The Federal Tax Authority (FTA) calls upon all natural persons to apply for Corporate Tax Registration relating to the corporate tax in the UAE. Such registration is to be made on or before 31st March 2025, failing which one will be liable to Administrative Penalties.
This article aims at discussing how one can get registered for Corporate Tax, who has to register, what the penalties are if one does not comply, and how Farahat & Co. can assist with corporate tax registration in the UAE.
What is the Corporate Tax Registration Deadline?
FTA declared that all natural persons subject to Corporate Tax should be registered by 31st March 2025 at the latest.
The FTA has previously published a guide on the Registration of Natural Persons (CTGRNP1) with the view of increasing the public’s knowledge on the registration requirements for natural persons in relation to Corporate Tax.
Failure to meet this deadline has consequences of administrative penalties. The FTA has provided guidelines to assist you in understanding the registration process and timelines to ensure compliance.
Who Needs to Register?
The FTA has invited applications for corporate tax registration from all natural persons liable to corporate tax. A “natural person” is a living human being, of whatever age, who is resident in the UAE or elsewhere.
Corporate tax would apply only to a natural person carrying on a business or otherwise carrying on a business in the UAE. This comprises:
- sole establishments and
- Individual partners in Unincorporated Partnerships that conduct a Business or Business Activity in the UAE.
First Tax Period for Natural Persons
The FTA guide explains that the first potential tax period for a natural person carrying on business or business activity starts during the Gregorian calendar year 2024.
This means that in case of any business activities carried out by a natural person in 2024, they may be deemed to be subject to Corporate Tax starting from this period.
Registration Requirements for Natural Persons
The FTA has urged that, among others, all natural persons carrying on business or business activities in the UAE would be obliged to be registered under Corporate Tax.
- Threshold: A person will be regarded as a Taxable Person if their (natural person’s) aggregate supplies of all business activities exceed AED 1 million in a calendar year.
- Deadline: They shall be required to register for Corporate Tax, not later than 31st March of the calendar year following the year in which they have exceeded AED 1 million in turnover.
- Compliance: The taxable persons are supposed to meet all the Corporate Tax requirements, which include filing and paying the taxes on time.
For example, if a natural person carries on any business or any activity of a business carried on in the UAE in the 2024 calendar year, and the revenues of such a person exceeded AED1 million as of 31st July 2024, such a person must file an application to register for Corporate Tax no later than 31st March 2025, and consequently, file a Corporate Tax Return no later than 30th September 2025.
How to Register for Corporate Tax in the UAE
The process for registration is very simple and easy. The main steps involved are:
- Account Creation on EmaraTax Portal: One can have basic access with your email ID and phone number to create an account on the EmaraTax portal. If the user already exists, log in with your details.
- Type of Entity: Here, you need to select the type of the entity going to get registered (e.g., natural person, legal person)
- Business Information: You need to get your business registered with your regulatory regime. You must attach the documents which prove the issuance of trade license and financial statement of the firm.
- Activities of Business and Owners: You need to fill in all the activities of your business and owners’ details.
- Fill in the Application Form Online : Fill all the relevant details as provided in the application form correctly.
- Attach Documents: You need to upload the required documents which might include the trade license, Emirates ID or passport, and the proof of the authority of the authorized signatory.
- Review and Declaration: Go through all the above details and submit the declaration.
- Receipt of TRN: Once your application gets approved, you will get your TRN.
Other Considerations
- Register in Advance: If your business’ expected turnover is more than AED 1 million, it is advisable to register in advance to avoid penalties.
- Seek Professional Help: It is always advisable to consult with a registered tax agent or advisor to assist with the registration process and future compliance.
- Keep updated: It is advisable to visit the official website of FTA more frequently to get updated information, resources, and regulatory updates.
If these steps are followed then Corporate Tax can be successfully registered in the UAE. In case of further assistance Farahat & Co. can be contacted as your partner to accomplish the procedure smoothly and manage all Corporate Tax compliances.
Penalties for Non-Compliance
If a natural person who is to register for Corporate Tax, does not submit a Tax Registration application by the due date, the person will be liable to an Administrative Penalty of AED10,000.
Sometimes, the penalties can be really harsh and may harm your business operations. It is, therefore, very important to make sure that you comply with the requirements for registration to avoid such penalties and also to be in good books with the FTA.
How FAR Consulting Middle East Can Assist.
FAR Consulting Middle East can assist you in the preparation of your Corporate Tax. The scope of our tax consultants’ involvement in helping natural persons in filing Corporate Tax includes the following:
- First Consultation: They first check whether your business activities fall within the Corporate Tax registration threshold.
- Registration Service: They help in registering Corporate Tax on the EmaraTax portal, along with all the documentation in regard to that.
- Tax Planning: They provide you with tax planning to help you keep your tax dues under control.
- Return Preparations: They also prepare and file your corporate tax returns with the authorities so that you are technically compliant.
- Record Keeping: They also help you in the accounting of proper books that are necessary for the purpose of law.
- Compliance Support: They give assurance to the taxpayer regarding ongoing support and confidence to continue with their Corporate Tax obligation.
For any inquiry as to how FAR Consulting Middle East can help your business with its Corporate Tax filing, please do not hesitate to contact us today.
Do not wait for the last day. Take the first step today to make sure that you are on track to meet the deadline of 31st March 2025 without incurring any penalties. We at FAR Consulting Middle East can help you with Corporate Tax registration and filing.
