According to the Federal Tax Authority (FTA) website, taxable persons have a registration period that lasts until their first tax filing deadline. For instance, if a taxable person has a financial year ending on May 31st, they have 26 months to register, meaning they can complete the registration process until February 28th, 2025. Similarly, if the financial year ends on December 31st, there is a 33-month period to register, allowing taxable persons to register until September 30th, 2025.

Additionally:
Businesses with accounting period from June 1st to May 31st have 26 months for registration.

Businesses with accounting period from January 1st to December 31st have 33 months for registration.

Qualifying Income includes the following categories of income, provided that such income is not attributable to a Domestic Permanent Establishment or a Foreign Permanent Establishment in the UAE:

1. Income derived from transactions with other Free Zone Persons, except for income derived from Excluded Activities.
2. Income derived from transactions with a Non-Free Zone Person only in respect of Qualifying Activities that are not Excluded Activities.
3. Any other income provided that the Qualifying Free Zone Person satisfies De Minimis Requirement threshold.

To be considered a Qualifying Free Zone Person, the Free Zone Person must meet all of the following conditions:

1. Maintains Adequate Substance in the UAE
2. Derives Qualifying Income
3. Has not specifically elected to be subject to Corporate Tax under the Corporate Tax Law
4. Complies with Transfer Pricing regulations
5. Maintains audited financial statements as per IFRS / IFRS for SMEs.

Yes, the UAE Corporate Tax applies to small businesses operating in the UAE. However, the UAE government has introduced a Small Business Relief scheme designed to facilitate a smooth transition to the new tax framework for SMEs. As outlined in the Small Business Relief Guide published by the UAE Ministry of Finance, a taxable UAE resident entity can claim Small

Business Relief if its revenue does not surpass the AED 3,000,000 threshold for both the relevant and preceding tax periods within each tax year.

It's important to note that Small Business Relief is not applicable to:
businesses qualifying as Free Zone Persons under the Corporate Tax Law or
to members of Multinational Enterprises Groups (MNE Groups) with consolidated group revenues exceeding AED 3.15 billion, as defined in Cabinet Decision No. 44 of 2020.

Consequently, small businesses or SMEs in the UAE are eligible for Small Business Relief if their revenue remains below the AED 3,000,000 threshold for each relevant tax year.

Transfer pricing constitutes a set of rules and regulations governing the pricing of goods and services exchanged between related entities, including companies within the same multinational enterprise group. Its purpose is to prevent pricing anipulation influenced by their relationships.

In the UAE, transfer pricing rules have a substantial impact on businesses. Recently introduced by the UAE Ministry of Finance, these regulations mandate companies to conduct transactions with related parties at arm's length. This means the prices for goods and services must align with those in transactions between unrelated parties.

As per Ministerial Decision No (97) of 2023 on the Requirements for Maintaining Transfer Pricing Documentation, companies are obligated to maintain a master file and a local file under specific conditions:

If their revenues in a relevant tax period are at least AED 200 million.
If they are part of a multinational group with a total consolidated group revenue of at least AED 3.15 billion in the relevant tax period.

These documentation requirements serve to enable taxpayers to demonstrate the arm's length nature of their transactions with related parties and connected individuals. Standardized files are utilized to ensure consistency and accuracy in this process.

The UAE has implemented Country-by-Country Reporting (CbCR) rules in line with the guidance issued by the Organization for Economic Cooperation and Development (OECD) on CbCR.
The CbCR rules apply to:

The Ultimate Parent Entity (UPE) of a Multinational Group of Entities (MNE) which is a ‘tax resident’ in the UAE and
If consolidated revenues equal to or exceeding AED3.15 billion (approximately USD858 million) in the preceding financial year.

The following table summarizes the CbCR requirements:

Under the corporate tax laws in the UAE, any taxable income surpassing AED 375,000 is subject to Corporate Tax. This taxation framework also encompasses freelancers and independent contractors in the UAE who are self-employed, provided their income exceeds the AED 375,000 threshold.

The UAE's Corporate Tax system is extended to freelancers and other independent contractors who operate autonomously once their income surpasses the AED 375,000 limit. According to the law, these independent contractors must possess a valid license or permit.

Here are some key scenarios in which corporate tax applies to freelancers:

Individuals possessing the recently introduced freelance permit, accessible under the updated labor law for self-sponsored expatriates, are exempt from corporate tax on their income.
In the case of independent contractors holding business licenses within free zones, if they engage in work for other companies, the sponsoring entity is obligated to pay the corporate tax.
For freelancers employed by a company, their income from salaries remains untaxed at the individual level. Instead, it is the responsibility of the company issuing the visa to pay income tax on its net profit.

The UAE Ministry of Finance has released an official decree concerning Small Business Relief, as outlined in Federal Decree-Law No. 47 of 2022, which pertains to the Taxation of Corporations and Businesses, often referred to as the "Corporate Tax Law." This decree is issued in accordance with Article 21 of the Corporate Tax Law, which essentially exempts taxable individuals or entities from having derived any taxable income in a specific tax period if their revenue falls below a designated threshold.

Small Business Relief is primarily designed to provide support to startups and other small or micro-sized businesses by alleviating their Corporate Tax obligations and reducing the associated compliance expenses.

In the UAE, corporate tax is computed at a rate of 9% based on the net profit indicated in the company's financial statements. This calculation is done after subtracting all eligible deductions and excluding income that is exempt from taxation. Foreign taxes paid can also be deducted from the profit stated in the financial statement. The taxable income is determined as the net profit remaining after all deductions. Corporate tax at 9% is applicable only if the taxable value exceeds AED 375,000. To calculate your corporate tax, use online corporate tax calculator. It will estimate your corporate tax liability.

If an individual or entity classified as an Exempt Person no longer fulfills the necessary criteria for exemption, they typically lose their exempt status starting from the Tax Period in which the criteria are no longer met. Consequently, they become liable for Corporate Tax on all their Taxable Income.

However, in specific temporary and unforeseen situations, the individual or entity has the option to apply to the FTA. They can seek permission to maintain their Exempt Person status even if they temporarily fail to meet the exemption criteria.