UAE Corporate Tax: Big businesses, public companies get first shot at registering via EmaraTax

Dubai: A staggered approach to registering for the UAE’s Corporate Tax program offers more time for mid- and small businesses to get their processes in order. At the same time, it gives the tax authorities to fine-tune all of the related processes before the implementation date for the Corporate Tax from June 2023.

Currently, the ‘big corporates and public joint stock companies (PJSC) have been invited to do their CT registrations through the EmaraTax platform’, said Manoj Agarwal, a tax consultant.

Based on their VAT registrations, the Federal Tax Authority (FTA) has info on these big corporate houses, specifically the ones with financial year starting June 1, 2023.
– Manoj Agarwal

This ties in with what Dr. Nabeel Ahmed, Partner at DVS Management Consultancy, has to say. “While there is no conclusive information as to which select businesses were sent the invite by FTA allowing them to register via EmaraTax, we are aware some businesses with revenues beyond a certain threshold have received these invites. The FTA would be aware of such companies by virtue of them being registered for purposes of VAT.”

The early registration period will continue until May. Registration is open for certain categories – i.e., a ‘Legal Person’, which includes PJSCs and UAE private companies.

Two different tax processes

According to tax consultants, while businesses in the UAE can put to good use what they have learnt from registering and complying with VAT, the requirements on CT registration is quite different. For ‘smoother functioning, most details of businesses already registered with FTA for VAT are pre-populating in the CT registration form,” said Agarwal.

“If businesses are ready with all the info required, it is going to be a smooth process. The big entities must already be following an internal compliance process. For them, it will not be too complex to meet the requirements.

“For others, there is ample time for registration.”

Await the FTA invitation to register for CT

FTA is contacting selected businesses and these entities will be receiving invitations from the FTA by email and SMS, inviting them to register. Unless businesses have received an ‘Invitation to Register’, they are not required to take any action. Registration for others will be announced in due course. Once opened, priority will be given to businesses that have a financial year beginning June 1.

No penalty

The FTA has made it clear there will be no penalty for late registrations. What businesses need to keep in mind is register at least before the due date for tax return submissions. The deadline for filing the CT return with FTA and paying CT is 9 months after the tax payer’s year end.

Who needs to register for CT

All businesses – including those in free zones, companies and individuals – are required to register. Once an application is submitted, a CT registration number (TRN) will be issued. But unlike with VAT, a ‘de-registration’ is not applicable to CT.

Registration is also required even if the tax payer’s income is exempt or below the threshold of Dh375,000 per annum.

Have these documents ready

Businesses need to evaluate the information requirements and their availability. “The documents required may be different based on the type of the entity and its holding structure,” said Agarwal.

The documents required for CT Registration includes:

Main trade license details (depending on the ‘entity type’).
All activities of the business to be included.
All owners who have 25 per cent or more ownership in the entity must be added.
Registration will be in the name of a head office and not a branch. Branch details – trade license details, associated business activities and owners list – need to be added in the same application. In case of multiple branches across different emirates, only one CT registration is required.
The company address. In case of a foreign business, it is required to register, and a tax agent to be appointed.
Passport/Emirates ID of the taxable person. Additionally, evidence of authorization – the power of Attorney or MoA – is required in case of a legal person registrant.
One or more authorized signatories can be added.

Are your ready for UAE corporate tax 2023?

Gulf News in association with Ask Pankaj is organising an exclusive corporate tax seminar on February 8, 2023, at Anantara Downtown Dubai, Business Bay, where we will take a deep dive into the UAE’s new corporate tax regime helping companies and finance professionals understand the best ways to build a tax-efficient financing structure.