UAE Corporate Tax 2024 – Latest Update

2024 is the first taxable year for freelancers, and small businesses, with the introduction of the new UAE corporate tax law (Federal-Decree Law no. 47) announced on June 1st, 2023. Since most businesses in the UAE follows a financial year beginning on January 1st, starting from 2024 will be the first taxable year for most businesses and entrepreneurs under this new law. 

As a new taxpayer, you may have questions and concerns regarding UAE corporate tax laws. To assist you in navigating this complex landscape and avoiding penalties, our certified tax consultants offer detailed explanations of the steps involved in complying with the UAE's corporate tax regulations.  

Scope of UAE Corporate Tax 

For companies with a financial year-end as December, their first corporate tax period will commence on 1 January 2024. As we know, the general corporate tax rate is 9% for taxable income exceeding the threshold of AED 375,000, and 0% tax for income below that threshold. Certain entities such as Federal Governments, and NGOs will be exempt from corporate tax.  

• 0% tax rate for companies with annual net profits less than AED 375,000. 
• 9% tax rate for companies with profits exceeding AED 375,000. 
• Different tax rates for large multinational companies. 

Register for UAE Corporate Tax 

All companies including – small businesses, freelancers, and businesses registered under free zones must register for corporate income tax. Business owners can register through the official portal “EmaraTax” on the FTA’s website and the process involves simple registration steps, taking no more than 30 minutes. If you need professional assistance in registering for UAE corporate tax, you can get support from the certified vat consultants in Dubai.

EmaraTax portal is designed to simplify tax registration, VAT filing, return filing, and payment processes for all users. If you’re already registered for VAT and Excise Tac, you can log into their EmaraTax portal account, select the taxable person, opt for corporate tax registration, and provide all the details with necessary documentation. Upon approval, a TRN (Tax Registration Number) for corporate tax will be issued. 

For business owners and freelancers who are not registered for VAT or Excise Tax, the first step is to create a new user profile in EmaraTax. All companies, including those in freezones, must register for corporate income tax. The list of documents required for corporate tax registration include the trade or business license, the passport, and the Emirates ID of the authorized signatory. 

UAE Corporate Tax for Free Zone Companies 

Free zone businesses are not exempted from corporate income tax automatically. To be exempted from UAE corporate tax, free zone business owners need to meet the certain criteria. To check your eligibility for tax exemption, discuss with your tax consultants in Dubai.

With the announcement of the Corporate Tax Law in the UAE, it’s must for freelancers, and entrepreneurs to seek professional advice to stay updated from tax regimes. Are you in need of professional support to stay complaint with tax regulations, avoiding penalties and fines? Get help from MTR Expert Consulting, our team of certified tax consultants in Dubai. 

Why Choose MTR Experts for Tax Assistance? 

As a leading consultancy, we are the master in providing solutions for business setup in Dubai, and tax advise for entrepreneurs, freelancers, and business owners in Dubai. 

If you’re searching for a reliable tax consultant in Dubai, you have come to the right place. With years of experience and expertise, we help our clients with VAT registration, VAT return, and tax advisory services. We ensure that your tax returns are filed on time and your business stay complaint with UAE tax norms. Schedule a Free Consultation with our team, if you have any business-related queries, or if you want to set up a business in Dubai. 

Frequently Asked Questions of UAE Corporate Tax 

Who is exempted from UAE Corporate Tax?

As per the recent update 2024, Government entities, a person engaged in an extractive & non-extractive business, a person qualifying public benefit entity, and investment funds are exempted from UAE corporate tax. 

Who is eligible for corporate tax in the UAE? 

You’re eligible for corporate tax in the UAE, if your business generates over 375,000 AED. And this 9% will be calculated on the taxable profits, not the gross revenue of the businesses. 

What is the difference between Corporate Tax and VAT? 

The main difference between corporate tax and VAT is – Corporate tax is a profit-based tax, where VAT is a consumption-based tax. Corporate tax is levied on companies and paid by them, whereas VAT is borne by the consumers of the goods and services they consume. 

Is Freezone exempted from corporate tax? 

The UAE introduced the corporate tax of 9%, starting from the year 2024.

Is VAT applicable in DMCC Freezones? 

DMCC Freezone companies are subjected to pay 5% VAT for any goods and services offered by DMCC.