UAE Corporate Tax Registration Mandatory for Medium and Small Enterprises, Even with Losses


As the UAE embarks on its first full-year corporate tax period, a crucial revelation demands the immediate attention of medium and small business owners. Contrary to some misconceptions, the latest news mandates the corporate tax registration, a requirement applicable to both profit-making and loss-incurred enterprises.

Corporate Tax in UAE is a direct tax imposed on the net income or profit of corporations and businesses introduced by the UAE Ministry of Finance. This tax reform is designed to support medium and small enterprises by instituting an initial statutory tax rate of 9% on corporate profits exceeding AED 375,000. It is obligatory to comply with the corporate tax regulations for all eligible Taxable Persons in the UAE. This involves corporate tax registration, filing annual tax returns, and maintaining accurate accounting records.

Moreover, the introduction of corporate tax in UAE is to meet the international tax standards.

Corporate Tax Registration: A Non-Negotiable Step in 2024

The Federal Tax Authority has left no room for ambiguity – all businesses operating in the UAE are obligated to register for corporate tax in 2024. This directive extends to enterprises, irrespective of their profitability or the duration of their establishment. Even businesses incurring losses are not exempt from this mandatory registration.

Despite lingering doubts among some SME owners about the urgency of corporate tax registration, experts emphasize its immediate necessity. Waiting until profits approach the Dh375,000 profit mark is a misconception that could lead to non-compliance.

Small Business Relief: A Lifeline for Eligible Entities

To address concerns, the authorities have introduced the ‘Small Business Relief’ option. Eligible taxable persons, especially those with revenues below or equal to Dh3 million, can elect for this relief on their tax return. However, even if a business qualifies for relief, the fundamental requirement remains unchanged – registration for corporate tax is mandatory.

Key Points about Small Business Relief

  • Eligibility is determined by business revenue below or equal to Dh3 million for the latest and all previous tax periods.
  • Once revenue exceeds Dh3 million, the business is ineligible for the relief package, even if subsequent revenues fall below the threshold.
  • Despite relief, businesses must register for corporate tax, emphasizing the mandatory nature of registration for all.

Essential Considerations for Corporate Tax Compliance

As the registration process opened in June last year, businesses following the calendar year as their financial year will be paying their 2024 corporate tax by September 2025. It’s crucial for businesses to prove eligibility by submitting tax returns and maintaining necessary records.

The application of UAE Corporate Tax extends to all businesses “incorporated, effectively managed and controlled” in the UAE. Regardless of profit or revenue, registration is a non-negotiable step.

Comparing VAT and Corporate Tax

Drawing a comparison with VAT requirements, the threshold for corporate tax registration is mandatory, aligning with the ethos of a proactive approach. Even new businesses setting up in the UAE are advised to register for corporate tax immediately.

In conclusion, navigating the corporate tax landscape is essential for businesses in the UAE. The Alliance Prime team recommends the use of accounting software as part of best practices.

Stay informed, stay compliant. Act now to register for corporate tax and ensure the smooth operation of your business in accordance with the latest regulations.


Why is Alliance Prime the best Tax Consultancy in Dubai?

Alliance Prime is a leading provider of auditing, accounting, taxation, and advisory services in the UAE. Our expert team will guide you through the complex laws and regulations of UAE, including Corporate Tax, VAT, Excise Tax, Accounting and Bookkeeping, ESR, Financial Advisory, ERP, etc. We stay up-to-date with the latest changes in laws and regulations in the UAE. If you’re looking for reliable and professional auditing, accounting, taxation, and advisory services in the UAE, look no further than Alliance Prime. 

Contact Alliance Prime on +971 58 825 7795 or Email us at:- contact@alliance-acc.com  for expert assistance in Corporate Tax Registration.

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