Corporate Tax Deadline in UAE

Meeting the UAE Corporate Tax Deadline: A Guide for Businesses Attention Businesses in the UAE: A Crucial Deadline Approaches The implementation of corporate tax in the UAE marks a significant change for businesses operating in the region. As this new system takes effect, staying informed and compliant is essential. This article serves as a guide for businesses, particularly those established before March 1, 2024, to ensure they meet the upcoming corporate tax registration deadline. The Looming Deadline: May 31st, 2024 For companies whose trade licenses were issued between January 1st and February 29th, 2024 (regardless of the year), a critical deadline is fast approaching. May 31st, 2024, marks the mandatory registration date for corporate tax. Failing to register by this date can lead to penalties, so taking proactive steps is crucial. Navigating the Registration Process Here’s a breakdown of the steps to ensure your company’s timely registration: License Issuance Date Verification: The first step is to confirm your company’s trade license issuance date. If it falls within the January-February window mentioned earlier, registration is mandatory. Document Gathering: Prepare the necessary documents for registration. This typically includes your trade license, financial statements, and any other relevant information required by the Federal Tax Authority (FTA). Registration Submission: Once all documents are assembled, proceed with submitting your corporate tax registration application. The FTA website provides online registration channels. However, if you require assistance or encounter any difficulties, seeking professional guidance is recommended. Maintaining Compliance: Registration is just the beginning. Businesses must maintain ongoing compliance with UAE tax regulations. This includes meticulous record-keeping, timely filing of tax returns, and staying updated on any changes to the tax regime. Benefits of Seeking Professional Help The complexities of corporate taxation can be daunting, especially for businesses unfamiliar with the new system. Partnering with a qualified tax advisor can offer invaluable benefits. Experienced professionals can ensure a smooth registration process, guide you through compliance requirements, and provide ongoing support to navigate the evolving tax landscape. Conclusion: Taking Action Now Ensures Peace of Mind By following these steps and considering professional assistance, businesses can confidently approach the May 31st deadline. Avoiding potential penalties and ensuring long-term compliance is key to financial security in the new corporate tax environment. Remember, staying informed and proactive is crucial for businesses operating in the UAE. Don’t wait until it’s too late. Contact Square International Auditing and Advisory today to secure your company’s financial future in the UAE.

Which Entities are Exempt from UAE Corporate Tax?

Which Entities are Exempt from UAE Corporate Tax? Entities exempt from UAE Corporate Tax enjoy certain privileges under the tax laws established by the Ministry of Finance. Before integrating corporate tax into your business operations, it’s essential to verify if you meet the specific conditions outlined by the Ministry to qualify for exemptions. The Corporate Tax initiative, introduced in January 2022 with a tax rate of 9%, is scheduled for nationwide implementation in June 2023. This timeline affords businesses adequate time to make necessary adjustments and updates to ensure compliance with the upcoming regulations. Entities exempt from Corporate Tax in the UAE include: Small and medium-sized businesses with revenue up to AED 375,000. Free Zones continuing to offer various incentives along with corporate tax exemptions. Businesses operating exclusively in Free Zones. Dividends and capital gains received from shareholdings. Inter-group transactions and reorganizations. Entities eligible for exemption from UAE Corporate Tax include: Government entities. Government-affiliated entities. Extractive businesses. Non-extractive natural resource businesses. Qualifying public benefit entities. Qualifying investment funds. However, these entities must meet specific conditions to qualify for corporate tax exemption. For detailed guidelines on complying with the tax law and securing exemption from UAE Corporate Tax, refer to the provided guide for entities. Here are simplified points regarding the treatment of government entities and affiliated entities under the Corporate Tax Decree Law: Government Entities: Exempt from Corporate Tax, and the law’s provisions do not apply to them. If conducting a business activity under a license, subject to the Decree Law’s provisions. Maintain separate financial statements for licensed business activities. Taxable income for licensed business activities calculated independently. Transactions between licensed businesses and other activities subject to related-party laws. Must apply to the Authority to be considered a single taxable person. Government-Affiliated Entities: Exempt from Corporate Tax, with provisions applicable only to non-mandatory activities. Maintain separate financial statements for non-mandatory activities. Taxable income for non-mandatory activities calculated independently. Transactions related to non-mandatory tasks subject to related-party laws. Exemptions not applicable to contractors, subcontractors, or producers. Regarding exemptions from Corporate Tax for persons engaged in Extractive Business: Exempt if meeting specific conditions issued by the Local Government. Inheritance of income subject to certain conditions. No inheritance from supportive businesses if revenue is less than 5% of total revenue. Taxable income for other businesses calculated independently. Subject to tax regulations imposed by the Local Government. For Non-Extractive Natural Resource Business: Exempt if meeting specific conditions from the Local Government. Inheritance of income subject to certain conditions. No inheritance from supportive businesses if revenue is less than 5% of total revenue. Taxable income for other businesses calculated independently. Subject to tax regulations imposed by the Local Government. Qualifying Public Benefit Entities: Exempt if established and operated for specific purposes. Engage only in activities related to its established purpose. Income or assets should not benefit individuals not falling under specific categories. Additional conditions may apply based on the Cabinet’s decision. Exemption criteria application specified by the Cabinet. For Qualifying Investment Funds: May apply for exemption if meeting specified conditions. Regulatory supervision and trading requirements must be met. The primary purpose of the fund should not be tax evasion. Additional conditions may apply based on the Cabinet’s decision.   With the top tax consultants in the UAE, navigating through Corporate Tax laws is a breeze. SQUARE INTERNATIONAL Auditing Dubai boasts highly qualified and experienced tax advisors who keep abreast of FTA’s regulatory updates. Whenever you need guidance or support concerning Corporate Tax, you can count on us. Contact SQUARE INTERNATIONAL  auditing & advisory.for assistance with Corporate Tax Law changes!

Deadlines for UAE Corporate Tax Registrations

Deadlines for UAE Corporate Tax Registration :An administrative penalty of Dh10,000 applies for late registrations Under the UAE Corporate Tax (CT) Law, it is mandatory for Taxable Persons and certain categories of Exempt Persons (such as Qualifying Public Benefit entities and Qualifying Investment Funds) to Register for Corporate Tax with the Federal Tax Authority (FTA) to obtain a Tax Registration Number (TRN). Previously, the FTA outlined the deadlines for obtaining Corporate Tax Registration and applying for exemptions for specific categories of Exempt Persons through Decision No. 7 of 2023. Now, the FTA has issued Decision No. 3 of 2024, delineating the timelines for submitting applications for CT registration for all Taxable Persons under the UAE CT Law. Additionally, it has modified Cabinet Decision No. 75 of 2023 (via Cabinet Decision No. 10 of 2024) to define the administrative penalty of AED10,000.for non-compliance with these deadlines. Timeline for the Tax Registration of Resident Juridical Persons A juridical person that is a Resident Person, incorporated or otherwise established or recognized prior to the effective date of this Decision, shall submit the Tax Registration application, in accordance with the following table: Date of License Issuance Irrespective of Year of Issuance Deadline for Submitting a Tax Registration Application 1 JANUARY- 31 JANUARY 31 MAY 2024 1 FEBRUARY- 28/29 FEBRUARY 31 MAY 2024 1 MARCH-31 MARCH 30 JUNE 2024 1 APRIL-30 APRIL 30 JUNE 2024 1 MAY-31 MAY 31 JULY 2014 1 JUNE-30 JUNE 31 AUGUST 2024 1 JULY-31 JULY 30 SEPTEMBER 2024 1 AUGUST-31 AUGUST 31 OCTOBER 2024 1 SEPTEMBER-30 SEPTEMBER 31 OCTOBER 2024 1 OCTOBER-31 OCTOBER 30 NOVEMBER 2024 1 NOVEMBER-30 NOVEMBER 30 NOVEMBER 2024 I DECEMBER- 31 DECEMBER 31 DCEMBER 2024 WHERE A PERSON DOES NOT HAVE A LICENSE AT THE EFFECTIVE DATE OF THIS DECISION (3) THREE MONTHS FROM THE EFFECTIVE DATE OF THIS DECISION Where a juridical person has more than one Licence, the Licence with the earliest issuance date shall be used. A juridical person that is a Resident Person incorporated or otherwise established or recognized on or after the effective date of this Decision, shall submit a Tax Registration application, in accordance with the following table: CATEGORY OF JURDICAL PERONS DEADLINE FOR SUBMITTING A TAX REGISTRATION APPLICATION A person that is incorporated or otherwise established or recognised under the applicable legislation in the state,including a free zone person (3) Three months from the date of incorporation ,establishment or recognition. A person that is incorporated or otherwise established or recognized under the applicable legislation of a foreign jurisdiction that is effectively managed and controlled in the state. (3) Three months from the end of the financial year of the person. Timeline for the Tax Registration of Non-Resident Juridical Persons A juridical person, that is a Non-Resident Person prior to the effective date of this Decision, shall submit a Tax Registration application in accordance with the following table: CATEGORY OF JURDICAL PERSONS DEADLINE FOR SUBMITTING A TAX REGISTRATION APPLICATION A person that has a permanent establishment in the state (9) Nine months from the date of existence of the permanent establishment A person that has a nexus in the state (3) Three months from the effective date of this decision 2.A juridical person,that is a Non-Resident person on or after the effective date of this decision ,shall submit a Tax Registration Application in accordance with the following table:  CATEGORY OF JURDICIAL PERSON DEADLINE FOR SUBMITTING A TAX REGISTRATION APPLICATION A person that has a permanent establishment in the state. (6) Six moths from the date of existence of the permanent establishment A person that has a nexus in the state (3) Three months from the date of establishment of the nexus. Timeline for Tax Registration of Natural Persons A natural person conducting a Business or Business Activity in the State shall submit a Tax Registration application in accordance with the following table: CATEGORY OF NATURAL PERSONS DEADLINE FOR SUBMITTING A TAX REGISTRATION APPLICATION A resident person who is conducting a business or business activity during the 2024 gregorian calender year or subsequent years whose total turnover derived in a Gregorian calendar year exceeds the threshold specified in the relevant tax legislation 31 March of the subsequent Gregorian calendar year A non-resident person who is conducting a business or business activity during the 2024 Gregorian calendar year or subsequent years whose total turnover derived in a Gregorian calendar year exceeds the threshold specified in the relevant tax legislation (3) three months from the date of meeting the requirements of being subject tax Corporate Tax Service in UAE Looking for comprehensive and reliable corporate tax services in the UAE? Square International Auditing and Advisory is your one-stop solution. Our dedicated team of tax experts possesses the knowledge and experience to navigate the complexities of the UAE’s corporate tax landscape, ensuring compliance and optimizing your tax position. We streamline your tax processes, freeing you to focus on growing your business. Don’t let tax concerns hold you back – contact Square International today and experience the difference of exceptional corporate tax service in the UAE. Our Corporate Tax Services in UAE include: Corporate Tax Assessment/Advisory :  Our experts analyze your business and provide tailored advice to minimize your tax liability and maximize compliance. Schedule a free consultation today! Corporate Tax Registration: We handle the entire registration process, ensuring you meet all UAE tax authority requirements. Get started with hassle-free registration! Corporate Tax Return Filing: Let our team handle your tax return filing, ensuring accuracy and timely submission. Focus on your business, leave the filing to us!   Don’t let corporate tax complexities slow you down. Contact Square International today and experience the difference!

What are the tax group under the UAE corporate tax?

What are the tax group under the UAE corporate tax? Starting from June 1, 2023, the UAE has adopted a federal corporate tax in line with global standards. A crucial aspect of this tax law is the provision concerning tax group structures, dividing them into two categories: Qualifying Group and Tax Group. In a Qualifying Group, formed between two or more entities, an individual must hold at least 75% direct or indirect ownership in each entity. Approval from the Federal Tax Authority isn’t necessary to establish a Qualifying Group. The primary advantage lies in the ability to transfer tax losses and assets among group members without recognizing gains or losses. However, each member still files tax returns individually based on their standalone results, limiting the benefits of consolidation. On the other hand, a Tax Group offers more substantial benefits, allowing full horizontal consolidation. To qualify, a company must directly or indirectly possess at least 95% of voting rights in other entities. To qualify as a qualifying group, companies must meet specific criteria: They must be UAE residents or have a permanent establishment in the UAE. Each company within the group must have at least 75% of its voting rights and share capital owned by another company in the group. All companies in the group must use the same accounting standards and have the same financial year. None of the companies in the group can be exempt from corporate tax or be a qualifying free zone person. Once formed, a qualifying group calculates corporate tax based on the group’s overall profits rather than each individual company’s profits. This consolidation can lead to significant tax savings, particularly if some companies within the group are experiencing losses.When assets or liabilities are transferred between qualifying group members, they’re treated as being transferred at the net book value, resulting in no gain or loss unless specifically elected otherwise. During the calculation of taxable income, depreciation or amortization is excluded unless the assets or liabilities are sold to a third party. In such cases, any gain or loss incurred by the transferor, which was not previously subject to corporate tax due to the qualifying group relief, is taken into account Eligibility of Creating Tax Groups To form a Tax Group in the UAE, companies must meet strict eligibility criteria, primarily centered around ownership and control between entities: A company should directly or indirectly hold at least 95% of the voting rights and share capital of other entities it seeks to include in the Tax Group. This threshold must be met at both the beginning and end of the tax period. Voting rights can be held directly through shareholding or indirectly through other controlled entities. Entities wholly owned by individuals cannot form a Tax Group, even if they operate in the same business sector. Group ownership is necessary. However, not all companies are eligible to form a qualifying group under UAE CT Law. Ineligible entities include real estate investment trusts, qualifying free zone persons, and exempt persons. Additionally, companies involved in illegal activities, experiencing financial difficulty, or with a history of non-compliance with tax laws may also be ineligible. Approval from the Federal Tax Authority (FTA) is mandatory to form a tax group. Companies must apply to the FTA, providing details of member entities and meeting eligibility criteria. The FTA considers factors such as genuine business purpose, commercial rationale for consolidation, and ownership structure before granting approval. Ad-hoc arrangements created solely for tax benefits may not receive approval. Forming a qualifying group offers several benefits, including reduced tax liability, simplified tax compliance, and improved financial reporting. Companies considering this option should contact the FTA for guidance. Working with qualified professionals ensures proper structuring to maximize the benefits of forming a qualifying group. How SIAA can help you? Square International Auditing and Advisory is one of the top accounting and auditing firms in the UAE, equipped with a team of knowledgeable experts well-versed in all prevailing tax laws, especially the recently introduced corporate tax. Our proficient experts can guide your firm to ensure compliance with corporate tax laws and help develop a robust tax framework to keep your firm on the right track, ensuring you avail all reliefs and benefits. Receive personalized and custom-tailored service packages for your firm in the UAE from our leading accounting and auditing team. For more information about our services, feel free to reach out to our team at any time.

Documents required for Corporate Tax Registration in UAE

Documents required for Corporate Tax Registration in UAE For businesses and qualifying Free Zone Persons in the UAE, submitting the necessary documents for corporate tax registration is essential to ensure compliance. These documents must be legitimate and reliable to gain approval from the Federal Tax Authority (FTA). If you’re seeking corporate tax registration services, contact Square International Auditing, the leading Corporate Tax Service Provider in the UAE. The UAE has introduced a 9% corporate tax on company profits, with a threshold set at AED 375,000. Businesses gearing up for this corporate tax implementation must grasp critical administrative requirements, including corporate tax registration, deregistration, filing of tax returns, and payment. Engaging with corporate tax consultants in Dubai can provide business owners with valuable insights into these compliance requirements beforehand. Failure to adhere to these requirements may result in significant corporate tax penalties in the UAE, which could be announced by the government soon. Documents required for UAE Corporate Tax registration Businesses aiming to register for Corporate Tax in the UAE should prepare the necessary documents. The registration process, along with fee submission, will be conducted online. Below are the documents required for Corporate Tax Registration in the UAE: Passport copy of the owner/partners holding the license (valid, not expired). Copy of the Trade License (valid, not expired). Contact details of the concerned person (mobile number and email). Company contact details (complete address and P.O. Box). Annual Financial Audit Report. Memorandum of Association (MOA) or Power of Attorney (POA). Emirates ID of the owner/partners holding the license (valid, not expired). It’s crucial to ensure that all documents submitted for corporate tax registration are genuine and clear. Submitting fake or outdated documents may result in fines and legal consequences. Documents required for Corporate Tax Registration for Free Zones The requirements for Corporate Tax registration in the UAE may vary slightly between Mainland and Free Zones/QFZP. Below is the list of documents specifically required for corporate tax registration in UAE for Free Zones and Free Zone Persons: Passport copy of the owner/partners holding the license (valid, not expired). Copy of Trade License (valid, not expired). Lease agreement within the Free Zone. Free Zone company establishment documents. Contact details of the concerned person (mobile number and email). Company contact details (complete address and P.O. Box). Passport copies of the managers or authorized signatories. No Objection Certificate (NOC) from the Free Zone authorities. Annual Financial Audit Report. Memorandum of Association (MOA) or Power of Attorney (POA). Emirates ID of the owner/partners holding the license (valid, not expired).   It’s crucial to emphasize that submitting fraudulent documents can result in corporate tax fines and penalties. Therefore, ensure that all documents provided are authentic and valid. When should you register for Corporate Tax in UAE? The corporate tax registration process has commenced in the UAE, allowing businesses to begin registering with the necessary documents. Regarding the time limit for Corporate Tax registration, the Ministry of Finance has stated that businesses in the UAE will have up to nine months from the end of the relevant tax period to submit their tax return and settle the federal corporate tax. It is imperative for businesses to complete their registration with Corporate Tax (CT) using the required documents within the specified time frame and ensure the payment of the applicable tax amount. Compliance with these regulations is essential to avoid any penalties or repercussions. Corporate Tax Registration Services The UAE Corporate Tax Registration can now be conveniently completed online. With the introduction of the new EmaraTax platform, designed to streamline the taxation process in the country, the Federal Tax Authority (FTA) has made it possible for businesses to register and make payments for corporate tax online. Users can easily create an account on EmaraTax or migrate their existing FTA account by following the VAT Registration Guide provided to access the EmaraTax dashboard. The corporate tax registration process is currently underway on EmaraTax for selected entities and will continue until June 2023. This online platform offers a user-friendly interface for businesses to manage their tax obligations efficiently and securely. Corporate Tax Registration Services in UAE Square International Auditing and Advisory boasts a dedicated team of dynamic Corporate Tax advisors ready to assist your business in navigating potential challenges. These challenges may include unfamiliarity with corporate tax laws and regulations, structural and compliance issues, resource constraints, and the absence of a compliant accounting system. Our comprehensive suite of services includes top-notch Corporate Tax services, accounting services, and audit services. For businesses seeking corporate tax registration services in the UAE, don’t hesitate to reach out to us. Our experienced team is equipped to provide tailored solutions to meet your specific needs and ensure compliance with regulatory requirements. Contact us now to take advantage of our expertise and propel your business forward.

A guide to corporate tax registration in UAE

A guide to corporate tax registration in UAE Square International Auditing and Advisory, a leading corporate tax consultant in UAE, guarantees expert and punctual corporate tax registration services to ensure compliance with the new UAE Corporate Tax regulations. Understanding the corporate tax law and its registration procedures is imperative for every UAE business, and we’re here to guide you through it. As you’re likely aware, the Ministry of Finance in the UAE introduced Corporate Tax in 2022, with full implementation scheduled for June 2023, affecting the financial years of companies and businesses. Consequently, audit firms in Dubai and tax consultants across the UAE have initiated Corporate Tax Advisory and Implementation Services for Businesses. Trust Square International Auditing and Advisory for comprehensive support in navigating the complexities of corporate tax in the UAE. Registration for Corporate Tax in UAE According to FTA’s Federal Decree Law 47, every taxable entity, including Free Zone Persons, is mandated to register for Corporate Tax and obtain a Registration Number. Even those deemed as Exempted Persons are required to register for Corporate Tax as per the Federal Tax Authority’s directive. Taxable entities are obligated to file Corporate Tax returns for each Tax Period within nine months from the end of that period. The deadline encompasses the payment of all Corporate Taxes due for the respective Tax Period when the return is submitted. In cases where entities are excluded, as determined by the Minister, they must still register for Corporate Tax with the Federal Tax Authority within a specified timeframe and in a prescribed format. The Authority necessitates that Taxable Persons or Independent Partnerships register for Corporate Tax and acquire a unique Tax Registration Number. Corporate Tax Registration should occur promptly upon an individual becoming a Taxable Person. Following completion of corporate tax registration, entities are subject to a standard Corporate Tax rate of 9% on taxable income exceeding AED375,000. Taxable income up to AED375,000 incurs a 0% tax rate. How to register For UAE Corporate Tax? The Federal Tax Authority has introduced pre-registration for corporate tax via the EmaraTax platform. This online portal serves as a comprehensive platform for taxpayers to manage all tax-related processes, including registrations, returns, refunds, deregistration, and payments. With the user-friendly EmaraTax portal, individuals can easily create an account or migrate their existing FTA Account. The process is straightforward, allowing users to navigate through the EmaraTax Login guide. Once logged in, users are required to submit all necessary documents for corporate tax in the UAE to complete the registration process successfully. This seamless process streamlines corporate tax registration and ensures compliance with UAE tax regulations. Need for Corporate Tax Registration in UAE The UAE Government, in collaboration with the Ministry of Finance, has established a tax framework and regulations designed to offer advantages to companies subject to corporate tax. For businesses falling under this category, several benefits can be realized: 1.Compliance:By adhering to the tax laws and keeping track of any amendments, businesses ensure they stay compliant with regulatory requirements. 2.Detection of Tax Evasion:Following these regulations aids in identifying and mitigating any fraudulent tax practices, safeguarding the integrity of the tax system. 3.Adherence to International Standards:The tax structure aligns with world-class standards, enhancing the country’s reputation as a reliable and transparent business destination. Corporate tax registration holds significant importance as it helps in minimizing post-tax revenue for companies, thereby maximizing returns to shareholders. This impact extends not only to individuals holding direct shares but also to indirect shareholders through private pensions or investment funds. Moreover, corporate tax payments offer distinct advantages to business owners compared to bearing additional income tax burdens individually. By leveraging these advantages, businesses can optimize their financial strategies and contribute to sustainable growth. Why Corporate Tax Assessment is necessary before Registration? Before implementing corporate tax, it’s crucial to assess the risks and legal factors associated with your business. This assessment ensures compliance with the country’s tax regime. Failing to conduct a proper assessment can result in fines and penalties for corporate tax non-compliance. Pre-implementation assessment involves evaluating the impact, documents, and tax compliance requirements. It’s advisable to seek assistance from professional corporate tax consultants or firms offering high-quality assessment services. Now, let’s delve into Corporate Tax Registration services, which streamline the registration process for maximum efficiency and effectiveness. Corporate Tax Registration Services Square International Auditing and Advisory boasts a team of highly qualified and experienced tax consultants specializing in Corporate Tax registration. Our professionals at SIAA possess extensive expertise in guiding businesses through the registration process with precision and efficiency. We understand the significant changes brought about by the implementation of Corporate Tax and emphasize early preparation for compliance to minimize costs and alleviate stress on your team. With our team’s wealth of knowledge and experience, you can trust us to facilitate a seamless and hassle-free transition. At SIAA, we provide ongoing support and updates on Corporate Tax Registration, ensuring that you remain compliant with regulations and avoid fines and penalties. If you have any inquiries regarding Corporate Tax Registration for your business, feel free to reach out to us . We’re here to assist you every step of the way.

Corporate Tax in UAE

Everything You Need to Know About Corporate Tax In January 2022, the UAE Ministry of Finance announced the introduction of Corporate Tax across the United Arab Emirates. This tax law will take effect from June 1, 2023, impacting businesses based on their financial year. Corporate Income Tax is a direct tax applied to business income. While the UAE joins other nations like the US, India, France, Oman, Kuwait, and Qatar in implementing Corporate Tax, it maintains the lowest rate at 9%. The Federal Tax Authority will oversee the administration, collection, and enforcement of UAE Corporate Tax, while the Ministry of Finance will handle bilateral or multilateral agreements and international tax information exchange. Corporate Tax implementation is expected to bolster the UAE’s economy, improve corporate governance, and drive strategic economic transformation. It aims to solidify the UAE’s status as a global business and investment hub, spur national development, and uphold international tax transparency standards while preventing unauthorized tax practices. What are the businesses or incomes that are not subject to corporate tax? Individual income from employment, real estate, share investments, or other personal sources unrelated to business activities in the UAE. Foreign investors who do not operate businesses within the UAE. Free zone businesses meeting regulatory requirements continue to enjoy corporate tax advantages. Capital gains and dividends earned by UAE businesses from qualifying shareholdings are exempt from tax, excluding certain intragroup transactions and restructurings. Who should pay corporate tax in the UAE? Corporate tax in the UAE is applicable to businesses with a taxable net profit exceeding 375,000 AED. This includes UAE-incorporated or managed and controlled companies, as well as certain entities operating within free zones. Small firms and startups benefit from a 0% corporate tax rate if their net profit remains below 375,000 AED. Certain categories are exempt from Corporate Tax in the UAE: Natural resource extraction enterprises, as they remain subject to existing Emirate-level corporate taxation. Dividends and capital gains derived by a UAE company from its qualifying shareholdings are not subject to Corporate Tax. Qualifying intra-group transactions and reorganizations meeting specific conditions are exempt from Corporate Tax. Salary and other employment income received by individuals, regardless of the source (public or private). Interest and other income from bank accounts or savings plans received by individuals. Income earned by foreign investors from dividends, capital gains, interest, royalties, and other investments. Real estate investments made directly by individuals on their behalf. Individuals receiving dividends, capital gains, and other income from shares or other securities they own personally. Expenses that can be deducted while calculating the corporate tax Certain expenses are added back to accounting income when calculating corporate tax. These expenses, falling under general accounting rules, are not eligible for tax deduction. Here are some examples: Depreciation or amortization expenses related to capital assets. Business setup, license renewal, and other government fees and charges incurred in the course of business operations. Value-added tax (VAT) that cannot be recovered under VAT legislation. 50% of leisure costs incurred for clients. Interest costs on debt funding, limited to 30%. Deductibility of loans to related parties is contingent upon serving a legitimate business purpose. Payments to a mainland branch of a Free Zone entity may be deductible. Expenses that cannot be deducted while calculating the corporate tax Certain expenses are not deductible when calculating corporate tax in the UAE. These restrictions aim to prevent abuse or excessive deductions, ensuring that only necessary expenditures for generating taxable income are eligible for relief. Here are the expenses that cannot be deducted from a taxable person’s taxable income accrued during a taxable period: Expenses not incurred in the course of the taxable person’s business. Expenses incurred to earn exempt income. Losses not directly related to or incurred as a consequence of the taxable person’s business activities. Additional spending authorized by a Cabinet decision following a minister’s recommendation. Businesses operating in the UAE must maintain accurate financial records to ensure compliance with corporate tax regulations. These records should elucidate the information disclosed in the corporate tax return and must be submitted to the Federal Tax Authority (FTA). Even entities exempt from UAE corporate tax must maintain records for the FTA to verify their exempt status. For corporate tax registration in the UAE, businesses need to furnish certain documents, including: Copies of valid trade licenses. Photocopies of passports of license owners/partners (valid). Emirates ID cards of license owners/partners (valid). Power of Attorney (or Memorandum of Association). Contact information (mobile number and email). Company contact details (address and P.O. Box). Annual financial audit report.   Under UAE corporate tax regulations, a group of companies can elect to form a tax group, treated as a single taxable entity, if specific criteria are met. A tax group only needs to file a single tax return for the entire group. Additionally, foreign investors can offset foreign corporate tax paid on UAE taxable income against their UAE corporate tax liability. Corporate tax filings are conducted annually, with no provisions for advance tax filing under the UAE corporate tax regime. Returns must be filed electronically, as per the Ministry of Finance, and no advance tax payments are required. Furthermore, excess tax losses can be carried forward and applied against future taxable income, subject to certain conditions. This provision extends to tax groups, allowing tax losses from one company to offset taxable income from another within the group. How can SIAA help? Square International Auditing & Advisory  is a well-known accounting & audit firm in Dubai,UAE that prides itself on offering individual services to its clients. We offers high-quality services: Accounting and Book-keeping Auditing and Assurance Services Tax/Corporate Tax Services VAT Services Business Consultancy Banking Consultancy Business Setup Support Software Support   We constantly ready to help clients with their financial concerns, such as compliance requirements, auditing requirements, bookkeeping, and so on. So, if you want to learn more about Square International, contact us.