On June 1, 2023, the UAE put into effect the Corporate Tax law, which brought about significant changes to the tax system for all businesses within its jurisdiction. The law encompasses entities across the UAE, including those in mainland, free zones, and offshore. It also reaches foreign entities managed and controlled from the UAE or having a permanent establishment (PE) or significant nexus there, aligning with international tax principles.
To alleviate the compliance burden, exemptions and relief measures have been introduced, including provisions for small business relief and qualified free zone persons under specific conditions. However, registration with the Federal Tax Authority is mandatory for all. An essential aspect of the new CT law is that every entity, taxable or exempt, must register with the FTA separately from VAT registration, albeit under the same regulatory authority.
The deadlines for registration are approaching, with the earliest being May 31, 2024, based on the trade license issuance date. The portal is open for all entities, except offshore entities, whose registration is temporarily suspended. While registration on the portal is generally straightforward, it may require expert guidance at times to ensure accurate and comprehensive submission of details.
In conclusion, the crucial first step towards complying with the UAE's corporate tax regulations is registering the entity with the FTA. Entities must act promptly to meet the deadlines to avoid penalties. With expert assistance, businesses can navigate the complexities of the new law, ensuring smooth and compliant operations in the evolving UAE tax landscape.
