Who should register for Corporate Tax in UAE?

What is Corporate Tax?
This is form of Direct Tax which is applicable on the Net Income of the company.
Alternatives names of Corporate Tax are, Corporate Income Tax, Business Profits Tax.

Who is Subject to Corporate Tax?
Corporate Tax has been implemented in UAE and is effective for financial years starting on or after 1st June 2023. (Federal Decree-Law No. (47) of 2022). Corporate tax will apply to Taxable persons for financial years starting on or after 1st June 2023.

Who should register for Corporate Tax?
As per the Tax Law issued, all businesses in UAE must register for Corporate Tax including Free Zone Entities.

In UAE all Taxable Persons must register for UAE Corporate Tax and to get a Corporate Tax registration number as per the UAE Corporate tax law. This is mandatory for all businesses regardless of whether their annual profit is below or higher the AED 375,000 threshold provide the Federal Tax Authority.

Documents required for Corporate Tax registration:
Below are the documents for mandatory registration on EMARATX:

1-Company's Main Trade License.

2-Owner List.

3-All Local Branch Details + Trade License of each branch

4-Authorized Signatory Details (with Power of Attorney).

5-Emirates ID / Passport of authorized signatory.

Who is Taxable Person?

A Taxable Person is an individual and/or entity that is subject to UAE Corporate Tax, a distinction is made between a Resident Person and a Non-Resident Person and the applicable Tax base will depend on the nature of the Taxable person.

TAXABLE PROFITS:

· Profit for the year is up to AED 375K, Corporate Tax Rate 0%

· Profit above AED 375K will subject to 9% Corporate tax for an additional amount over AED 375K.

Resident Person & Tax base:

· Entity Incorporated in UAE, then tax base worldwide income

· Foreign entity, managed and controlled in UAE, then tax base worldwide income

Non-Resident Person & Tax base:

· Derives UAE sourced income, Tax base will be UAE sourced income not attributable to the Permanent Establishment.

· Have Permanent Establishment, Tax base will be Taxable Income attributable to the Permanent Establishment.

· Having NEXUS in UAE, Taxable Income attributable to the Nexus.