Registration with the FTA for Corporate Tax in the UAE

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Registration with the FTA for Corporate Tax in the UAE

Registration with the FTA for Corporate Tax in the UAE

As of June 1, 2023, new corporate taxation rules came into force in the United Arab Emirates, marking a significant step in the development of the country’s tax system. One of the key changes is the introduction of a 9% corporate tax on profits, which affects many business entities as well as individual entrepreneurs. In this article, we will review the process of registering with the Federal Tax Authority (FTA) for tax purposes, along with the key criteria that must be taken into account.

According to the new requirements, all legal entities are required to register with the tax authority within three months of obtaining their business license.

For individuals, a number of conditions also apply. Individuals who earn income from business activities or have a permanent establishment in the UAE with annual revenue exceeding AED 1 million are required to register with the FTA. This rule applies to both UAE residents and foreign individuals who, despite living outside the country, generate income within the UAE.

To determine whether an individual is required to register with the FTA, it is necessary to consider the criteria set out in the official guidelines:

UAE residents – individuals residing in the country who earn income from business activities exceeding AED 1 million per year.
Foreign individuals – non-residents who receive income from UAE-related activities must also register if their profits exceed the specified threshold.
Permanent establishment. If an individual has a permanent establishment in the UAE, this is also a basis for mandatory registration.
Exemptions. It is important to note that salaries and investment income are not subject to corporate tax, which can be a significant advantage for many individuals and investors.

Registration with the FTA is carried out through the authority’s official website. Applicants are required to prepare a set of documents, including:

A copy of the passport and visa (for residents).

Proof of income (such as bank statements, contracts, etc.).

Information about the business or any permanent establishment, if applicable.

After submitting the application, the tax authority reviews the provided information and makes a decision regarding registration. If approved, the applicant receives a unique tax registration number, which must be used for tax reporting and payments.

Registration with the Federal Tax Authority for corporate tax purposes in the UAE is a mandatory step for anyone conducting business or earning income within the country. With the introduction of the new tax regime, it is essential to comply with the established criteria and stay informed about regulatory updates. Proper registration ensures business compliance and helps avoid potential fines and penalties.