The corporate tax registration in the UAE - Who needs to register and by when?

On December 9, 2022, the United Arab Emirates (hereinafter "UAE") issued for the first time a corporate tax law. According to Article 51 of this law, certain taxpayers are required to register for corporate tax within specified deadlines.

These individuals include, according to the published laws as well as cabinet and ministerial resolutions:

1. Legal entities with domicile or place of management in the UAE, including their free zones (Resident),
2.  Natural individuals conducting a taxable trade or business activity in the UAE (Resident),
3. Foreign legal entities having a permanent establishment in the UAE (Non-Resident),
4. Foreign legal entities generating income from immovable property in the UAE, establishing a tax nexus (Non-Resident),
5. Foreign individuals with no permanent establishment in the UAE but earning income from state sources (Non-Resident).

The last group is exempted from the obligation to register for corporate tax according to Ministerial Decision No. 43/2023. For these individuals, a withholding tax is levied, which is currently set at 0%. However, it should be noted that this tax rate could change in the future.

Until recently, it was uncertain within which deadlines taxpayers must register. Originally, it was only stipulated that registration should take place before submitting the first tax return. However, this provision was clarified by Decision No. 3 of the UAE Tax Authority in 2024.

Registration deadlines for legal entities:

A legal entity resident in the UAE that was established, incorporated, or otherwise recognized before March 1, 2024, is required to submit its application for tax registration according to the following deadlines:

However, for entities established or recognized after March 1, 2024, the following deadlines apply:

• A legal entity with domicile in the UAE (territory and free zones) must submit its application for tax registration within three months of its establishment, incorporation, or recognition.
• A legal entity with a place of management in the UAE (territory and free zones) must submit its application for tax registration within three months after the end of its financial year.

Different deadlines apply to foreign legal entities:

Registration deadlines for natural individuals:

The decision further clarifies that a natural individual conducting business or a business activity in the UAE and exceeding the threshold of AED 1 million must submit an application for tax registration within the following deadlines:

• For a natural individual resident in the UAE: By March 31 of the following Gregorian calendar year in which the business or business activity took place,
• For a foreign natural individual: Within 3 months after the tax liability is triggered.

It is recommended to register as soon as possible, as failure to do so will result in a penalty of AED 10,000 according to the latest decision of the tax authority.