identification Details’ section.
5. Proceed to Identification Details
- Provide the main trade license details based on the selected entity type.
- Scroll down and upload the trade license
7. Add Business Activities
- Click ‘Add Business Activities’ to list all activities related to the trade license.
- Enter the mandatory business activity details and click ‘Add’.
8. Add Owners
- Click the ‘Add Owner’ button to enter details of owners with at least 25% ownership.
- Enter the relevant details and click ‘Add’.
9. Add Branch Details (If Applicable)
- Select ‘Yes’ and add branch details if the business has branches.
- Provide each branch’s trade license details, related business activities, and owner information.
- The registration will be in the name of the Head Office, even if operations are conducted at the branch level.
10. Contact Details
- Enter the registered address of the business.
- Do not add other company or personal addresses, such as your accountant’s address.
- If you have multiple addresses, provide the location where most activities occur.
- For foreign businesses, appoint a tax agent in the UAE and provide the necessary details.
11. Authorized Signatory
- Click ‘Add Authorized Signatory’ to enter the relevant details.
- Legal persons may need to provide evidence of authorisation, such as a Power of Attorney or Memorandum of Association.
- You can also add more than one Authorized Signatory if needed.
- After adding the details, click “Add”.
12. Review and Declaration
- Click ‘Next Step’ to review the information provided.
- Carefully review all entered details.
- Check the box to declare the accuracy of the information.
13. Submit the Application
- Click ‘Submit’ to submit your application for Corporate Tax Registration.
- A Reference Number will be generated for your application. Keep this number for future correspondence with the Federal Tax Authority (FTA).
By following the steps outlined above, you can successfully register for corporate tax in the UAE through EmaraTax.
Note: For a more detailed explanation and detailed steps, please refer to this guide in this link.
Documents Required For Corporate Tax in UAE
The following are the documents that are required for registering for corporate tax in UAE:
- Trade License
- Emirates ID and the owners’ passport (if they own more than 25% of the shareholding) are considered owners for corporate tax registration purposes.
- Memorandum of association (MOA) or power of attorney.
Corporate Tax Registration UAE Deadline
For example, if the issuance date is in March or April, the company must submit its tax registration application by 30 June 2024. More details are provided below:
1. Resident persons
| Month of Licence Issuance | Deadline for Submitting Tax Registration Application |
| 1 January – 31 January | 31 May 2024 |
| 1 February – 28/29 February | 31 May 2024 |
| 1 March – 31 March | 30 June 2024 |
| 1 April – 30 April | 30 June 2024 |
| 1 May – 31 May | 31 July 2024 |
| 1 June – 30 June | 31 August 2024 |
| 1 July – 31 July | 30 September 2024 |
| 1 August – 31 August | 31 October 2024 |
| 1 September – 30 September | 31 October 2024 |
| 1 October – 31 October | 30 November 2024 |
| 1 November – 30 November | 30 November 2024 |
| 1 December – 31 December | 31 December 2024 |
For companies with multiple licenses, like a group with many operations, the registration deadline will be based on the license that was issued first.
2. Non-resident persons
Non-resident persons include companies with a permanent establishment in the UAE and those earning income from the UAE that is not connected to their permanent establishment.
Non-resident persons will only be taxed on the income related to their UAE permanent establishment or nexus. The deadlines are as follows:
| Category of Non-resident Person | Deadline for Submitting Tax Registration Application |
| Has a permanent establishment before 1 March 2024 | Nine months from when the permanent establishment was created |
| Has a nexus before 1 March 2024 | Three months starting from 1 March 2024 |
| Has a permanent establishment on or after 1 March 2024 | Six months from when the permanent establishment was created |
| Has a nexus on or after 1 March 2024 | Three months from when the nexus was established |
From now on, all taxable persons must submit their corporate tax registration application. If they miss the deadlines, they may face a penalty of AED 10,000.
Corporate Tax Period in UAE
After registering, companies must prepare for their first corporate tax filing, due nine months after their tax period ends. They must also pay any corporate tax within this time.
For most companies with a fiscal year ending on 31 December, the first taxable period is from 1st of January 2024 – 31st of December 2024. The deadline for the first tax return is the 30th of September 2025.
Businesses must keep all relevant records and documents for seven years after the end of the tax period. This is important for following UAE tax rules and for any future audits.
Corporate Tax Rate in UAE
All yearly taxable profits up to AED 375,000 will have a 0% tax rate. Any profits over AED 375,000 will have a 9% tax rate.
How to Calculate Corporate Tax in UAE?
To calculate Corporate Tax in the UAE, follow these steps:
- Prepare Your Accounts:
- Use IFRS (International Financial Reporting Standards) or other approved accounting standards in Dubai.
- Calculate Net Profit:
- The UAE Corporate Tax is 9% of the net profit shown in the financial statements.
Note: The 9% tax rate applies only if the taxable profit is above AED 375,000. Profits up to AED 375,000 are taxed at 0%.
| Final Taxable Income | Corporate Tax (CT) to be Calculated |
| AED 0 – AED 375,000 | CT at 0% |
| Above AED 375,000 | CT at 9% on the amount above AED 375,000 |
Final Takeaway:
Understanding and following corporate tax in UAE is important for businesses to run smoothly and avoid fines. By following the rules and keeping accurate records, businesses can easily meet corporate tax responsibilities. This guide gives a clear overview to help you understand the UAE’s new corporate tax system, ensuring your business stays compliant and successful.
Frequently Asked Questions (FAQs):
Q. How much is corporate tax in the UAE?
Annual taxable profits up to AED 375,000 are not taxed. Profits above AED 375,000 are taxed at 9%.
Q. Is it mandatory to register for corporate tax in the UAE?
Yes, according to Federal Decree Law 47 by the FTA, every taxable person, including those in Free Zones, must register for corporate tax and get a Registration Number
Q. What is VAT in UAE?
Value-added Tax (VAT), which started in the UAE on January 1, 2018, at a rate of 5%, gives the UAE extra income to help provide high-quality public services.
Q. Who are exempt persons in UAE corporate tax?Government entities and government-controlled entities are automatically exempt. Some natural resource businesses are exempt but must notify the UAE Ministry of Finance.
