The United Arab Emirates significantly changed its tax regime with the promulgation of the Corporate Tax Law, effective on June 1st, 2023. The said law would apply to all business entities operating within the UAE either on the mainland, in a free zone, or even offshore entities. Foreign entities having a presence in the UAE will also be liable under the Corporate Tax Law if they fall under certain criteria.
While the Corporate Tax introduces a new tax element to some businesses, it is important to note that some are exempted, and there are relief measures. Most importantly, the law has relief for small businesses and qualified free zone entities upon specified conditions. Even if your business is exempt from paying corporate tax, you must still register with the Federal Tax Authority.
Understanding the Difference between Corporate Tax and VAT Registration
It is important to note the difference between Corporate Tax registration and VAT registration, though both are handled by the FTA. Businesses that are already registered for VAT purposes under the existing UAE tax framework will need to register for CT separately. Just because one is already registered for VAT does not mean one is also registered for Corporate Tax.
Upcoming Deadlines for Corporate Tax Registration
Corporate Tax registration deadlines are just around the corner. Deadlines will be determined according to the date of issue of your business’s trade license. Deadlines can be explained in detail as follows:
| Month of license issuance | Deadline |
| January or February | May 31 |
| March or April | June 30 |
| May | July 31 |
| June | August 31 |
| July | September 30 |
| August or September | October 31 |
| October or November | November 30 |
| December | December 31 |
Registration deadlines are determined by the issue date of your business trade license. The FTA decision provides that in the event of a juridical person not holding a license by 1st March 2024, it shall submit an application to register within three months—that is, 31st May 2024.
Corporate Tax Registration Process: A Step-by-Step Guide
The process of registration of Corporate Tax with FTA is quite seamless. FTA allows online registration from the portal itself; hence, it is easy for most businesses. Here is the step-by-step breakdown of the registration process:
Step 1: FTA Portal Log In
First, log in to the FTA official website, and click on CT registration.
Step 2: Account Registration
For a business already registered for either VAT or Excise Tax, log in with existing FTA account credentials. If the business is new, an account needs to be created with details such as e-mail addresses and phone numbers.
Step 3: Initiate Corporate Tax Registration Request
Log in and access the CT registration section, then start the registration process.
Step 4: Business Information
This will necessitate details of your business to be filled in the registration form. Such information includes:
- Legal name and Trade name
- Trade License no. and date of issuance
- Business activity and legal form
- Contact information, including a contact person
- Ownership structure, including shareholders’ or beneficial owners’ details.
Step 5: Financial Information
Depending on the structure of your business and your financial activity, you may need to file some additional financial information.
Step 6: Review and Submit
The information provided within the registration form has to be checked in detail before sending it to the FTA.
Step 7: Then wait to get approved
Having filed the request for registration, it will be reviewed by the FTA. On successful registration, you will get a confirmation letter with your CT registration number.
Things to Consider When Registering for Corporate Tax (CT)
While the application procedure is quite easy to use, there are some points that a firm should consider in the online application process:
- Detailed information: The registration form calls for detailed information concerning the business. All the necessary documents and information should be prepared to avoid delay.
- Clarifications and Possible Obstacles: For some reason, the FTA will sometimes call for clarification or more details at the time of registration. This may delay the process in case you are not well prepared to respond to their inquiries in time.
- Technical Issues: Due to the online portal, there may be a chance of technical glitches. Having a backup plan in place and seeking advice from tax consultants can help reduce any delay caused or wastage of time.
Benefits of Professional Assistance
Though the process of registration may be user-friendly, the Corporate Tax law need not be. Some reasons for seeking professional help from tax advisors may include the following:
- Understand Your Tax Liability: Tax professionals will help you to work out your tax liabilities under the new Corporate Tax law, considering any exemptions or reliefs that may apply to your particular business circumstances.
- New Legal Framework Negotiation: The new Corporate Tax law institutes new terminology and new regulations. With the help of a tax adviser, it would be easy to understand the legal framework that applies and make sure your business works compliantly.
- Avoiding Penalties: Missing deadlines, and having wrong details while registering might cost any business needless penalties. Tax advisors can save you from that.
- Long-term Compliance: Corporate Tax is a relatively new addition to the UAE taxation landscape. Tax experts can help with long-term support in maintaining your business on the right course with further regulations and updates.
Conclusion
There is a requirement that you register your business for corporate tax with the FTA, and it is of utmost importance that you act before any penalties get levied. Professional tax advisory is therefore more or less essential to guide businesses about the intricacies of the New Corporate Tax Law and manage them in a seamless and compliant manner within the UAE tax regime.
Don’t miss the deadline! Ensure timely CT registration with Farahat & Co.
The UAE Corporate Tax deadlines are almost here. Avoid the penalties and smoothly comply through expert guidance by Farahat & Co. Our team will perfectly and efficiently handle the whole registration process. Contact Farahat & Co. today to discuss your Corporate Tax registration needs.
