Corporate Tax Registration in UAE

According to Article 11 of the UAE Corporate Tax Law, taxpayers in the UAE are:

• companies incorporated in the UAE (including Free Zone and offshore companies);
• foreign companies managed and controlled from the UAE;
• foreign companies with a permanent establishment in the UAE;
• individuals doing business in the UAE;
• non-residents of the UAE receiving income from sources in the UAE;
• non-residents of the UAE having nexus in the UAE (receiving income from real estate in the UAE).

According to Article 51 of the UAE Corporate Tax Law, registration with the UAE Tax Authority and obtaining a tax registration number is required for all taxpayers except:

• government entities;
• state-owned enterprises (UAE);
• companies engaged in the extraction of UAE natural resources and related non-resource activities (with some exceptions);
• non-residents of the UAE who receive income from UAE sources and do not have a permanent establishment in the UAE

Therefore, if you have:

• a company incorporated in the UAE (not included in the exceptions listed above), or
• a foreign company that is operated from the UAE, or has a permanent establishment in the UAE, or derives income from real estate in the UAE, or
• a business in the UAE that you run as an individual

IT IS OBLIGATORY to register for corporate tax in the UAE.

For companies incorporated before 01.03.2024 the deadline for applying for corporate tax registration depends on the month of license issuance (irrespective of the year of issuance).

It is important to note that there are other deadlines for certain categories of persons, namely:

• for UAE resident legal entities incorporated after 01.03.2024:
  – if the company is incorporated in the UAE, 3 months from the date of incorporation;
  – if the company is incorporated in a foreign jurisdiction, 3 months after the end of the fiscal year;
• for non-resident legal entities with a permanent establishment or “connection” in the UAE (see Article 4 of Decision No. 3);
• for UAE resident individuals conducting business activities: until March 31 of the following calendar year; if the turnover exceeds AED 1 million during 2024, then until 31.03.2025;
• for non-resident UAE individuals conducting business activities: no later than 3 months from the date on which the individual is subject to income tax if the turnover exceeds AED 1 million.

Tax registration implies certain obligations of a taxpayer, including the timely submission of tax returns, etc. Timely and proper fulfillment of the taxpayer’s obligations is impossible in the absence of tax registration.

The penalty for late registration for corporate income tax purposes is AED 10,000 (USD 2,725).

It is possible to register so-called offshore companies in the UAE in Free Zones such as RAK International Corporate Center, Jebel Ali Free Zone or Ajman Free Zone. Such companies are authorized to operate exclusively outside the UAE and cannot obtain a business license in the UAE.

The UAE Tax Authority has issued an official ruling regarding the status of offshore companies in the UAE in relation to corporate tax: they are considered residents and are also subject to the obligation to register for corporate tax.

Our experts recommend not delaying the tax registration of companies to avoid penalties.