Do you have questions about how the corporate tax registration process in UAE applies to foreign branches? For foreign companies who want to expand into the UAE, they need to know the tax registration procedure. This article describes the steps and requirements to register for corporate tax in the UAE for foreign branches.
Corporate Tax Registration for Different Entities
Registration of local vs. foreign entities
The registration process for corporate tax in the UAE varies depending on the type and size of the entity. Local companies must register for corporate taxes once they reach the threshold of revenue. Foreign branches are also required to do so if they have taxable income. Registration requirements can vary depending on an entity’s location, business activities and revenue.
How local and foreign entities are treated differently
For foreign entities in the UAE, there may be additional paperwork and a longer review process than for local businesses. To comply with corporate tax regulations, foreign branches are required to provide proof of income that is sourced in the UAE.
Corporate Tax Registration for Foreign Branches in UAE
The Registration Process: Key Steps
The registration process in the UAE for foreign branches is very similar to that of local businesses, but there are some additional requirements. First, foreign branches must verify that they generate income taxable in the UAE. Once this is confirmed, the foreign branch must provide all necessary documentation, including financial statements of their parent company and proof that revenue was generated in UAE.
Special considerations for foreign branches
For profits above AED 375,000, foreign branches are subjected to a corporate tax of 9%. These branches are also required to comply with local tax filing requirements and may be asked to provide detailed financial documents to prove their tax obligations.
Corporate Tax Registration for Small Businesses
Early registration is beneficial for small businesses
Registration for corporate tax is required by small businesses in the UAE who exceed the threshold of AED 375,000. Small business owners can avoid legal and financial issues by registering early. They also gain a better understanding of their obligations in terms of taxes, which is helpful for planning and managing finances.
Tax incentives for small businesses in the UAE
UAE offers small businesses several tax incentives, including exemptions from certain free zones. Small businesses can benefit from tax incentives by registering to pay corporate tax. They will also remain compliant with local laws.
Corporate Tax Registration for Natural Persons
Who are considered natural persons?
Individual taxpayers are individuals who receive income directly, rather than via a corporation. Individuals who earn enough to be taxed in the UAE must register as corporate taxpayers.
What is the impact of corporate tax on natural persons?
All natural persons are required to file tax returns on any income they earn within the UAE. Individuals are subject to a corporate tax of 9% on incomes exceeding AED 375,000 per year.
Table: Key Information on Corporate Tax Registration
| Types of Entities | Eligibility | Tax Rate | Registration Process Length |
|---|---|---|---|
| Local Businesses | Revenue > AED 375,000 | 9% | Two to four weeks |
| Foreign Branches | Revenue > AED 375,000 | 9% | Two to four weeks |
| Small Businesses | Revenue > AED 375,000 | 9% | Two to four weeks |
| Natural Persons | Income > AED 375,000 | 9% | Two to four weeks |
What Mubarak al Ketbi Chartered Accountants Can Do to Help with Corporate Tax Registration in UAE for Foreign Branch Offices
We provide professional guidance at Mubarak Al Ketbi Chartered Accountants to assist foreign branches in registering for corporate tax in the UAE. We make the process easier by making sure that all documents are accurate and on time. Our team of experts can provide advice on how to comply with local regulations and meet specific tax requirements.
Partnering with us will help you avoid unnecessary complications, and ensure that your business is registered and in compliance with UAE tax laws. Our services will save you valuable time and help prevent costly errors during the registration process.
Frequently asked Questions
Do foreign branches need to register for corporate tax?
Yes, foreign branches generating income in the UAE must register for corporate tax.
What is the corporate tax rate for foreign branches in the UAE?
Foreign branches are subject to a 9% corporate tax on profits exceeding AED 375,000.
Can small businesses benefit from tax exemptions in the UAE?
Yes, small businesses in free zones may qualify for tax exemptions or reduced rates.
How long does the corporate tax registration process take for foreign branches?
The process typically takes 2-4 weeks for foreign branches.
