Corporate tax registration for joint-stock companies and private businesses opens

Public joint stock companies and private companies in the UAE can begin registering for corporate tax from today before it comes into effect next month.

The corporate tax will be applicable for financial years starting on or after June 1.

Companies can register through the EmaraTax digital tax services platform, the Federal Tax Authority said yesterday.

The FTA invited taxable persons that are public joint stock companies and private entities “resident” in the UAE for corporate tax purposes to register, noting that this will not cover free zone persons – for whom registration will be made available at a later stage.

“Early corporate tax registration will allow ample time for companies and businesses to comply with their legal obligations,” the FTA said. “For the time being, the registration process will be available to individual legal entities only.”

Registration for other categories of taxable persons conducting business or business activity yet to be specified by a Cabinet decision, will open at a later date.

In January last year, the UAE announced the federal corporate tax with a standard statutory rate of 9 per cent. It brought the income of companies exceeding Dh375,000 ($102,000) within the tax ambit. Taxable profits below that threshold will be subject to a 0 per cent rate.

No corporate tax will apply on salaries or other personal income from employment, the Ministry of Finance said.

A “non-resident” company will not be required to register for corporate tax if it earns UAE-sourced income but does not have a “permanent establishment in the country”, the ministry said last month.

It added that government and government-controlled organisations as well as extractive businesses and non-extractive natural resource businesses that meet the set conditions are not required to register. Exemptions are also available to organisations such as pension or investment funds and public benefit organisations.

Small businesses in the UAE with revenue of Dh3 million ($816,880) or less can also benefit from a new corporate tax relief programme.

Entities that intend to form a corporate tax group are required to register individually first, and then, at a later date, they will be able to apply to form a corporate tax group, the FTA said.

An e-service card on corporate tax registration is available on the FTA website.