UAE: Corporate Tax Pre-registration Opens Ahead Of June 1 Deadline

As part of the Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses (the Corporate Tax Law), the UAE’s Federal Tax Authority (FTA) has started early registration for paying corporate tax through EmaraTax, the UAE digital platform for paying taxes. According to the new law formulated in 2022, taxable individuals and companies shall have to start paying their corporate taxes from June 1, 2023. The early registration system that starts from January to May 2023 has been open to companies belonging to certain categories in the UAE. 

FTA has assured smooth operations as part of the Corporate Tax registrations

The FTA has been preparing for the implementation of corporate tax for the past year and it will be sending emails and sms to companies that can register in the platform in the early phase. Later, the remaining companies will be notified about the registration dates at which they can also start registering for paying their corporate taxes.

FTA has also informed us that it will be given ample time to apply for the registration process and also to sort out its legal requirements in this regard. The businesses will need time to assess their accounting policies and related data management systems so that they can comply with the incorporation of the corporate tax laws of the UAE.

If there are concerns, the FTA will be listening to them and provide the necessary recommendations that will make the whole procedure a lot more transparent and efficient. As informed by the FTA, once the registration opens, first priority will be given to companies and businesses that have their financial year starting on June 1, 2023. 

General Khalid Ali Al Bustani, FTA Director-General, said that the FTA is making all efforts to make the whole process concerned with tax payments hassle-free and effective through collaborating with other competent authorities.

They are also taking special care that these procedures do not interfere with the smooth functioning of businesses in the Emirates and at the same time provide efficiency and accuracy in its operations. Al Bustani also said that FTA will support all the business initiatives in the UAE to comply with the new tax regulations by providing flexible mechanisms that work together with international best practices.  

The UAE corporate tax is considered to be one of the most competitive in the world with a tax collection rate of only nine percent and this will be applicable for companies that report a business profit of Dh 375,000 or above. This decision will further help the government to create a parallel revenue other than the oil sector and expand the UAE economy in a whole new direction.

As per reports, the corporate tax registration will be different from that of VAT registrations and all business concerns will be required to register under this even if their taxable income is below Dh 375,000 a year. It should also be noted that they don’t have to register for the corporate tax until they receive any notification from the FTA to register during the period between January to May this year.

The companies are given a maximum period of nine months before the financial year end to register and pay off their taxes in order to avoid any sort of penalties. That is, during the financial year that starts from June 2023 and ends by May 2024, the business concerned can register and pay their taxes within February 0f 2024 to avoid fines or penalties.    

This is a liberal stand taken by the FTA to give businesses and companies ample time to sort out their payment calculations and other legal obligations. Currently, the pre-registration phase is active and after this is over, the normal registration dates will be released by the FTA. Al Bustani assured that FTA works in the best interest of business firms and companies across the UAE.

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It is their core responsibility to keep the companies at a comfortable level of operations so that the UAE economy will be able to reap the benefits of a productive business culture. The non-oil economy has been structured by the UAE administration to create more growth in the coming years and the inclusion of tax-based revenue will definitely help the UAE to surge ahead through global recession risks.

As of now Value Added Tax and Corporate Tax are levied by the UAE administration and that too at very competitive rates when compared with the global economy.FTA has also said that they welcome productive suggestions and feedback from companies and individuals for making the registration process more seamless and accurate. More details will be released in the coming days by the FTA regarding the registration of corporate tax and also about the Federal Decree-Law No.47 of 2022 through the following link: https://tax.gov.ae/en/taxes/corporate.tax/corporate.tax.topics/what.is.corporate.tax.aspx