All You Need To Know About The UAE Corporate Tax Compliance in 2024

All You Need to Know About the UAE Corporate Tax Compliance in 2024

In 2024, the UAE is preparing for a new era of corporate taxation, and enterprises operating in the country should prepare themselves with the vital process and understanding to follow approaching corporate income tax regulations. Successful businesses and firms searching for corporate tax advisory services from established partners to cling to the new policies. We all know that UAE is a very beautiful country with a no-tax policy for firms. But this may change, the UAE government launched the corporate tax in UAE. This initiative aims to boost public revenue and foster economic diversification within the country. 

The corporate tax affects all legal commodities that hold out their activities in the UAE, both foreign and national. In this blog, we deliver a comprehensive guide on the new corporate tax in the UAE. Here we explain, its definition, the scope of application, and how to register corporate tax in the UAE. 

What is Corporate Tax in The UAE 2024

In previous years, the UAE was utilized as very low tax rules. Citizens don’t need to pay taxes on their earnings. The majority of the state’s revenue is generated from domestic and private sectors, particularly from fossil fuel extraction enterprises. These sectors needed to pay a tax of around 50% on their income. On the other side, foreign banks have to pay corporate tax in the UAE. Yet, the UAE aims to modify its economy without relying on fossil fuels. This means many firms that do not pay taxes. Given the declining potential revenue from fossil fuels and the expanding economy, it’s logical for the government to consider implementing additional taxes on businesses. This is the prime reason to launch corporate tax in the UAE for the year 2024. 

Register For Corporate Tax 

The application of corporate tax is ready to begin from the first financial year starting on or after 1st June 2023 in the UAE. All enterprises and firms should register for corporate income tax, including with existing VAT registration. The Emara Tax portal on the Federal Tax Authority (FTA) website facilitates this procedure, delivering a seamless registration experience. This registration procedure is straightforward and takes only 30 minutes to complete the process. Businesses that are not now registered for Excise Tax or VAT must initiate by creating a new user profile on Emara Tax. Subsequently, they should select corporate tax registration and proceed with completing the application process. For successful registration, it is vital to deliver the correct information and update the related documents. 

Necessary Documents For Corporate Tax Registration

The necessary documents to complete corporate tax registration of legal persons include: 

  • An Emirates ID of the authorized signatory
  • Proof of authorization for the signatory
  • Trade license 
  • Passport 

The FTA needed the enterprise to deliver correct portions of shareholding that coincide with the existing holdings of the owners and align the date of incorporation with the inception date of the company as per the MOA. Entities must also deliver the tax period. Enterprises ready to form a Corporate Tax Group have to register. According to the FTA’s guidelines, they must acquire a Tax Registration Number and subsequently make an application to establish a Corporate Tax UAE Group at a later date.

Maintaining Proper Accounting Records 

In the UAE, the corporate tax law makes it necessary for enterprises to preserve specific accounting records. Companies are advised to enlist the support of professional teams for compliant bookkeeping and accounting practices. In Dubai, respected tax consultancy firms such as Tax Innovex provide essential assistance and guidance in this matter. The UAE corporate tax law will be necessary for all businesses and firms.

Companies liable for corporate tax must register and obtain their tax registration number. Many tax consultants deliver corporate tax services in UAE.  The new UAE law is a very notable change in the country’s fiscal policy. Yet, This corporate tax is anticipated to stimulate sustainable economic growth and foster investment in the UAE. Therefore, it is crucial to have comprehensive knowledge about this new law and ensure full compliance with all its provisions.