If you haven’t had the time to check the Explanatory Guide yet, we’ve prepared a quick summary of some key points for you:
- All businesses (including free zone companies) must register for corporate tax, keep proper accounting records and file a tax submission with the Federal Tax Authority (FTA).
- A 0 percent corporate tax rate will apply to businesses with a taxable income of up to AED375,000.
- A 9 percent corporate tax rate will apply on taxable profits over AED375,000.
- A 0 percent corporate tax rate will apply to qualifying free zone persons.
- Startups and small businesses can apply for the Small Business Relief rule, where by qualifying businesses that have annual turnover of up to AED3,000,000 will not pay corporate tax.
- Dividends and capital gains earned from share holdings can be exempted from corporate tax if relevant conditions are met.
- Transfer pricing documentation requirements and thresholds have been put in place to alleviate the compliance requirements for small and medium-sized enterprises.
- Related companies may be able to form a tax group, provided that relevant conditions are satisfied.
- Foreign tax credits will apply to non-exempt foreign-sourced income to avoid double taxation.
The UAE’s Federal Tax Authority has started the registration for corporate tax through EmaraTax digital services. Private firms can now register through the digital platform.
We will guide you through the registration process and help you understand how corporate income tax affects your business, what you need to do to comply, how to determine if you are eligible for exemptions and what processes you need to implement in your business.
If you are still wondering what to do to prepare for corporate tax, don’t worry because you’re not alone. Many of our clients are also looking for answers, and that’s why we’re here to make things clear and easier for you. Here are some of the questions we’ve been getting:
Will corporate tax affect my business?
Yes, corporate income tax affects all businesses, including free zone companies.
How can I prepare for tax season?
Working with an accountant can help ensure you file and remit your business taxes on time. This process includes preparing and completing accounting forms and remitting your tax liabilities to the right agencies.
What accounting paperwork should I prepare and keep?
To comply with the new corporate tax law, you will need to prepare and maintain the following documents: financial statements, bank statements, business tax returns, credit card statements, receipts and more.
Am I eligible for a tax refund?
Getting a tax refund will depend on your business and expenses. If you meet the requirements or criteria set by FTA, you can deduct certain business expenses on your tax return.
