Corporate Tax Accounting in UAE
Corporate Tax Accounting in UAE
UAE Corporate Tax
The UAE corporate tax will be applied to all businesses and commercial activities in the UAE, except the commercial activities of the extraction of natural resources, which come under the emirate-specific taxation. The corporate tax will apply to taxable income above AED 375,000. A 9% tax rate is applicable for taxable income above AED 375,000. The tax rate will be different for large multinational companies that meet certain criteria. The new tax regime will apply for the first time to the financial year 2023 to 2024. The Federal Tax Authority will be the responsible government entity for the administration, collection, and enforcement of the corporate tax regime in the UAE. The Ministry of Finance will continue to be the competent authority for purposes of international tax agreements, treaties, and the exchange of information for tax purposes.
Individual income through private or public sector employment is exempted from being taxed under the corporate tax. Capital gains earned from personal investment and personal property will not come under the corporate tax. And also, for the businesses registered in the free zones in the UAE, the corporate tax exemption is granted subject to the fulfillment of certain conditions.
The Importance Corporate Tax Accounting in UAE
Corporate tax payment is relevant for any business entity in the UAE. Errors in the accounting process may lead to a business loss. So those who are in the field of business must be vigilant while going through the taxation processes. Availing proper corporate tax accounting company in UAE ensures the business firms comply with tax laws by filing tax returns.
A corporate tax accounting company in UAE will help in the following aspects as well.
- They conduct the impact study of the corporate tax accounting and assess these to the business.
- They initiate proper corporate tax planning and advise management about the latest updates/pronouncements and do the proper actions for the company.
- Categorize business activities according to the requirements especially for the free zone companies.
- Corporate tax accounting company will help to identify the tax payable position at regular intervals.
- Corporate tax accountants helps in maintaining proper books of accounts which is required by the FTA.
- Their corporate tax accounting services will be helpful to increase creditworthiness & goodwill in the market.
Major Corporate Tax Accounting Services Provided By Corporate Tax Accountants
- Advice on corporate tax accounting
- Corporate impact study at the beginning and corporate tax planning.
- Preparation of the proper balance sheets, profit and loss and other reports according to the requirements of the CT law
- Filing of corporate tax returns
- Answers to the queries raised by the relevant authorities
- Assisting in tax audit matters.
Why To Choose MAATS As Your Corporate Tax Accounting Company In UAE
Consulting the right company for your corporate tax accounting in UAE can help you prepare, analyse, and file tax returns, without committing any mistakes. Just like bookkeeping and auditing services, corporate tax accounting service is going to be an important aspect of any business firm in the UAE. MAATS has been providing expert services in the accounting and auditing field for many years. We can help you to deal with the tax structure of your business in a professional way. Our corporate tax accountants will help you with tax issues and find suitable solutions that benefit the nature and needs of your business. We provide you with effective tax management advice to plan your tax payments and give assistance in filing corporate tax returns. At MAATS, we give priority to customer satisfaction and we offer onsite and offsite accounting solutions at the convenience of our clients.
Frequently Asked Questions
MAATS offers a full suite of corporate tax accounting services, including:
- Expert advice on corporate tax accounting and planning.
- Conducting a corporate impact study at the beginning of the process.
- Preparation of balance sheets, profit and loss statements, and other reports as required by the Corporate Tax Law.
- Accurate filing of corporate tax returns.
- Assistance with tax audit matters and responding to queries from authorities.
Yes, every taxable person, including mainland companies, free zone entities, and even those that may not owe any tax, must register for corporate tax with the FTA to obtain a Tax Registration Number (TRN) . This is a legal requirement. Failure to register on time can result in a penalty of AED 10,000 . Registration is done online through the EmaraTax portal.
The deadline for filing your corporate tax return and paying any due tax is within nine months of the end of your financial year. For example, a company with a December 31 year-end must file by September 30 . While registration deadlines can vary, it is critical to register as soon as possible to avoid penalties. Individual business owners with turnover exceeding AED 1 million have a separate, earlier registration deadline
The FTA enforces strict penalties for non-compliance, including:
- Late Registration: A flat penalty of AED 10,000 .
- Late Filing: AED 500 per month for the first 12 months, increasing to AED 1,000 per month thereafter .
- Late Payment: An interest of 14% per annum, calculated monthly on the outstanding amount .
- Record-Keeping Violations: Penalties of AED 10,000 for first offenses, doubling for repeat offenses .
Yes, absolutely. Free zone companies must register for corporate tax and file an annual return, even if they expect to qualify for the 0% tax rate . The 0% rate is not automatic; it applies only to Qualifying Free Zone Persons (QFZPs) that maintain adequate substance, prepare audited financial statements, and meet other conditions. Income not meeting the criteria is taxed at the standard 9% rate .
SMEs are not exempt from the tax. However, the law provides a Small Business Relief for businesses with revenue not exceeding AED 3 million in the current and previous tax periods . This relief allows them to be treated as having no taxable income, which simplifies their compliance, but they must still register and file a return. The relief is available until December 31, 2026 .
Yes. Foreign entities that have a permanent establishment (a fixed place of business) in the UAE are required to register and pay corporate tax . Additionally, natural persons (individuals) conducting business activities in the UAE and whose annual turnover exceeds AED 1 million are also subject to corporate tax registration and filing requirements .
Yes, the UAE Corporate Tax Law provides for certain reliefs:
- Loss Relief: Businesses can carry forward losses to offset against future taxable income, subject to specific conditions, including a requirement that the company maintains the same shareholders and activities .
- Intra-Group Transfers: Transfers of assets or liabilities between companies in the same group may be made on a tax-neutral basis, meaning no immediate tax is due, provided certain conditions and ownership thresholds are met .
These are complex areas where professional advice is highly recommended to ensure you benefit correctly.
If you discover an error in a filed return, you can submit a voluntary disclosure to the Federal Tax Authority (FTA) to correct the mistake. The FTA has specific procedures for this, and penalties may apply depending on the nature of the error and when it is corrected. It's always better to proactively correct errors than to have them discovered in a tax audit . Our corporate tax accounting services include assistance with preparing and submitting voluntary disclosures to minimize penalties.
