How to file a Corporate Tax Return in UAE? Tax Consultant in Dubai

A significant change in the business environment of the United Arab Emirates has been brought about by the implementation of a federal corporate tax. Because of its low tax rates, the UAE is still a very desirable place to do business, but businesses now have to be aware of and abide by the new tax laws. Every company doing business in the Emirates, from start-ups to large multinationals, must have this; it is not merely a formality. This guide offers a straightforward explanation of the pertinent tax rates, what companies should know about corporate tax filing UAE, and how to seek expert help.

Understanding the Corporate Tax Rate in UAE

The tiered tax rate, which is at the heart of the new system, makes it extremely evident how much tax a business will have to pay.

1. 0% Tax Rate – A business’s taxable income up to AED 375,000 (roughly $102,100) is subject to the 0% tax rate. In order to enable small businesses and startups to expand without facing a significant tax burden, this zero-tax bracket was created.

2. 9% Tax Rate – Any taxable income over AED 375,000 is subject to this standard corporate tax rate in UAE. This is the primary rate that most businesses will be worried about.

3. 15% Tax Rate – Under the global tax regulations known as Pillar Two of the OECD Base Erosion and Profit Shifting (BEPS) project, large multinational corporations that satisfy certain requirements are subject to a different, higher tax rate. This applies to businesses with consolidated worldwide revenues of €750 million or more and is intended to bring the UAE into compliance with international tax standards.

It’s crucial to keep in mind that these rates are applied to a company’s taxable profit rather than its overall revenue. A company’s accounting profit is adjusted in accordance with the guidelines outlined in the UAE Corporate Tax Law to determine its taxable profit.

Corporate Tax Registration – The First Step to Compliance

You have to register your business for corporate tax before you can even consider filing a tax return. All taxable persons must go through this process, including corporations based on the mainland, entities operating in free zones, and even certain individuals with business licenses whose income surpasses a specific threshold.

The Federal Tax Authority’s (FTA) online portal, EmaraTax, is used for corporate tax registration. An outline of the procedures is provided below –

1. Register for an EmaraTax account or sign in – You can use the same login information if you already have an Excise Tax or VAT account. If not, your company will have to open a new account.

2. Launch the application for registration – Proceed to the corporate tax area and initiate the registration procedure. You will have to give specific details about your company.

3. Provide the necessary paperwork – Important documents such as your current trade license, a copy of the owner’s or authorized signatory’s Emirates ID, and the business’s memorandum of association (if applicable) must be uploaded.

4. Get your Tax Registration Number (TRN) by submitting – A Tax Registration Number, a special identification number for your company, will be issued to you after the application is submitted and reviewed by the FTA. To avoid serious penalties, it is imperative that you finish this step by the deadline you have set.

Even if you don’t owe any taxes, you could still be penalized AED 10,000 for not registering by the deadline.

Navigating the Corporate Tax Filing in UAE

The next step after registering your business is to prepare and submit your yearly tax return. Although the corporate tax filing UAE procedure is intended to be simple, it necessitates meticulous planning and precise financial documentation.

1. Financial Year – Your financial year and your tax period coincide. This is typically a 12-month period that corresponds to the calendar year (January 1 to December 31) for the majority of businesses.

2. Deadline to File – Within nine months following the conclusion of your fiscal year, you must file your corporate tax return and make any required tax payments. For instance, your tax return is due on September 30, 2025, if your fiscal year ends on December 31, 2024.

3. Single Return – Companies are exempt from filing provisional returns or making advance payments; they are only required to file a single corporate tax return per fiscal year.

Businesses need to have accurate financial and bookkeeping records in order to be ready for filing. According to the FTA, these documents must be retained for a minimum of seven years. You might also require audited financial statements, depending on the size of your company. All Qualifying Free Zone Persons and businesses with annual revenue over AED 50 million must have their financial statements audited.

Special Considerations for Free Zone Businesses

Businesses operating in free zones are subject to a unique framework under the UAE Corporate Tax Law. Although many Free Zone businesses can still benefit from the 0% corporate tax rate in UAE, this is not a given. A Free Zone business needs to be a “Qualifying Free Zone Person” in order to be eligible for the zero-rate. This implies that they have to –

Keep up proper substance in the United Arab Emirates.
Make “Qualifying Income,” which is typically defined as money earned from specific approved activities.
Not chosen to pay the standard corporate tax rate of 9%.
Keep your financial statements audited.

Any “non-qualifying income,” such as money earned from dealings with mainland companies, will be subject to the 9% tax rate in a Free Zone business. If this non-qualifying income surpasses a specific threshold, the business may no longer be exempt from paying taxes. Companies operating in free zones must be aware of these regulations in order to keep their 0% tax advantage.

The Role of Corporate Tax Services in UAE

The new tax system can be intimidating and complicated for a lot of businesses. This is where expert corporate tax services in UAE from Arabian Wingz come in very handy. Businesses can benefit from these services, which are provided by accounting and tax consulting firms, at every stage of the procedure, including –

1. Tax Registration – To avoid fines, make sure your company is properly and promptly registered.

2. Compliance and Advisory – Helping you maintain compliance with all regulations and offering professional guidance on how the law relates to your particular business model.

3. Tax Return Preparation – Preparing and filing your tax return on your behalf, as well as accurately determining your taxable income, is known as tax return preparation.

4. Audit Support – Assisting you in managing and getting ready for any possible FTA tax audits.

Businesses that use these services can concentrate on their operations knowing that professionals are taking care of their tax obligations.

Conclusion

The corporate tax in the United Arab Emirates is a recent but controllable reality for companies. Companies can easily comply with the new law by being aware of the corporate tax rate in UAE, completing the required corporate tax registration, and carefully handling the corporate tax filing process in the United Arab Emirates. Being proactive and knowledgeable is essential to guaranteeing your company’s ongoing success in the Emirates, regardless of whether you manage it internally or collaborate with reputable Corporate Tax Services in the UAE like Arabian Wingz.

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