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In Dubai, UAE corporation tax is a direct tax imposed on the net income and other business-related entities. In other jurisdictions, corporate tax is called business profits or corporate income tax (CTI).
The United Arab Emirates (UAE) Ministry of Finance (MoF) made the historic announcement on January 31, 2022, that a new federal corporate tax (CT) system will be implemented in the UAE, effective for financial years beginning on or after January 1, 2023. The UAE has the lowest corporate income tax rate in the GCC, with Bahrain being the exception.
The authorities announced that a taxable person or business will be subject to a 9% corporate tax from the start of their first financial year annually on 01 June 2023. Since the announcement of company tax in Dubai, UAE has become 4th among the GCC countries to introduce a federal corporation tax in Dubai, UAE. The tax introduction aims to strengthen the country’s position as the leading business hub and enhance the objective toward development and transformation.
Corporate tax aims at helping the UAE build a sustainable economy to enhance corporate governance and thus, strengthening the economy. With the introduction of corporate tax UAE, the nation reaffirms its commitment to meeting international standards for tax transparency and preventing any fraudulent activities. Businesses that pay corporate tax offers several benefits, as mentioned below –
It also helps reduce companies’ post-tax income. This affects both direct and indirect shareholders, who receive their shares through investment funds or private pensions.
To register for corporate tax in the UAE, you need to visit the EmaraTax portal – the official e-service platform of the FTA (Federal Tax Authority). EmaraTax merges with government entities such as Central Bank and national technology-based programs like – UAE PASS to update the website interface and enhance user experience.
The following steps are required for corporate tax registration in the UAE –
Registering for corporate tax can be daunting. Hence, Rewind Consultancy can help you register your corporate tax successfully.
Corporate tax in the UAE are levied on the following –
Article 3 of the Corporate Tax Law states that there is no corporate tax (CT) on the qualifying income of an individual who qualifies for a free zone. A qualifying individual living in a free zone is liable to a 9% tax on all other income received unless it falls within an exception or is not covered.
Corporation tax varies from 0% to 9% depending on earnings and is mandatory for residents living in free zones. Since residents of free zones are liable to taxes, they must follow corporation tax rules. They are required by law to determine their taxable income, register as a corporation, pay the required taxes, complete and submit an annual tax return, and adhere to other rules.
At Rewind Consultancy, we have the most qualified and experienced tax consultants with extensive expertise and years of experience in corporate tax registration in UAE. Our corporate tax advisors offer quality services in the corporate tax registration process and help you stay compliant by helping you understanding the tax law. We offer guidance on tax implications of different business activities, help with the preparation and filing of annual tax return, and can represent the business before the FTA.
Our team help with early preparation of corporate tax compliance, as it saves a lot of time and effort, as well as costs and stress on individuals and companies. Contact us for the best corporate tax registration services in the UAE.
UAE businesses subject to corporate tax must register and obtain a tax registration number. The application must be submitted to the Federal Tax Authority (FTA), or businesses might be fined under fraudulent activities.
The authorities already released the corporate tax law on 9th December 2022. The UAE corporate tax law is available through a ‘Federal Decree-Law no. 47 of 2022’ on the FTA official website.
All the businesses that exceed AED 375,000 are subjected to corporation tax in Dubai. However, here is a list of specific companies that are exempted from corporate tax in UAE –
Corporate tax in UAE is calculated at 9% of the net profit shown in the company’s financial statements. The 9% corporate tax will be levied only if the taxable net profit exceeds 375,000 AED. For example – if the net profit is AED 475,000, the corporate tax will be AED 9000. ((475,000-375,000)*9/100).
All taxable persons (including people in free zones) will be required to register for corporate tax and obtain a corporate tax registration number. The FTA (Federal Tax Authority) might also require certain exempt persons to register for corporate tax.
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