Corporate Tax Pre-registration through EmaraTax

UAE: Federal Tax Authority opens pre-registration for corporate tax

The UAE has some of the most business-friendly tax laws in the region that encourage foreign investors and support local businesses. One of the best things about the UAE’s tax regulations is that most companies do not have to pay corporate tax.

The Federal Tax Authority (FTA) of the UAE announced on Sunday that it has begun early registration for corporate tax through the EmaraTax platform in order to provide digital tax services to registered members and businesses.

The most recent action is in accordance with Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses, which states that taxable persons will be subject to corporate tax beginning with their first fiscal year beginning on or after June 1, 2023.

Overview of UAE's corporate tax system

The UAE has a corporate tax system that is considered to be among the most favorable in the world. They have a progressive corporate tax structure, which means that taxes are levied on a company's income rather than its assets. This makes it easier for businesses to comply with the tax laws and reduces their overall tax burden.

In addition, the UAE offers a number of other benefits, such as a low rate of capital gains tax and preferential treatment for foreign investments.

What is the Federal Tax Authority?

The Federal Tax Authority (FTA) is a tax body that enforces federal taxation laws in the UAE. It offers a range of services, including tax compliance, tax appeal, and tax dispute resolution services.

Pre-registration for corporate tax

Pre-registration for corporate tax is an alternative way of ensuring business entities are registered before the start of their taxable year. This ensures business entities have time to prepare and follow tax regulations.

Pre-registration for corporate tax has been found to be beneficial as it reduces the time taken for entities to register for taxation and provides a level playing field for all businesses.

The benefits of pre-registering with the federal tax authority include greater awareness among businesses regarding taxation regulations, enhanced scrutiny of business transactions by authorities, and reduced audit burden on businesses.

Businesses can ensure compliance with federal taxation laws by keeping abreast of changes in taxation policies and practices, engaging legal counsel on taxation matters, implementing best practices in financial management, conducting due diligence on business partners, etc.

The pre-registration scheme of the FTA is an ideal way to register business entities and reduce the time taken by them to register for taxation.

Besides, it ensures a level playing field between all businesses and helps corporations adhere to federal taxation regulations. What’s more, the benefits of pre-registration with FTA are evident and can’t be ignored by business owners.

Pre-registration process for corporate tax in the UAE

Pre-registration for corporate tax in the UAE is a simplified process for companies with a Tax Registration Number (TRN) to register for tax liability and obtain a certificate of registration. This helps streamline the registration process and avoid delays.

• Under the pre-registration process, a company must first complete an online pre-registration form that outlines the registration requirements and eligibility criteria.
• After completing the form, the business must provide additional details to validate its registration. This can include financial statements, business plans, and other relevant information.
• To complete the pre-registration process, companies must submit an application for the TRN certificate of registration.
• These applications are processed within 20 business days and require companies to submit financial statements, business plans, and other relevant information.
• The TRN is issued once all registrations are approved by the tax authority.

Who Can Register

• Companies required to register for Value-Added Tax (VAT)
• Businesses with taxable supplies and imports over AED 375,000
• Individuals registered in the UAE as commercial agents or brokers
• Organizations with a valid UAE trade license
• Anyone who is involved in business in the UAE is required to register with the FTA. The authority deals with companies of all sizes, from large corporations to small businesses and individuals.

- To be eligible for registration, businesses must have a valid tax registration certificate from the authority and must meet certain financial requirements. This includes conducting business activities within the UAE and making taxable supplies and imports of AED 375,000 or more per year.

- Organizational entities must also have a valid trade license issued by the authority. Individuals must have a valid tax registration certificate issued by the authority. They must also meet financial requirements that are similar to those of organizations, including conducting business activities within the country and making taxable supplies and imports of AED 375,000 or more per year.

The authority explained that the early registration period is available for certain categories of companies operating in the UAE from January 2023 to May 2023. The FTA will send these companies invitations via email and SMS, allowing them to register on the EmaraTax platform.

"Since the announcement of the corporate tax in the UAE, the FTA has increased its efforts, in collaboration with the competent authorities, to develop procedures to implement it in accordance with the highest standards," said FTA Director-General Khalid Ali Al Bustani.

In due course, the FTA will provide more information about corporate tax registration, and more information about Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses will be made available via the link: https://tax.gov.ae/en/taxes/corporate.tax/corporate.tax.topics/what.is.corporate.tax.aspx