What is Corporate Tax in the UAE?
Outlined in Federal Decree-Law No.47 of 2022, the corporate tax applies to both local and foreign companies in the UAE. All businesses are required to register for corporate tax by the deadline established by the Federal Tax Authority (FTA). Registering is essential to avoid significant fines and ensure compliance with the UAE tax authorities.
Whether you are setting up a business or smoothly running a business, tax registration is necessary. At BalanceBrite, we provide practical and bespoke guidance related to corporate tax registration. Our professionals assure clients that their tax compliance is managed effectively.
Threshold & Terms for Corporate Tax UAE
- Zero tax on net profits up to AED 375,000.
- 9% tax on net profits of more than AED 375,000
- Zero tax for businesses if their revenue is lower than AED 3 million through the Small Business Relief
- Multinational companies are taxed in line with the OECD Pillar 2 rule.
Who Needs to Register for Corporate Tax in the UAE?
According to the UAE Corporate Tax law, all taxable persons must register for corporate tax and secure a Tax Registration Number (TRN), regardless of the set threshold.
- All the businesses operating and registered in the UAE are required to register for corporate tax.
- Businesses that have a net profit greater than AED 375,000 must be registered.
- Foreign companies with a long-term presence in the UAE are required to register for tax.
- Businesses and companies that are operating in the free zones with tax incentives must report income and register for corporate tax in the UAE..
- Those entities that are exempt from corporate tax must register to ensure compliance with the Federal Tax Authority (FTA).
- Freelancers and self-employed individuals with income greater than the threshold must register for the tax.
Who is Exempt from Corporate Tax?
Some companies and individuals are exempt from corporate tax in the UAE under certain conditions. However, the exempt entities have to register with the Federal Tax Authority (FTA). The following are exempt from corporate tax:
Corporate Tax Registration Deadlines
All businesses in the UAE must register for corporate tax under the deadline specified by the Federal Tax Authority (FTA). In case of failure, the companies may face heavy fines and penalties. BalanceBrite, a leading auditing firm in Dubai, helps businesses operating in the UAE to register for tax to prevent penalties. We provide comprehensive solutions for all your tax needs.
Why Choose Balance Brite for UAE Corporate Tax Services?
At BalanceBrite Tax and Accounting Services LLC, we offer outstanding services to our clients. Our experts will make the process trouble-free, giving you peace of mind. Choosing the right partner can make all the difference. Here’s why you should choose us:
Our team stays updated and has in-depth knowledge of the UAE corporate tax laws, assuring compliance with legal laws.
We offer transparent pricing, ensuring you know exactly what to expect for corporate tax registration.
We provide end-to-end support and customized guidance to our clients that suits their needs.
Our tax professional takes care of everything from start to finish, helping you avoid penalties.
Frequently Asked Questions
Which businesses have to register for corporate tax?
Every business operating in the UAE has to register for corporate tax. Whether you are a free zone entity or eligible for small business relief, you are required to register for corporate tax.
When was corporate tax introduced in the UAE?
The corporate tax was introduced on or after 1 June 2023.
What is the corporate tax threshold in the UAE?
Businesses with net profit up to AED 375,000 have to pay 0%, while those with more than AED 375,000 have to pay 9%. Multinational companies are taxed in accordance with the OECD Pillar 2 rule.
Who is exempt from the UAE corporate tax?
Many entities are exempt, including government bodies, companies controlled by government, natural resources extractive businesses, non-extractive natural resources businesses, and subsidiaries owned by exempt entities.
Is it mandatory to register for corporate tax in the UAE?
Yes, it is mandatory to register for corporate tax; otherwise, you may face hefty fines and penalties.
Which documents are required for corporate tax registration?
Copies of trade license, copies of Emirates ID and passport of license holder, Power of Attorney or Memorandum of Association, contact details for business and responsible person, and yearly audit report of business.
What happens if I miss the tax deadline?
If you miss the tax deadline, you may face significant fines and penalties.