Introduction: A recent announcement by UAE authorities has introduced significant changes in the tax landscape of the country. Starting from June 1, 2023, a federal corporate tax of 9% will be applicable to taxable individuals and businesses, impacting their net profits. This decision aims to enhance the UAE’s position as a global business hub, aligning with international tax transparency standards. In this article, we provide an overview of the corporate tax framework, registration process, and applicable tax rates, including considerations for Free Zone Persons.

What is Corporate Tax in UAE? Corporate tax in UAE is a levy on the net profits of companies operating within the country. It serves as a vital revenue source for the government, supporting infrastructure development and public services.

Who Needs to Register for Corporate Tax in UAE? As per UAE Corporate Tax law, all taxable persons must register for UAE Corporate Tax and obtain a unique Corporate Tax Registration Number. Exempt Persons may also be requested to register for UAE CT to comply with the country’s legal requirements.

The Corporate Tax Registration Process: For a smooth corporate tax registration process, Bizedge offers dedicated assistance and support. Whether you are a new business or undergoing a corporate structure change, Bizedge ensures compliance with tax regulations and streamlines the registration process.

Documents Required for UAE Corporate Tax Registration: To successfully complete the registration process, it is essential to have all necessary documents validating eligibility and compliance. For a comprehensive list of required documents, contact Bizedge for expert guidance and assistance.

The Corporate Tax Registration Deadline: Meeting the corporate tax registration deadline is crucial to avoid potential non-compliance issues. Registration should take place before the company’s initial tax return filing.

Administrative Requirement Deadline Under Corporate Tax for Businesses: Entities subject to taxation, including Free Zone Persons, must register for Corporate Tax and obtain a unique Corporate Tax Registration Number. Corporate Tax returns should be submitted for each Tax Period within nine months from the end of the respective tax period, and any related liabilities must be settled within the same timeframe.

Applicable Corporate Tax Rates: The UAE follows a structured framework for Corporate Tax. Taxable income exceeding AED 375,000 will be taxed at a fixed rate of 9%, while income falling below this threshold will be taxed at 0% Corporate Tax Rate. This ensures a fair and transparent taxation process for businesses in the UAE.

Corporate Tax Applicability to Free Zone Persons: Qualifying Free Zone Persons enjoy a preferential corporate tax rate of 0% on their “Qualifying Income.” To qualify, they must maintain sufficient substance in a Free Zone, derive qualifying income, and comply with specific requirements. Non-compliance may result in a loss of Qualifying Free Zone Person status for subsequent tax periods.

Conclusion: The introduction of corporate tax in the UAE marks a significant step towards tax transparency and international standards. For businesses and Free Zone Persons, understanding the corporate tax framework and compliance requirements is essential. With Bizedge’s expertise, businesses can navigate the registration process and ensure timely and accurate reporting, contributing to the UAE’s vision of becoming a thriving global business destination.