The Federal Tax Authority (FTA) in the United Arab Emirates (UAE) has launched a pre-registration process for corporate tax through its digital tax services platform, EmaraTax.
This move is in line with Federal Decree-Law No. 47 of 2022, which stipulates that taxable persons will become subject to corporate tax starting from the first financial year that begins on or after June 1, 2023.
Early registration for certain categories of companies operating in the UAE will be open from January 2023 to May 2023.
Selected companies will receive invitations via email and SMS, allowing them to register through the EmaraTax platform. The FTA will announce at a later date when registration will be open for other companies and businesses, with priority given to those with a financial year starting on June 1, 2023.
After the current phase of early registration, the Federal Tax Authority (FTA) will announce when registration for other businesses will become available. The FTA will ensure that there is sufficient time for businesses to register and fulfill their legal obligations before the deadline. When registration becomes open, companies and businesses with a financial year starting on June 1, 2023 will be given priority.
Preparing Your Business for the Implementation of the New Corporate Tax: Steps to Take Now
As the implementation of the new corporate tax approaches, businesses in the United Arab Emirates need to take steps to prepare for the changes. To ensure a smooth transition, businesses are advised to take the following steps now.
- Review the Corporate Tax Law: The first step businesses should take is to familiarize themselves with the Corporate Tax Law, specifically the regulations and requirements related to their specific industry or activities. This will help businesses understand their tax obligations and ensure compliance with the new regulations.
- Review accounting records: it is crucial for businesses to keep their accounting records accurate and up-to-date before the registration process for the new corporate tax. The records for the year prior to registration will serve as the opening accounts for the first tax year. These opening accounts must be prepared in accordance with the corporate tax regulations and comply with the Anti-abuse rules that have been in effect since December 2022.
- Appoint an authorized tax agent or consultant : Businesses are advised to appoint a tax representative to handle their tax-related matters, beginning with the registration process, and act as a liaison with the Federal Tax Authority (FTA). Having a dedicated professional in charge of this can simplify the implementation and transition process.
- Review accounting and tax systems: UAE businesses should take steps to ensure that their accounting and tax systems are appropriate, properly set up, and current. This will facilitate accurate calculation and payment of taxes, and help avoid any potential penalties for non-compliance. Additionally, maintaining updated accounting and tax systems can help reduce administrative costs and increase efficiency, thus minimizing the financial impact of the newly implemented tax.
- Stay informed of tax updates: It is important for businesses to stay current on announcements from the FTA, such as cabinet decisions, tax guidance and public clarifications. This is because the Corporate Tax Law includes provisions that will be further defined and explained through these types of announcements in the future.
In conclusion, the implementation of the new corporate tax in the UAE presents a range of challenges for businesses. By taking the steps outlined above, businesses can be well-prepared and minimize negative impacts on their operations and bottom line. Additionally, by properly assessing their accounting and tax systems, businesses can not only comply with the new regulations but also achieve efficiency, which can help reduce the overall impact of the new tax. Businesses that take a proactive approach to preparing for the new tax will be well-positioned to navigate the changes and continue to thrive in the market.
How Can Audiix Help?
Audiix will make every effort to help you with resources and updates that would assist you to be prepared for the new tax in terms of compliance and tax planning.
This information summary is provided for general awareness purposes only and is not intended to replace an accounting, tax, or professional advice. Please seek professional advice before making any decision. We assume no liability or responsibility for any errors, omissions, or inaccuracy in this content.
Please note that the information contained on this website is provided for informational purposes only, and should not be construed as accounting, tax, financial, or other professional advice. We encourage you to seek personalized advice from qualified professionals before making any decisions. We assume no liability or responsibility for any errors, omissions, or inaccuracies in the content of this website.