The UAE’s Federal Tax Authority (FTA) is responsible for enforcing registration for corporate tax and VAT, as applicable. The registration methods for corporate tax and VAT differ. The notable difference between corporate tax registration and VAT registration is that the former requires fewer documents, whereas the latter requires a longer list. It is critical to understand the differences between corporate tax registration and VAT registration to ensure tax compliance, improve cash flow management, and avoid penalties for non-compliance.
Who must register for Corporate Tax and VAT
Corporate tax and VAT registration are not mandatory for all businesses operating in the UAE.
Corporate tax
Corporate tax applies to the following.
- All foreign juridical persons with a permanent establishment in the UAE.
- All juridical persons incorporated in the UAE.
- All juridical persons that are controlled and managed in the UAE.
- Individuals will only be subject to corporate tax registration if they conduct business activities or are engaged in business in the UAE, directly or through a sole proprietorship or an unincorporated partnership.
VAT
VAT is mandatory for the following.
- A resident business in the UAE must register for VAT if the total value of their taxable supplies and imports exceeds AED 375,000 in a calendar year, or if revenue is expected to exceed the threshold within the next 30 days.
- A non-resident business must register for VAT if the business makes taxable supplies in the UAE. They must also register even if the value of the supplies is within the threshold, unless another UAE party is responsible for settling the VAT on those supplies.
- Resident businesses in the UAE can voluntarily register for VAT if the value of taxable imports, supplies, and taxable expenses exceeds the AED 187,500 threshold in a calendar year, or if they are expected to do so within the next 30 days.
Registration channels and fees
The EmaraTax platform must be used for corporate tax and VAT registration. The platform is available 24/7. No fee is levied on corporate tax and VAT registration facilities.
Estimated time to submit registration application
It takes 25 to 30 minutes to submit the corporate tax registration application, and 45 to 50 minutes to submit the VAT registration application.
Estimated time for FTA to approve
The FTA approves the application within 20 business days of receiving the duly completed corporate tax registration and VAT registration application.
Documents and forms
Various mandatory and optional documents and forms are required to register for corporate tax and VAT.
Corporate tax registration
The following corporate registration documents must be submitted on the portal. The documents must be in PDF format, and each file must not exceed 15 MB.
- Valid Trade License (this includes brand license if applicable)
- Certificate of Incorporation, Partnership Agreement, or Memorandum of Association
- The owner’s Emirates ID and passport if he holds over 25% ownership, and the authorised signatories
- Commercial Registration Certificate or other official licensing authority document
- Authorisation proof for the signatory
VAT tax registration
The following documents and forms are required for VAT registration. The requirements depend on the entity’s legal form (such as a legal person or a natural person). The documents must be submitted as PDF and DOC files, with each file size not exceeding 15 MB.
- Trade license and branch license, if applicable
- A minimum of five VAT invoices with amounts more than the registration threshold for expenses
- The owner’s Emirates ID and passport, and authorised signatories
- Commercial registration certificate or other licensing authority-issued document
- Customs information (if available)
- Official declaration letter stamped and signed by an authorised signatory detailing total taxable supplies and monthly sales starting from the date of establishment up to the application date
- Registration documents and evidence for charities, clubs, or associations (when selecting Legal Person – Club, Charity, or Association)
- Certificate of Incorporation, Partnership Agreement, or Memorandum of Association
- Stamped and signed (by both parties) expected revenues supported by documents such as contracts
- According to the application type, the following supporting documents must be attached: contracts, completion certificates, invoices, lease agreements, local purchase orders, and ownership deeds
- Decree copy (applicable for those selecting ‘Legal Person – Federal Government Entity in the UAE’ or ‘Legal Person – Emirate-level Government Entity in the UAE)
- Authorised signatory’s power of attorney document (if the Memorandum of Association does not contain the manager’s name, or adding persons as authorised signatories
- Optional: Bank letter with a breakdown of bank account information (for legal entities, the account needs to be in the company’s name, and for individuals, the sole establishment account or a personal account can be used)
Registration steps
The registration steps for the corporate tax and VAT are straightforward.
Corporate tax
The corporate tax registration process involves the following steps.
Step 1: Open the Emaratax portal and register using email ID and phone number to create a new account. If an account exists, log in with credentials.
Step 2: Select a taxable person from the list of create a new taxable person profile.
Step 3: The Corporate Tax option is displayed; the taxpayer must select it.
VAT
The VAT registration process involves the following steps.
Step 1: Go to the FTA’s website and sign up for an EmaraTax account. Activate the account.
Step 2: Go to the EmaraTax account dashboard and create a new taxable person profile.
Step 3: Click on ‘View’ to access the taxable person account.
Step 4: Click on ‘Register’ under the ‘Value Added Tax’.
Step 5: Complete VAT registration.
Registration terms and conditions
Registration for corporate tax and VAT requires an understanding of the terms and conditions set out by the Ministry of Finance and the Federal Tax Authority.
Corporate tax
All taxable people must register for corporate tax to obtain a Corporate Tax Registration Number in the UAE. This is required under the Corporate Tax Law. If a natural person conducts business in the UAE and generates more than AED 1 million in a calendar year, they must register for corporate tax. When calculating the revenue, the following are exempt: private investment income, salary, and real estate investment income.
The FTA can ask some exempt people to register for corporate tax. Domestic company branches are not categorised as separate legal entities (as they operate under a ‘parent’ company), so they must not be registered separately for corporate tax purposes.
VAT
VAT registration is mandatory for any legal or natural person conducting business in the UAE. It applies even to those people without a trade license. The FTA enables VAT-registered people to obtain a Tax Registration Number. People required to register for VAT must submit the application within 30 days of being asked.
If the person fails to submit the registration application on time, the FTA will impose a penalty in accordance with applicable tax laws and regulations. The person must ensure they correctly fill in the details, as failing to do so may incur penalties prescribed by applicable laws and regulations.
Corporate tax and VAT are mandatory for entities that fall within their scope in the UAE. The FTA oversees the collection of these taxes and enforces the registration process for applicable people. It is essential that taxpayers accurately complete all required details, submit the necessary documents, register on time, and follow the guidelines carefully. Registration is done on the EmaraTax portal, which is available 24/7, and the steps are simple. However, taxpayers must ensure they prepare early to remain compliant and avoid penalties.
