Corporate Tax Guide - Part 2 - Taxable Person

Streamline Your Corporate Tax Return Submission with EmaraTax

Filing your Corporate Tax Return can be a seamless experience with EmaraTax, thanks to its pre-population feature. As a Taxable Person registered for Corporate Tax purposes, some essential details will be automatically filled in your Tax Return, making the process more efficient and reducing manual data entry. Here's what you need to know:

Reviewing Pre-Populated Information

When you access your Corporate Tax Return on EmaraTax, you will notice several fields already filled based on the information provided during your tax registration. It's essential to carefully review these details to ensure their accuracy. The pre-populated information includes:

• Taxable Person Name (in both English and Arabic)

• Tax Registration Number (TRN) for Corporate Tax

• Address Details, such as country, address line, city, country code, landline number, mobile number, email ID, and P.O. Box

• Tax Period

• Primary Business

• Type of Taxable Person

What to Do Next?

1. Confirm Accuracy: If all displayed details are accurate, simply click the confirmation box and proceed.

2. Correct Any Errors: If you spot inaccuracies, you will be directed to your EmaraTax profile to update your account details. Keep in mind that updates are subject to approval by the Federal Tax Authority (FTA). However, you can still continue with your Tax Return submission while waiting for the approval.

Personalized Tax Return Experience

EmaraTax customizes your Tax Return based on the pre-filled details. Fields that do not apply to your business type will be automatically excluded, simplifying your tax filing process further.

Fields Relevant to Natural Persons:

1. Partner in Unincorporated Partnerships: If you are a partner in an unincorporated partnership, answer ‘Yes.’ The FTA’s approval status does not affect this answer.

2. TRN of Unincorporated Partnership(s): Provide the Tax Registration Numbers (TRNs) of any unincorporated partnerships you're involved with, as they must register for Corporate Tax.

3. Turnover from Business Activities: Report your total gross income (excluding employment and personal investments) from business activities in the UAE during the calendar year.

4. Accounting Basis (Cash or Accrual): Choose ‘Cash’ or ‘Accrual’ based on your accounting method. You may select 'Cash' if your revenue is below AED 3 million or in exceptional cases after FTA approval.

5. Multiple Businesses or Activities: This pre-populated question asks if you conduct more than one business. You can edit it for reporting purposes.

6. Number of Businesses or Activities: If you indicated multiple businesses, this pre-populated question will appear, which you can adjust.

7. List of All Businesses and Activities: The list from your registration will be shown. You can add more businesses if necessary.

8. Revenue Percentage by Sector: Report the percentage of income from each business sector, ensuring the total adds up to 100%.

9. Tax Residency Status: Natural persons are generally considered UAE tax residents if they conduct business in the UAE. Non-residents may be identified based on their residency status under a Double Taxation Agreement (DTA) or if they conduct business through a Permanent Establishment exceeding AED 1 million in turnover.

10. Tax Residency under DTA: If you're a Non-Resident, select your country of tax residency based on the relevant DTA.

Fields for Juridical Persons:

Questions relevant to juridical persons are separated from those for natural persons, Free Zone Persons, Unincorporated Partnerships, and Tax Groups. Key questions include:

1. Multinational Enterprise (MNE) Group Membership: Answer ‘Yes’ if part of an MNE Group with over AED 3.15 billion in revenue.

2. Partnership in Unincorporated Partnerships: Answer ‘Yes’ if involved in any unincorporated partnerships, whether or not registered for Corporate Tax.

3. TRN for Unincorporated Partnerships: Provide the TRN for each partnership if applicable.

4. Government or Extractive Business: Answer whether the entity is a Government Entity or involved in extractive/non-extractive businesses.

5. Business Activity: Confirm if the entity has conducted a taxable business activity.

6. Revenue: Report total revenue from all sources.

7. Financial Statements: Specify whether financial statements are prepared on a cash or accrual basis.

8. Multiple Businesses: Indicate if the entity conducts multiple businesses or activities.

9. Business Sectors: Provide the percentage of revenue from each business sector.

10. UAE Incorporation: Confirm if the entity is incorporated or recognized under UAE or Free Zone laws.

11. Tax Residency: State whether the entity is tax-resident in the UAE or another jurisdiction, based on applicable Double Taxation Agreements (DTAs).

12. Non-Resident Status: Answer if the entity is considered non-resident for Corporate Tax purposes.

Each section ensures compliance with UAE corporate tax laws, helping to identify the tax obligations based on the entity's structure and activities.

Fields for Free Zones:

1. Incorporation in a Free Zone: Answer ‘Yes’ if the entity is incorporated, established, or registered in a Free Zone, or has a branch in a Free Zone.

2. Election to Forego Corporate Tax Rate: Answer ‘Yes’ if the entity elects to not be subject to the 0% Corporate Tax rate for Qualifying Free Zone Persons, opting for standard tax rates instead.

3. Qualifying Free Zone Person Status: If you’ve opted for the 0% rate, confirm if the entity meets the criteria for a Qualifying Free Zone Person. If ‘Yes,’ proceed to the Free Zone schedule; if ‘No,’ the 0% rate does not apply for the current and next 4 Tax Periods.

Fields for Unincorporated Partnerships Treated as Separate Taxable Persons:

1. MNE Group Membership: Answer ‘Yes’ if the entity is part of a Multinational Enterprise Group with revenue of AED 3.15 billion or more.

2. Partnership Status: Answer ‘Yes’ if the entity is a partner in one or more Unincorporated Partnerships, regardless of FTA approval.

3. TRN of Partnerships: Provide the Tax Registration Number (TRN) for each Unincorporated Partnership the entity is a partner in.

4. Revenue: Enter the total gross income from all sources for the tax period.

5. Accounting Method: Specify whether the financial statements use Cash or Accrual accounting based on revenue or special circumstances.

6. Multiple Businesses or Activities: Answer ‘Yes’ or ‘No’ if the entity conducts more than one business or activity.

7. Number of Businesses/Activities: If applicable, indicate how many businesses or activities the entity conducts.

8. List of Businesses/Activities: View or add businesses and activities as per registration data.

9. Revenue Breakdown by Sector: Estimate the percentage of total revenue for each business sector, ensuring the total equals 100%.

Fields for Tax Groups:

1. MNE Group Membership: Answer ‘Yes’ if any member of the Tax Group is part of a Multinational Enterprise Group with a consolidated revenue of AED 3.15 billion or more.

2. Partnership Status: Answer ‘Yes’ if any member of the Tax Group is a partner in one or more Unincorporated Partnerships.

3. TRN of Partnerships: Provide the TRNs of all Unincorporated Partnerships in which any Tax Group member is a partner.

4. Revenue: Enter the consolidated revenue of the Tax Group, excluding internal transactions between group members.

5. Accounting Method: Indicate whether the Tax Group uses Cash or Accrual accounting, based on consolidated revenue or exceptional circumstances.

6. Multiple Businesses or Activities: Answer ‘Yes’ or ‘No’ if the Tax Group conducts more than one business or activity.

7. Number of Businesses/Activities: If applicable, enter the number of businesses or activities conducted by the Tax Group during the tax period.

8. List of Businesses/Activities: View or add businesses and activities as per the registration data.

9. Revenue Breakdown by Sector: Estimate the percentage of total revenue for each business sector, ensuring the total equals 100%.

In conclusion, understanding the various fields related to taxable persons, Free Zones, Unincorporated Partnerships, and Tax Groups is crucial for accurate and compliant corporate tax filing. The complexities of each category require careful assessment to ensure that businesses are meeting their tax obligations while maximizing potential benefits, such as the 0% Corporate Tax rate for Free Zone entities. At ALWAHAT ACCOUNTS AND INTERNAL AUDIT SERVICES, we are committed to guiding you through the correct assessment and filing process, ensuring that your business remains compliant with UAE tax laws while optimizing your tax position. Let us help you navigate the complexities of tax filing, providing peace of mind and support every step of the way.