CORPORATE TAX
Corporate Tax Registration In Dubai
We provide best corporate tax accounting services in UAE
Introduction To Corporate Tax
On 31 January 2022, the UAE Ministry of Finance announced the introduction of Federal Corporate Tax in UAE on business profits which will come into being for financial years starting on or after 1st June 2023. The tax will be levied on all corporations and commercial activities in the country, except for the “extraction of natural resources” which will remain subject to emirate level taxation. The government will continue to honour the corporate tax incentives being offered to free zone businesses that meet all regulatory requirements and that do not carry out business in the UAE mainland. For small businesses with taxable profits not exceeding AED 375,000 (approximately USD 102,100) 0% is incurred to facilitate the development of startups. This new regime intends to support small businesses along with global operations. However Corporate tax premises are quite new for businesses and call for professional assistance to comply with the updated tax regulations.
Applicable Rates Of Corporate Tax In UAE
Corporate tax applies to diverse businesses as follows:
- 0%, for taxable income not exceeding AED 375,000
- 9%, for taxable income exceeding AED 375,000
- a different tax rate (to be specified) for large multinational companies meeting specific criteria set with reference to Pillar II of the OECD BEPS.
Corporate Tax Exemptions
The following entities are exempted from the premises of corporate tax.
- Businesses involved in the extraction of natural resources
- Dividends and capital gains made by UAE businesses from its sales of shares
- Qualifying intra-group transactions and reorganizations meeting the necessary conditions
Corporate Tax Registration in UAE
All registered businesses in the UAE are subjected to Corporate tax. A business subject to Corporate Tax will have to register with the FTA. After registration, a Tax Registration Number will be obtained within a prescribed period.
How Can MAATS Help?
Our tax consultants will help you determine whether or not your business is subjected to the premises of CIT. From the process of registration, certification, and submission of required documents, to the successful establishment of business, our tax specialists at MAATS will guide you Corporate tax registration in Dubai through the processes as smooth as possible. We never make things late; as timely panning and submission are critical in reducing the client’s pressure to complete the preparations on time. With a holistic approach to tax consulting and bookkeeping, MAATS provide services in Corporate tax accounting, Corporate tax planning, VAT consulting services and company set-up. Feel free to reach out to us with your requests and queries!
Frequently Asked Questions
Corporate Tax, also known as Corporate Income Tax or Business Profits Tax in some jurisdictions, is a form of direct tax imposed on the net income or profit generated by corporations and other businesses.
The UAE is introducing a Corporate Tax (CT) regime to solidify its position as a prominent global business and investment hub while facilitating the country’s progress towards achieving its strategic objectives. By implementing a competitive CT framework based on international best practices, the UAE aims to accelerate its development and transformation.
The UAE CT regime will become effective for financial years starting on or after 1 June 2023.
Examples:
If a business has a financial year starting on 1 July 2023 and ending on 30 June 2024, it will become subject to UAE CT from 1 July 2023 (the beginning of the first financial year that starts on or after 1 June 2023).
If a business has a financial year starting on 1 January 2023 and ending on 31 December 2023, it will become subject to UAE CT from 1 January 2024 (the beginning of the first financial year that starts on or after 1 June 2023).
UAE Corporation Tax applies to juridical persons incorporated in the UAE and juridical persons that are effectively managed and controlled within the UAE. It also applies to foreign juridical persons that have a permanent establishment in the UAE.
Individuals will be subject to Corporation Tax only if they are engaged in a business or business activity in the UAE, either directly or through an unincorporated partnership or sole proprietorship.
No, UAE Corporate Tax (CT) and VAT (Value Added Tax) are two distinct types of taxes. Both will continue to be applicable in the UAE.