Rhodes & Collins presents a comprehensive guide to the Corporate Tax Law (Federal Decree-Law No. 47 of 2022) in the United Arab Emirates, effective from June 1, 2023. Stay informed about corporate taxation with our invaluable insights into registration, exemptions, and compliance.
Corporate Tax Registration Essentials:
1. Who Needs to Register:
Individuals, both citizens and foreign nationals with a permanent place of business in the UAE, decide their corporate tax obligations. If the total business turnover exceeds AED 1 million, registration is mandatory (excluding income from wages, real estate, and personal usage).
2. Taxable Persons:
Residents engaging in business activities in the UAE are considered Taxable Persons. Non-residents can also qualify if they have a Permanent Establishment in the UAE or derive State Sourced Income.
Understanding Business and Corporate Tax:
1. Defining Business and Business Activity:
Detailed definitions in the UAE’s Corporate Tax Law determine corporate tax liability based on business activity, covering commercial, industrial, agricultural, vocational, professional, service, or excavation endeavors.
2. Taxable Income Inclusions:
Earnings from both local and international sources linked to conducted business fall under Taxable Income. Key considerations include the geographical location of contracting, business development, or production.
3. Total Turnover Calculation:
If a natural person’s UAE-based business generates over AED 1 million in total turnover within a calendar year, corporate tax applies. The calculation involves gross income minus expenses, excluding wages, personal investments, and real estate income.
Corporate Tax Exemptions:
Enjoy exemptions on wage income, personal investments, and real estate investment income. No corporate tax applies if the total turnover is below AED 1 million.
Corporate Tax Registration Process:
1. Using EmaraTax Platform:
Simplify the registration process using the EmaraTax platform. Existing credentials for Value Added Tax or Excise Tax registrants are applicable. New users can set up their credentials with guidance from the FTA website.
2. Easy Tax Registration Procedure:
Submit the application and required documents to the FTA. The FTA aims to process applications within 20 business days. A Tax Registration Number is provided upon approval.
3. Key Information for Registration:
Prepare essential information and documents, including contact details, passport, Emirates ID, sole establishment details, tax registration details, and bank account details.
Corporate Tax Compliance and Deregistration:
1. Obligations After Registration:
After registration, meet requirements such as filing tax returns and paying corporate tax within nine months of the tax period’s end. Keep records for seven years and ensure up-to-date registration information.
2. Deregistration Process:
Deregistration is necessary when no longer liable for corporate tax. Submit the application within three months of cessation, fulfilling all requirements, including tax returns and payments.
Corporate Tax and Death:
Upon death, a natural person loses Taxable Person status. Address corporate tax obligations before heirs receive their share of the estate. Compliance with post-distribution tax obligations is crucial.
Your Partner in Corporate Tax:
In the dynamic landscape of UAE’s Corporate Tax, trust Rhodes & Collins as your guide. From simplified registration to ensuring compliance, we navigate every aspect seamlessly. Rely on our expertise in the new Corporate Tax Law and the user-friendly EmaraTax platform for an effortless journey toward sustained financial success.
Choose Rhodes & Collins – where complexities are simplified, and success is tailored for you. Compliance is our commitment, and your prosperity is our mission.