In the United Arab Emirates (UAE), corporate tax registration and filing are essential obligations for Taxable Persons, governed by the Federal Decree-Law No. 47 of 2022. This comprehensive guide outlines the key elements, processes, and deadlines associated with UAE corporate tax, emphasizing the importance of seeking expert assistance from Tax Consultants in UAE for seamless compliance.
Who Must Register for Corporate Tax in the UAE?
According to Federal Decree-Law No. 47 of 2022, taxable persons are mandated to register for corporate tax unless qualifying for specific exemptions outlined in the regulations. Even entities eligible for exemption under the decree-law or functioning as applicable unincorporated partnerships must register and obtain a Tax Registration Number (TRN) to qualify for such exemptions.
Corporate Tax Registration Process:
Initiating the corporate tax registration process involves corporations registering their trade license with the Federal Tax Authority (FTA) to secure a Tax Registration Number (TRN). This entails completing an online registration form and submitting requisite documents, including and not limited to the trade license and articles of incorporation. Once registered, businesses receive a TRN for use in all tax-related documents and filings.
Key Components of Corporate Tax Registration in the UAE:
- Taxable Entities: Identification of entities subject to corporate tax, such as limited liability companies, partnerships, branches of foreign companies, and free zone companies (unless exempted).
- Tax Registration: Businesses meeting corporate tax criteria must register with the FTA, providing accurate information about their trade license, ownership structure, financial records, and contact details.
- Taxable Period: Determination of the taxable period by the FTA based on the company’s fiscal year, emphasizing accurate accounting records and timely filing and payment of taxes.
- Taxable Profit Calculation: Application of FTA guidelines to calculate taxable profit, considering applicable tax rates and making necessary adjustments, deductions, and exemptions.
- Tax Returns and Payments: Obligation for companies to file tax returns within specified time frames, including submission of required forms, statements, and supporting documents, with timely settlement of tax liabilities.
- Accounting and Record-Keeping: Maintenance of accurate accounting records and supporting documents for at least five years from the end of the taxable period.
- Auditing Requirements: Possible auditing requirements based on turnover and criteria, with the potential need for audited financial statements during tax assessments or investigations.
- Penalties and Compliance: Awareness of penalties and fines for non-compliance, underscoring the importance of staying updated on tax regulations and promptly responding to tax authorities.
Corporate Tax Filing Process in the UAE:
The corporate tax filing process involves the following steps:
- Obtaining a TRN: Businesses must obtain a unique TRN through the FTA’s online portal by providing essential information, including their trade license number, legal entity name, and contact details.
- Keeping Accurate Records: Maintenance of accurate financial records, including income, expenses, and assets, for a minimum of five years, available for inspection by tax authorities.
- Preparing the Tax Return: Ensuring the preparation of the tax return with all necessary documents and information, utilizing the tax return form provided by the FTA.
- Submitting the Tax Return: Submission of the prepared tax return through the FTA’s online portal before the deadline to avoid penalties.
Deadlines for Corporate Tax Filing:
Companies in the UAE must file tax returns annually, with deadlines based on their financial year-end. The deadline for companies with a financial year-end of 31 December is 31 March of the following year. For companies with different financial year-ends, deadlines vary accordingly.
Choose UAE Tax Consultants:
To navigate the complexities of corporate tax registration and filing, it is advisable for taxable persons to engage seasoned tax consultants in the UAE. These experts provide invaluable assistance in ensuring seamless compliance with corporate tax regulations and standards. Thus, contact Farahat & Co today for comprehensive support in corporate tax matters and we shall be glad to assist you.
Reference: https://mof.gov.ae/wp-content/uploads/2022/12/Federal-Decree-Law-No.-47-of-2022-EN.pdf