UAE corporate tax: All you need to know about EmaraTax

The law stipulates that taxable persons and businesses will be subject to nine per cent corporate tax from the beginning of their first financial year

Waheed Abbas

Published: Tue 24 Jan 2023, 6:00 AM

Last updated: Tue 24 Jan 2023, 5:48 PM

The UAE’s Federal Tax Authority (FTA) has launched early registration for corporate tax through the EmaraTax platform for digital tax services.

The Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses stipulates that taxable persons and businesses will be subject to nine per cent corporate tax from the beginning of their first financial year that starts on or after June 1, 2023.

Below is a complete details that businesses and individuals need to know about EmaraTax:

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What is EmaraTax digital platform?

The FTA-launched digital platform EmaraTax significantly enhances the way UAE taxpayers can access the FTA’s services, pay their taxes and obtain refunds. The platform greatly enhances the ability of the FTA to administer taxes in the UAE, and enables better, faster decision-making and earlier engagement with taxpayers that need support.

Who will benefit from EmaraTax digital platform?

Individual taxpayers, tax agents, legal representatives, foreign missions and diplomats, customs bodies and verification agencies all benefit from the range of new developments that EmaraTax brings to life.

Will companies be invited to register on EmaraTax?

Selected companies will receive invitations from the FTA by email and SMS, allowing them to register via the EmaraTax platform.

When will registration begin for other businesses on EmaraTax?

The FTA will announce at a later date when registration will be open for others.

How much time will be given for registration on EmaraTax?

The Authority will make sure to give ample time for companies and businesses to apply for registration and meet their legal obligations. Priority will be given to companies that have a financial year starting on June 1, 2023.

When will the corporate tax come into effect?

The corporate tax will come into effect for taxable persons and companies from the beginning of their first financial year that starts on or after June 1, 2023.

When will registration begin?

The registration period is currently available for certain categories of companies operating in the UAE.

What is the minimum threshold to pay corporate tax?

Companies and individuals posting over Dh375,000 profit per annum will have to pay a nine per cent tax.

Is it the lowest corporate tax rate in the world?

Yes. It’s one of the lowest corporate taxes in the world.

Will corporate tax apply to turnover or profit?

Corporate tax will be levied on the profit, not on the total turnover, of the company.

Will UAE residents getting a salary of over Dh375,000 have to pay tax?

No. It will not be applicable to the salary.

Will corporate tax apply to a freelancer?

Individuals holding the freelance permit, under the self-sponsorship and earning income in excess of the threshold will be subject to corporate tax.

Who is exempted from the corporate tax?

A qualifying free zone entity which fulfils all conditions specified in the Executive Regulations of the UAE Corporate Tax Law will be exempt. Natural resource extraction activities are also exempted; however, they’re subject to existing emirate-level taxation. Government entities' activities (Excluding commercial activities), pension funds, investment funds and public benefit organisations are exempt from the corporate tax.

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