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What Are the Deadlines for Corporate Tax Registration for Startups in the UAE?
The UAE, a global business hub known for its investor-friendly environment and attractive tax policies, introduced corporate tax starting June 1, 2023. The standard corporate tax rate in the UAE is 9% on taxable income above AED 375,000. However, a new 15% corporate tax rate has been introduced for certain large multinational corporations (MNEs).
Why Was This Introduced?
This change aligns the UAE with global tax reforms under the OECD/G20’s Base Erosion and Profit Shifting (BEPS) framework, specifically Pillar Two, which sets a global minimum tax rate of 15% for large MNEs. The goal is to ensure that these big companies pay a fair share of tax no matter where they operate, leveling the playing field for local businesses.
Who Does the 15% Rate Apply To?
This higher tax rate applies to multinational enterprises with:
- Global consolidated revenues exceeding €750 million (about AED 3.15 billion) in at least two of the last four years.
- Operations in the UAE, regardless of whether their headquarters are located inside or outside the country.
So, while most UAE businesses—especially local companies and small or medium-sized enterprises (SMEs)—will continue to be taxed at 0% (for income up to AED 375,000) and 9% (for income above AED 375,000), large global businesses will now face the higher 15% rate.
What Does This Mean for Businesses?
For SMEs and local businesses, the standard rates of 0% and 9% still apply, so most will not be affected. However, compliance requirements such as corporate tax registration in the UAE, VAT registration services in the UAE, and the need for timely VAT and corporate tax filing in the UAE are crucial for businesses of all sizes. In addition, maintaining accurate bookkeeping and accounting services in the UAE, preparing financial audit reports, conducting FTA penalties assessments, and generating interactive financial reports can all help ensure businesses remain compliant and ready for audits or reviews.
How Can Choose UAE Help
At Choose UAE, we’re here to help businesses navigate the new UAE corporate tax landscape, including the new 15% corporate tax rate for large multinationals. Our clear, cost-effective plans with no hidden fees make it easy to understand and meet your compliance obligations. With verified 5-star Google reviews and the trust of UAE businesses, we provide the expertise and support you need to stay compliant and focused on growth. Book your FREE 30-minute accounting consultation today and let us help you navigate your tax obligations with confidence.
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