UAE Tax: Everything you need to know about corporate tax registration

UAE Tax: Everything you need to know about corporate tax registration

Friday 19 May 2023Wed 16 Feb
UAE Tax: Everything you need to know about corporate tax registration

As a UAE resident, hearing the word ‘tax’ might be uncommon and most of us don’t even think about it. Surprisingly, some of us don’t even know what tax is and who can blame them!

But like most countries globally, the UAE has recently announced the introduction of UAE tax, starting with VAT back in 2018, there’s now corporate tax in the UAE, coming at the end of June. The Federal Tax Authority (FTA) has launched the registration for corporate tax in the UAE through a new digital tax services platform known as EmaraTax.

This was launched for UAE tax services on May 15th - and here’s everything you need to know…

What is EmaraTax and how does it work?

EmaraTax is a digital tax services platform that Taxable Persons need to be paying for UAE corporate tax purposes. All those working in public joint stock companies and private sector companies are liable to UAE tax and are to be paying corporate tax.

According to the Federal Tax Authority, those who work in government companies or free zones are not entitled to pay for corporate tax.

If you’re eligible for UAE tax, you would need to obtain a tax registration number through the Federal Tax Authority in order to pay your corporate tax. And if you’ve still got a few questions in regard to corporate tax, let us give you a refresher!

Corporate Tax in the UAE - A refresher:

Effective June 1st, 2023 - The UAE announced a corporate tax of 9% which is applicable to companies that generate a turnover of AED 1 million yearly, which was announced on May 17th, 2023.

This tax applies only to private sector companies, public limited companies and businesses but is exempt to government companies and is currently not applicable to freezone businesses either, but registration for freezone will be made soon.

Businesses that generate a turnover below AED 1 million will be exempted from corporate tax as this is to support start-ups and small businesses.

In addition, the Corporate Tax regime provides financial and administrative relief to support start-ups and small businesses. Businesses qualifying for such relief will not pay any tax and avail simplified filing requirements where their turnover is up to AED 3 million.

Does corporate tax apply to personal incomes too?

If you’re wondering whether UAE tax applies to your income too - then no, this isn’t income tax, corporate tax solely applies to company revenues and has nothing to do with an individual’s personal salary, rental income or any other income that isn’t enterprise related.

And also, corporate tax doesn’t apply to non-resident companies, if you are generating a source of income through the UAE but do not have a company set-up base here, you do not need to sign up for the corporate tax.

How to sign up for EmaraTax?

Those who are eligible to register will have to generate a tax registration number through the website after which they can then obtain an e-service card on tax registration.

In order to register on the Federal Tax Authorities newest system - EmaraTax, it requires businesses to ensure that the documents requested by the website are submitted to the Federal Tax Authority are correct and comply with the law.

If you have any questions or further queries, you could get in touch with the Ministry of Finance.

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