corporate tax registration Archives

Corporate Tax Registration Deadlines for Free Zone in the UAE

Posted on October 10, 2025 by admin

The introduction of corporate tax in the UAE marks a transformative shift in the country’s taxation policies. While the UAE has traditionally been a tax-friendly environment for businesses, the introduction of corporate tax is a step toward aligning with global tax frameworks. As such, Free Zone businesses need to be well-versed in the new tax regime, particularly regarding corporate tax registration deadlines. Compliance with these deadlines is crucial to avoid penalties and ensure smooth operations.

This comprehensive guide will walk you through the corporate tax registration process for Free Zones in the UAE, the specific deadlines you need to keep in mind, and what happens if you miss these deadlines. For expert assistance, Alliance Accounting offers reliable and professional services to help businesses stay compliant and up-to-date with corporate tax requirements in the UAE.

Overview of Corporate Tax in the UAE

The UAE government introduced a federal corporate tax as part of its broader plan to diversify revenue streams and promote compliance with international tax standards, such as the OECD’s Base Erosion and Profit Shifting (BEPS) initiative. The corporate tax applies to most business activities and is designed to reduce reliance on oil revenues while ensuring the country’s fiscal sustainability.

Key Features of the UAE Corporate Tax Law

Standard Corporate Tax Rate: Businesses with taxable income above AED 375,000 will be subject to a 9% corporate tax rate. This makes UAE one of the more competitive countries globally regarding corporate tax rates.
Tax Exemption for Small Businesses: Businesses with taxable profits up to AED 375,000 are exempt from corporate tax, allowing smaller enterprises to continue benefiting from the tax-free environment.
Special Provisions for Free Zones: Free Zone entities can benefit from a 0% corporate tax rate on qualifying income, provided they meet specific criteria. However, they are still required to register for corporate tax and file returns.

The introduction of corporate tax does not mean the end of the UAE’s tax advantages, especially for Free Zone companies. However, understanding the eligibility criteria, taxable income, and applicable deadlines is vital.

What Is a Free Zone?

Free Zones in the UAE are designated areas established to encourage foreign investment by offering tax incentives, simplified business regulations, and enhanced operational benefits. Businesses that operate in these zones benefit from favorable tax treatment and other advantages that help boost international trade and commerce.

Key Benefits of Free Zones:

100% Foreign Ownership: Unlike mainland businesses, Free Zone entities can be wholly owned by foreign investors without the need for a local sponsor.
Exemption from Customs Duties: Businesses operating within Free Zones are typically exempt from customs duties on imports and exports, making it cost-effective for trading companies.
No Personal or Export Taxes: Employees working in Free Zones benefit from no personal income tax, and companies have no tax on exports.
Strategic Locations: Free Zones are located in key economic hubs, providing businesses access to top-tier infrastructure, transportation, and logistics facilities.

However, under the new UAE corporate tax law, Free Zone entities must register for corporate tax, even if they expect to benefit from a 0% corporate tax rate. The registration process and filing deadlines are essential to ensure compliance and avoid penalties.

Corporate Tax for Free Zones: What You Need to Know

Although Free Zone businesses may qualify for a 0% corporate tax rate on qualifying income, they are still obligated to register for corporate tax and maintain compliance with the regulations established by the Federal Tax Authority (FTA).

What Qualifies as Free Zone Income?

Free Zone businesses can benefit from a 0% corporate tax rate on “qualifying income,” which is income derived from specific activities within the Free Zone or transactions with other Free Zone businesses and non-residents. To ensure their income qualifies, businesses must adhere to the guidelines provided by the FTA.

Examples of Qualifying Income:

Income generated from business activities within the Free Zone: This includes trading, manufacturing, or providing services to other Free Zone companies.
Income from transactions with other Free Zone entities: Business dealings with other companies operating within Free Zones also fall under qualifying income.
Income from transactions with non-UAE residents: If a Free Zone entity engages in international business with clients or companies outside the UAE, this income may also qualify for the 0% corporate tax rate.

Non-Qualifying Income

Not all income generated by Free Zone companies qualifies for the 0% tax rate. Income derived from business activities with mainland UAE companies or income from non-qualifying activities within the Free Zone may be subject to the standard 9% corporate tax rate.

Examples of Non-Qualifying Income:

Income from mainland UAE: Any transactions or business activities conducted with mainland UAE entities, even by Free Zone companies, may be subject to the 9% corporate tax rate.
Income from non-permissible activities: Activities that fall outside the permitted scope of the Free Zone’s allowed business operations may also be taxed at the standard rate.

Careful record-keeping and understanding of what constitutes qualifying and non-qualifying income are crucial to ensure that businesses maximize the benefits of operating within a Free Zone.

Corporate Tax Registration Deadlines for Free Zones in the UAE

Free Zone businesses are required to register for corporate tax regardless of whether they are eligible for the 0% corporate tax rate. Failure to meet registration deadlines can result in penalties, even for companies that have no corporate tax liability.

Important Corporate Tax Registration Deadlines:

Initial Registration Deadline: The UAE’s Federal Tax Authority (FTA) has made it mandatory for businesses to register for corporate tax well before their first tax filing. Deadlines for registration will vary based on the business’s financial year, but it is advisable for businesses to register as early as possible.
Corporate Tax Return Filing Deadline: Once registered, Free Zone businesses must file their corporate tax return within nine months following the end of their relevant financial year. This applies even if the business qualifies for the 0% corporate tax rate.

Example Deadlines for Common Financial Years:

For financial years starting January 1 and ending December 31: The first corporate tax return must be filed by September 30, 2024.
For financial years starting July 1 and ending June 30: The first corporate tax return must be filed by March 31, 2025.
For financial years starting April 1 and ending March 31: The first corporate tax return must be filed by December 31, 2024.

Each business should verify its financial year with the FTA and confirm the corresponding registration and filing deadlines to avoid penalties.

Steps to Register for Corporate Tax in the UAE Free Zones

The registration process for corporate tax in the UAE is straightforward but requires attention to detail to ensure compliance. Below are the general steps Free Zone businesses should follow:

1. Access the FTA e-Services Portal

Create an account on the Federal Tax Authority (FTA) e-Services portal. The portal allows businesses to manage their tax registration, filings, and payments online.

2. Provide Business Information

Submit key details about your business, such as trade license number, Free Zone registration certificate, financial year, and corporate structure. The FTA may request additional documentation to verify the business’s eligibility for the 0% tax rate.

3. Receive Corporate Tax Registration Number (CTRN)

Once the registration is submitted and approved, the FTA will issue a Corporate Tax Registration Number (CTRN), which must be used in all subsequent filings.

4. Maintain Records and Ensure Compliance

Free Zone businesses must maintain detailed records of financial transactions and business activities to ensure compliance with the FTA’s corporate tax rules.

Businesses may find it beneficial to consult with professionals, such as Alliance Accounting, who can assist with the registration process and ensure timely compliance with the relevant deadlines.

Penalties for Missing Corporate Tax Registration Deadlines

Failure to register for corporate tax or missing filing deadlines can result in significant penalties. It is essential for Free Zone businesses to adhere to the deadlines to avoid unnecessary fines, even if they are not subject to corporate tax payments due to qualifying income.

Possible Penalties:

Late registration fines: Businesses that fail to register within the stipulated timeframe may face administrative penalties.
Late filing fines: Failing to file the corporate tax return within nine months of the financial year’s end can result in fines.
Penalties for inaccurate filings: Submitting incorrect or incomplete information in the corporate tax return can also lead to penalties.

To avoid these penalties, businesses should ensure they meet all registration and filing deadlines, and where necessary, seek professional advice from experts like Alliance Accounting.

How Alliance Accounting Can Help Free Zone Businesses

The complexities of the UAE’s new corporate tax regime can be overwhelming for businesses, especially for those operating within Free Zones. Alliance Accounting offers comprehensive tax advisory and compliance services to ensure that businesses meet all corporate tax obligations and deadlines.

Services Offered by Alliance Accounting:

Corporate Tax Registration: Assisting businesses with corporate tax registration on the FTA portal, ensuring timely and accurate submissions.
Tax Advisory: Providing guidance on qualifying and non-qualifying income for Free Zone businesses to help maximize tax benefits.
Tax Filing: Assisting with the preparation and filing of corporate tax returns, ensuring compliance with FTA regulations.
Penalty Avoidance: Ensuring that businesses meet all deadlines and avoid penalties through proactive tax management strategies.

With Alliance Accounting, Free Zone businesses can focus on growing their operations while remaining fully compliant with UAE tax laws.

Conclusion

Understanding the corporate tax registration deadlines and filing requirements for Free Zone businesses in the UAE is critical to maintaining compliance and avoiding penalties. Free Zones continue to offer significant benefits, including the possibility of a 0% corporate tax rate on qualifying income. However, businesses must still register for corporate tax and adhere to the relevant filing deadlines.

By working with experts such as Alliance Accounting, Free Zone businesses can navigate the complexities of corporate tax regulations and ensure smooth compliance with the UAE’s new tax regime.

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

Posted on January 8, 2024 by admin

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.

Who is eligible for the Small Business Relief Regime in UAE?

Posted on August 4, 2023 by admin

The UAE Corporate Tax Law (CTL) has introduced the Small Business Relief Regime (SBRR) under Art. 21, offering a tax benefit to resident taxable persons subject to specific conditions. The Ministry of Finance recently issued Ministerial Decision No. 73 of 2023 on Small Business Relief to support start-ups and small businesses with limited resources in meeting corporate tax compliance requirements.

Does the ministry mean no taxes will be paid?

Any UAE resident taxable person with revenues below the Dh3 million threshold and meeting other conditions can claim the Small Business Relief by electing not to derive any “taxable income” during the relevant tax period. This means that revenue earned below the threshold will not be subject to corporate tax as it will not be considered “taxable income.”

What about qualifying businesses earning Dh375,000 or more?

The Small Business Relief is different from the 0% corporate tax rate applicable to “taxable income.” If a taxable person’s revenues exceed Dh3 million, they won’t qualify for the Small Business Relief. However, their taxable income up to Dh375,000 will be subject to a 0% tax rate, while any income above this threshold will face a 9% corporate tax rate.

What if companies don’t take advantage of this Small Business Relief Regime?

Claiming the Small Business Relief restricts certain reliefs and deductions for the relevant tax period. For some unprofitable UAE resident taxable persons after 1 June 2023, it may be advantageous not to claim the relief. This allows them to carry forward tax losses and disallowed net interest expenses for use in future tax periods when the relief is not chosen or available.

Conditions for eligibility for Small Business Relief Regime

Three million Dirhams revenues threshold: Resident taxable persons with revenue below AED 3 million in the relevant and previous tax periods can claim SBRR based on applicable accounting standards (e.g., IFRS).
Not a Qualifying Free Zone Person: Those defined as a Qualifying Free Zone Person under Art. 18 of CTL are ineligible for the relief.
Not a member of a big Multinational Enterprises Group: Members of big multinational groups with consolidated group revenue exceeding AED three billion are not eligible for SBRR, even if their UAE business units have revenues below the three million thresholds.

At Alliance Prime, our team of experts can assist you in understanding and optimizing the benefits of the Small Business Relief Regime. We provide comprehensive accounting and tax consultancy services to help your business thrive in the UAE’s evolving tax landscape.

Why is Alliance Prime the best Tax Consultancy in Dubai?

To find out if your business is eligible for Small Business Relief under the new CT regime or to Book a Free Consultation, contact us on: at- +971 58 825 7795 or Email us at:- contact@alliance-acc.com

What is Qualifying Income in UAE Corporate Tax?

Posted on August 1, 2023 by admin

With the implementation of Corporate Tax in the UAE from 1st June, businesses need to be aware of the different regulations, especially for UAE Free Zones. Alliance Prime Accounting & Tax Consultancy aims to provide clarity on Corporate Tax in Free Zones and the concept of Qualifying Income for Free Zone individuals.

Corporate Tax in Free Zones and Qualifying Income

Free Zone businesses can benefit from a 0% corporate tax rate, but they must meet specific criteria to qualify as a Qualifying Free Zone Person (QFZP). To be eligible as a QFZP, certain conditions from the federal decree law of corporate tax must be met, including generating revenue that falls under the category of Qualifying Income.

Qualifying Income – Definition and Determination

Qualifying Income refers to any income earned by a Qualifying Free Zone Person subject to a 0% Corporate Tax Rate. This income is derived from qualifying business activities or transactions conducted within the Qualifying Free Zone.

Criteria for Determining Qualifying Income

As per Cabinet Decision No. 55 of 2023, the following criteria determine the Qualifying Income for a Qualifying Free Zone Person:

Income from transactions with other Free Zone Persons, excluding income from excluded activities.
Income from transactions with Non-Free Zone individuals, limited to qualifying activities that are not excluded activities.
Other income, where the Qualifying Free Zone individual fulfills the De Minimis requirements.
Income from transactions with a Free Zone Person where that person is the Beneficial Recipient of the relevant services or goods.
Understanding Beneficial Recipient
A Beneficial Recipient is a person who has the right to use and enjoy the services or goods without any contractual or legal obligation to pass them on to another person.

Qualifying Income for Domestic or Foreign Permanent Establishments

Payable income to a Domestic or Foreign Permanent Establishment of a Qualifying Free Zone individual is considered taxable income and is subject to a 9% corporate tax rate for the Free Zone business.

Qualifying Income for Immovable Property located in a Free Zone

Income payable from transactions with Non-Free Zone Persons regarding Commercial Property or immovable property (not commercial) with any individual is considered taxable income and taxed accordingly.

De Minimis Requirements

De Minimis requirements are fulfilled when the non-qualifying revenue obtained by the Qualifying Free Zone Person in a tax period does not exceed the total Revenue Percentage or the amount specified by the Minister, whichever is lower. Certain revenues are not included in the calculation of non-qualifying revenue and total revenue.

Corporate Tax Services for Free Zones

Alliance Prime Accounting & Tax Consultancy is a leading tax consulting firm in Dubai with extensive knowledge of Corporate Tax Law. Our FTA approved Corporate Tax consultants offer comprehensive corporate tax solutions for Free Zones, including determining qualifying income and ensuring compliance with regulations to qualify as a QFZP for 0% corporate tax in the UAE.

Our Corporate Tax Services include:

Corporate Tax Impact Assessment
Corporate Tax Registration
Corporate Tax Return Filing
Corporate Tax Accounting
Corporate Tax Audit
Corporate Tax Compliance
Corporate Tax Advisory
Corporate Tax Transfer Pricing

Any queries related to Corporate Tax in Free Zones, reach out to Alliance Prime Accounting & Tax Consultancy for expert assistance.

Why is Alliance Prime the best Tax Consultancy in Dubai?

If you would like additional information or clarity on Corporate Tax or require assistance to Register for Corporate Tax, and its impact assessment, visit localhost/alliance-acc/ or contact us at- +971 58 825 7795 or Email us at:- contact@alliance-acc.com

The Significance of Corporate Tax Registration in the UAE

Posted on July 31, 2023 by admin

The Significance of Corporate Tax Registration and Accurate Financial Records in the UAE

Registering for corporate tax and maintaining accurate financial records are vital steps for corporate entities in the UAE to ensure compliance with tax regulations. These processes play a crucial role in facilitating the filing of tax returns and demonstrating adherence to tax laws. This article highlights the importance of precise financial record-keeping for corporate tax purposes in the UAE.

Online Corporate Tax Registration

The UAE has streamlined the corporate tax registration process by introducing EmaraTax, an online platform provided by the Federal Tax Authority. EmaraTax enables businesses to conveniently register for corporate tax and make tax payments. This user-friendly and efficient online registration system simplifies corporate tax compliance for businesses in the UAE.

Essential Requirements for Corporate Tax Registration

Registration is a mandatory step for all corporate entities in the UAE to take advantage of tax benefits and comply with tax regulations. Accurate and comprehensive financial records are indispensable for filing corporate tax returns and demonstrating compliance with tax laws. Timely registration is crucial as failure to do so within the specified time frame may lead to penalties and legal consequences.

Exemptions to Corporate Tax Registration

While generally mandated for all taxable individuals and entities, both residents and non-residents, Corporate Tax registration can be exempted in certain cases, as specified by Ministerial Decision No (7) of 2023 and (43) of 2023. The following entities are excluded from the registration under corporate tax:

Government Entities
Government Controlled Entities
Individuals engaged in Extractive Businesses (subject to specific conditions)
Individuals engaged in Non-Extractive Natural Resource Businesses (subject to specific conditions)
With State-Sourced Income Non-Resident Persons without Permanent Establishment in the UAE

Entities Required to Register

Furthermore, the UAE’s Corporate Tax Law and Withholding Tax provisions establish a comprehensive framework that provides clarity and certainty to companies operating within the region. These tax reforms serve as catalysts for stimulating economic growth, ensuring stability, attracting international investments, and facilitating the realization of strategic objectives.

Resident Legal Entities Incorporated in UAE
Legal Entities Incorporated in Free Zone UAE
Entities Established in Other Countries but Controlled and managed in UAE
Natural individuals conducting business activities within the UAE may also be classified as residents.

Conversely, a Non-Resident Person refers to individuals or entities that fail to meet the residency criteria but possess a Permanent Establishment (PE) in the UAE or generate income from the UAE. Satisfaction of given conditions is necessary for non-resident entities having UAE Permanent Establishment regarding taxable income. However, specific types of UAE-sourced income not associated with a PE may be subject to a 0% withholding tax.

Maintaining Compliance with Laws and Regulations

Accurate financial records are crucial for complying with UAE tax authorities’ laws and regulations applicable to individuals and entities liable for taxation. Registering for corporate tax with the relevant authority, ensuring timely submission, and obtaining a unique Tax Registration Number are essential steps in fulfilling taxation obligations. Proper record-keeping substantiates the information provided in corporate tax returns and avoids fines, penalties, and legal consequences.

Accurate Tax Calculations

Precise financial records enable businesses to accurately calculate taxes in accordance with UAE corporate tax regulations. Ensuring accurate calculations is essential to avoid both overpayment and underpayment of taxes, which can have serious consequences for businesses, including unnecessary financial losses, penalties, fines, and audits.

Promoting Business Transparency

Transparent financial record-keeping fosters openness in business operations. It provides a clear and complete outline of a company’s banking transactions, sources of income, costs, investments, and other activities. Transparent financial reporting enhances stakeholders’ confidence, including investors, lenders, and regulators, facilitating better business connections and opportunities.

Enhancing Decision-Making

Accurate financial records provide valuable insights into a company’s financial performance, enabling informed decision-making. Businesses can use this data to assess the feasibility of new projects, identify areas of financial inefficiency that require improvement, and forecast future financial performance. Reliable financial information facilitates strategic planning and ensures that decisions are based on sound financial data.

Streamlined Corporate Tax Returns Filing

Businesses in the UAE are required to file a single tax return with supporting schedules for each tax period with the Federal Tax Authority (FTA). Unlike some jurisdictions, UAE businesses are exempt from filing provisional tax returns or paying advance taxes, reducing administrative burdens on taxpayers.

In conclusion, corporate tax registration and accurate financial records are crucial for businesses in the UAE to comply with tax regulations. These records not only aid in calculating taxable income correctly but also promote transparency in business operations. Timely registration and meticulous record-keeping are essential for businesses to avoid penalties and demonstrate compliance with tax laws.

Why is Alliance Prime the best Tax Consultancy in Dubai?

UAE Corporate tax relief for small businesses in United Arab Emirates

Posted on July 26, 2023 by admin

The Ministry of Finance has taken a significant step towards supporting small businesses in the UAE with Ministerial Decision No. 73 of 2023 on Small Business Relief for Corporate Tax.

Small Business Relief aims to ease the burden on startups, small, and micro-enterprises by reducing their Corporate Tax and compliance costs. The decision outlines the revenue threshold and conditions for eligible businesses to avail the relief and also clarifies provisions related to carried forward Tax Losses and disallowed Net Interest Expenditure under this scheme.

Here’s what you need to know about Small Business Relief:

Eligibility and Revenue Thresholds

The Ministerial Decision establishes that businesses and individuals that generate an annual revenue below AED3 million will qualify for the small business relief exemption. The relief will be available for financial years beginning on or after 1 June 2023 until 31 December 2026. This applies if their revenue in the relevant tax period and previous tax periods is below AED3 million for each such tax period. Once the revenue threshold is exceeded, the small business relief will no longer be available.

Businesses that are eligible for relief but do not elect to apply for it will have the option to carry forward incurred tax losses and can disallow net interest expenditure from such tax periods. The Ministerial Decision expands on the relief already contained in the Corporate Tax Law, which applies to businesses with annual profits of less than AED375,000. Where this relief is applied, there is also no ability to carry forward losses.

Effective Period

The AED 3 million revenue threshold will apply to tax periods starting from 1st June 2023 and will continue until tax periods ending on or before 31st December 2026. In addition to meeting the above-mentioned threshold, other conditions must be fulfilled in order to be eligible for small business relief.

Exclusions

Small Business Relief won’t be available for Qualifying Free Zone Persons or members of Multinational Enterprises Groups (MNE Groups) with consolidated group revenues exceeding AED 3.15 billion.

Tax Losses and Net Interest Expenditure: Businesses not opting for Small Business Relief in specific tax periods can carry forward any incurred Tax Losses and disallowed Net Interest Expenditure for use in future tax periods without the relief.

Businesses Precluded

Small business relief is solely available to UAE entities who are a Resident Person and are not one of the following:

a constituent company of a multinational enterprises group (groups of companies with operations in more than one country with a consolidated revenue exceeding AED3.15 billion); and
a qualifying free zone person, (i.e. a legal person incorporated, established, or otherwise registered in a free zone).

Anti-Abuse Rules

The decision warns against artificial separation of business activities to claim Small Business Relief while exceeding the revenue threshold. Such arrangements may fall under the general anti-abuse rules of the Corporate Tax Law. Where a taxable person who has artificially separated their business, or business activity and the total revenue exceeds AED3 million in any tax period, and such person has elected to apply for small business relief, this would be considered an arrangement to obtain a corporate tax advantage under Clause (1) of Article 50 regarding the general anti-abuse rules of the Corporate Tax Law and may be set aside.

Burden is on the Business

Regardless of whether the relief is claimed, small business entities may be under an obligation to register for and file corporate tax returns. However, there may be a relaxation of filing and registration requirements for small businesses under rules that are still awaited.

Conclusion

If your business is a mainland business or incorporated in the UAE or if you are a person that operates a business in the UAE, you may be eligible for small business relief, provided that your revenue in the relevant tax period does not exceed AED 3 million.

As UAE’s corporate tax regime are still new, we look forward to seeing additional decisions clarifying the provisions of the Corporate Tax Law, such as those relating to qualifying income.

If you have any questions regarding the UAE corporate tax regime or its application to your business, please get in touch with your usual Reed Smith contact or one of the authors. We would be happy to assist you in determining whether corporate tax will apply to your business and what the next steps are to ensuring compliance.

Supporting the growth of small businesses is crucial for the UAE’s economy, and the Small Business Relief paves the way for a promising future for these enterprises.

Why is Alliance Prime the best Tax Consultancy in Dubai?

For any Corporate Tax or related enquiry, visit localhost/alliance-acc/ or contact us at- +971 58 825 7795 or Email us at:- contact@alliance-acc.com

A Quick Guide to Corporate Tax Registration in the UAE

Posted on July 20, 2023 by admin

FTA has invited all taxpayers in the state to register for corporate tax.

Eligibility for Early Registration
Currently the registration is open for Public Joint Stock Companies ‘PJSC’, Private Shareholder Companies ‘PSC’, and other private entities such as Limited Liability Company “LLC”. Registration is required for all legal entities except those are Exempt Persons, unless insofar Exempt Persons conduct a Business or a Business Activity. Non-resident companies such as a Branch of a foreign company, and Sole Establishment should not register for now, but wait for further clarification from the FTA.

Distinction from VAT Registration
The UAE Corporate Tax ‘CT’ registration is a separate process from VAT registration. Companies registered for VAT should also register for Corporate Tax ‘CT’, and receive their Tax Registration Number “TRN”, which is unique per each Taxpayer.

CT Registration Assistance
Companies that are invited for early registration should follow the FTA’s guidelines for the registration process, and we would be glad to help you throughout the registration process. As an FTA Approved Tax Agent, Alliance Prime is a leading provider of auditing, accounting, taxation, and advisory services in the UAE. Our team’s experts will guide you through the complex laws and regulations of the UAE, including the Corporate Tax Registration process.

Why is Alliance Prime the best Tax Consultancy in Dubai?

For any Corporate Tax or related enquiry, visit localhost/alliance-acc/ or contact us at- +971 58 825 7795 or Email us at:- contact@alliance-acc.com

Ministerial Decision No (120) of 2023 on Transitional Rules for Corporate Tax.

Posted on May 26, 2023 by admin

UAE Corporate Tax Update📣

The Ministry of Finance UAE has issued Ministerial Decision No (120) of 2023 on Transitional Rules for Corporate Tax.

The decision includes adjustments for the opening balance sheet under the Corporate Tax Law and offers significant clarifications for businesses to transition smoothly before and after the enactment of the Law.

The decision applies to certain assets and liabilities held by businesses before the Corporate Tax Law comes into effect, such as:

Immovable property
Financial assets

When filing their initial Tax Return, businesses have the opportunity to make adjustments to the tax treatment of their assets and liabilities, in accordance with specific regulations. It is crucial for businesses to carefully consider and determine the approach they wish to take in this regard.

Under normal circumstances, their decision would be considered permanent. However, it is important to note that there may be certain exceptional situations or specific conditions where this permanence could be subject to change or reconsideration. These special circumstances would require additional evaluation or consideration before any adjustments or alterations to the initial decision are made.

There is further flexibility for the real estate sector

Companies with immovable property recorded on a historical cost basis, before the Corporate Tax comes into effect, can select the basis of the relief, using either:

✅ a time apportionment method; or

✅ valuation method

For details, refer the detailed copy of the Ministerial Decision here: https://mof.gov.ae/tax-legislation/

Why is Alliance Prime the best Tax Consultancy in Dubai?

For any Corporate Tax or related enquiry, visit localhost/alliance-acc/ or contact us at- +971 58 825 7795 or Email us at:- contact@alliance-acc.com

UAE Corporate Tax Registration is Open from May 15, Monday

Posted on May 16, 2023 by admin

The registration for UAE Corporate Tax has been started on May 15th, Monday through the EmaraTax platform.

The UAE’s Federal Tax Authority (FTA) has started registration for corporate tax through the EmaraTax digital tax services platform for public joint stock companies and private firms from Monday, May 15, 2023.

Under the Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses, PJSCs and private firms will be subject to a nine per cent corporate tax from the beginning of their first financial year that starts on or after June 1, 2023. Therefore, they must register and obtain a tax registration number for corporate tax purposes.

In line with Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses (“Corporate Tax Law”), which stipulates that Taxable Persons will become subject to Corporate Tax from the beginning of their first financial year that starts on or after 1st June 2023.

Therefore, Taxable Persons must register and obtain a Tax Registration Number for Corporate Tax purposes.

UAE Corporate Tax Registration

The FTA invited all Taxable Persons that are Public Joint Stock Companies and Private Companies resident in the UAE for Corporate Tax purposes to register with the FTA, noting that this will not cover Free Zone Persons for whom Corporate Tax Registration will be made available at a later stage.

Similarly, Corporate Tax registration for other categories of Taxable Persons, such as natural persons conducting Business or Business Activity as to be specified by a Cabinet Decision, will open at a later date.

The Authority explained that early Corporate Tax registration will allow ample time for companies and businesses to comply with their legal obligations.

For the time being, the Corporate Tax registration process will be available to individual legal entities only.

Entities that would like to form a Corporate Tax Group are required to register individually first, and then, at a later date, will be able to apply to form a Corporate Tax Group.

The UAE Ministry of Finance has also issued a guide explaining all aspects of the upcoming Corporate Tax in the country.

The guide aims to explain all aspects of the taxation guidelines and explains every single article in the law. Click here to download the Corporate Tax Guide issued by the UAE Ministry of Finance.

Why is Alliance Prime the best Tax Consultancy in Dubai?

For any Accounting or Taxation or related enquiry contact us at- +971 58 825 7795 or Email us at:- contact@alliance-acc.com

The Muwafaq Package: Innovative tax solutions to encourage SMEs in the UAE

Posted on May 5, 2023 by admin

The initiative offers innovative tax solutions and digital learning materials to facilitate self-compliance, along with quick and precise procedures.

The United Arab Emirates (UAE) has always been at the forefront of promoting and supporting small and medium-sized enterprises (SMEs) in the country. Inline with this, the Federal Tax Authority (FTA) has launched the Muwafaq Package which aims to make it easier for small and medium-sized enterprises (SMEs) to comply with tax regulations and conduct their business practices. The Muwafaq Package is a significant and fast project that seeks to create positive change in the SME sector quickly and adopt a new approach to government activities.

Benefits of Muwafaq Package

The package offers various benefits, including financial assistance, advisory services, and access to new markets. In addition to these benefits, the Muwafaq Package also has an impact on VAT and corporate tax in the UAE.

The Muwafaq Package provides several financial incentives to SMEs, including a zero-interest loan for six months and a 50% reduction in the fees for the SME registration and licensing process. These incentives help SMEs overcome their cash flow problems and reduce their operational costs. Moreover, the package offers SMEs access to credit facilities and loan guarantees, enabling them to secure funds to invest in their businesses, expand their operations, and create new job opportunities.

One of the primary benefits of the Muwafaq Package is the financial assistance provided to SMEs. The package offers several financial incentives, including a zero-interest loan for six months and a 50% reduction in the fees for the SME registration and licensing process. These incentives help SMEs overcome their cash flow problems and reduce their operational costs.

The financial assistance provided by the Muwafaq Package has a significant impact on VAT in the UAE. Since SMEs are the primary beneficiaries of the package, they are more likely to be eligible for the VAT refund scheme. The VAT refund scheme allows eligible businesses to recover the VAT they have paid on their purchases. By providing SMEs with financial assistance, the Muwafaq Package increases their chances of being eligible for the VAT refund scheme, thus reducing their VAT costs.

Moreover, the package offers SMEs access to credit facilities and loan guarantees. This enables SMEs to secure the necessary funds to invest in their businesses, expand their operations, and create new job opportunities. By providing SMEs with access to credit facilities, the package helps SMEs strengthen their financial position and grow their businesses.

Impact on VAT and Corporate Tax in the UAE

The Muwafaq Package has an impact on corporate tax in the UAE. One of the incentives offered by the package is a waiver of the administrative penalties imposed on businesses for late payment of corporate tax. This waiver is applicable to all businesses, including SMEs. By waiving the administrative penalties, the government encourages businesses to comply with their tax obligations, reducing the burden on SMEs and promoting a more favorable business environment in the UAE.

Another significant benefit of the Muwafaq Package is the advisory services provided to SMEs. These advisory services help SMEs overcome the challenges of running a business and make informed decisions that lead to their success. The advisory services provided by the Muwafaq Package also have an impact on VAT and corporate tax in the UAE. The package offers SMEs access to expert advice on various aspects of their business, including financial management, marketing, and legal compliance. This advice helps SMEs make informed decisions and comply with their tax obligations, reducing the risk of penalties and fines for non-compliance.

The package also provides SMEs with access to new markets through various initiatives. For example, the UAE government has launched an online platform called “Made in UAE” to showcase locally produced goods and services. SMEs can use this platform to promote their products and services and reach new customers.

Additionally, the package includes initiatives to promote e-commerce and digital transformation among SMEs. These initiatives help SMEs leverage technology to improve their operations, increase efficiency, and reach new markets.

Conclusion

The Muwafaq Package is a significant step towards supporting SMEs in the UAE. The package offers various benefits, including financial assistance, advisory services, and access to new markets. In addition to these benefits, the Muwafaq Package has an impact on VAT and corporate tax in the UAE. The financial incentives provided by the package increase the chances of SMEs being eligible for the VAT refund scheme, while the waiver of administrative penalties promotes tax compliance. The advisory services and initiatives to promote e-commerce and digital transformation also help SMEs comply with their tax obligations and reduce the risk of penalties and fines. Overall, the Muwafaq Package promotes a more favorable business environment for SMEs in the UAE and contributes to the growth and development of the country’s economy.

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