UAE Corporate Tax: Small businesses must register even if they are running losses

UAE Corporate Tax: Small businesses must register even if they are running losses

Dubai: Now that the UAE’s first full-year corporate tax period has started, businesses must ramp up their auditing processes – and most important, be sure to register with the Federal Tax Authority on the compliance side.

It doesn’t matter whether the business is relatively new or has been making losses. They need to register irrespective of whether their annual profit is above or below the Dh375,000 threshold.

“There still seems to be doubts among some SME owners that corporate tax registration can wait until their profits approach the Dh375,000 profit mark,” said a tax consultant. “They are wrong.”

The registration process for corporate tax has been open since June last year. Under the UAE rules, businesses that observe the calendar year as their financial year will be paying their 2024 corporate tax by September of 2025.

There is ‘Small Business Relief’

“Businesses are required to prove eligibility – they must submit tax returns and keep necessary records,” said Naqash Ahmed, Managing Director at Dubai-based Capital Plus consultancy. “If they don’t meet the Dh375,000 profit level, eligible taxable persons (i.e., business owners) can elect for the ‘Small Business Relief’ on their tax return.

“Once this selection has been made, they will