A Guide to Corporate Tax Registration of Joint Stock Companies & Private Shareholding Companies in UAE

15Jan, 24

A Guide to Corporate Tax Registration of Joint Stock Companies & Private Shareholding Companies in UAE

In the evolving environment of UAE, investors from around the world see great potential in setting up their businesses. UAE’s business friendly environment has led to its emergence as a global business hub. Entrepreneurs willing to start their businesses in the UAE need to undergo a corporate tax registration process. Joint stock companies and private shareholding companies must register themselves according to the law. They also need to understand the rules and regulations imposed by the government of UAE to carry out their business activities in the country. In this blog, we will explore the complexities involved in corporate tax registration required for joint stock companies and private shareholding companies in UAE.

What is a Joint Stock Company?

A joint stock company is a type of business owned by multiple shareholders or stockholders. The owners of such businesses possess part of the shares or stock and benefit from limited liability. The amount that investors have invested in the company determines how much of the debts and obligations they are responsible for. A board of directors oversees joint stock companies and makes important decisions. Shares of Public Joint Stock Companies are easily transferable via the stock exchange. 

What is a Private Shareholding Company?

A private shareholding company is a company which is owned by a smaller group of people. Unlike public companies, these companies do not offer their shares for public trading. A limited number of individuals own the shares of such companies. These shareholders further own the company and solely contribute to the decision-making of the company.

Corporate Tax Registration for Joint Stock Companies

One of the striking features of the joint stock company is that its shares are traded publicly in the market. In order to conduct its operations smoothly and effortlessly, joint stock companies need to undergo the process of corporate tax registration. EmaraTax is an online business tax portal that the FTA developed to guarantee a smooth corporate tax registration process. It serves as a one-stop shop for corporate tax registration, tax return filing, and all other corporate tax-related activities in the United Arab Emirates. Mentioned below are the key steps involved in the corporate tax registration of these companies:

Determining Taxable Presence

JSCs must first determine their taxable presence in the UAE in order to proceed with the corporate tax registration process. Tax obligations may arise from trading, manufacturing, and certain service-related activities.

Document Preparation

In order to initiate the corporate tax registration procedure, JSCs must gather a number of essential documents, such as their financial statements, shareholder details, and constitutional documents. The foundation for tax authorities' assessment of the company's financial status is provided by these documents.

Engaging with Tax Advisors

Working with tax advisors is essential because of the complex corporate tax laws. These experts provide JSCs with invaluable insights. These insights enable them to maximize tax structures and guarantee seamless compliance with the constantly changing tax environment. Dhanguard can assist and guide you efficiently to get your JSC registered.

Submission of Application

When the necessary paperwork is ready, JSCs apply to the Federal Tax Authority (FTA) for corporate tax registration. The company's operations, financial situation, and other relevant information are described in this comprehensive application.

Receipt of Tax Registration Number (TRN)

The FTA provides the JSCs with a Tax Registration Number (TRN) after successful verification. To participate in a variety of tax-related activities, such as filing returns and meeting reporting obligations, you must have this unique identification.

Creation of EmaraTax Account for Business Tax

You need to follow the steps given below to create an account on EmaraTax:

  • Go to the tax portal

  • New users have the option to sign up whereas the existing users can log in by using their password..

  • To complete the registration process you need certain documents like- Trade license, Passport copy, Emirates ID and proof of authorization.

Business Tax Registration for Joint Stock Companies & Private Shareholding Companies via online platform

  • Once the account is created, the user can log in to the portal.

  • Proceeding further, the user needs to select the relevant “taxable person” profile.

  • After selecting the corporate tax option, users should go through the guidelines carefully.

  • After going through the guidelines, users should click on the “start” option to initiate the corporate tax registration process.

  • Registration process starts with providing information regarding Entity Type, Entity Subtype, Country of Registration, Incorporation date, and Corporate Tax Period.

  • This follows the option to choose between “Legal Person - UAE Public Joint Stock Company” and “Legal Person - UAE Private Company”

  • Further the user needs to add the type of business activity, provide the details of all the shareholders or owners who have at least 25% ownership and contact details of the business.

  • Once all the above mentioned steps are taken care of, you need to submit the application and proceed further.

Ongoing Compliance and Reporting

After registering for corporate tax, PSHCs and JSCs are required to maintain continuous compliance and reporting requirements. This includes keeping up-to-date financial records, paying taxes on time, and filing tax returns on a regular basis. If these requirements are not met, there may be fines and legal repercussions.

Conclusion

Managing corporate tax registration in the United Arab Emirates necessitates an in-depth knowledge of the regulations and strict adherence to them. In today’s business world, Joint Stock Companies and Private Shareholding Companies are crucial, and maintaining their long-term feasibility depends on compliance with corporate tax regulations. Businesses can guarantee a smooth corporate tax registration process and continuous compliance with the changing tax policies in the United Arab Emirates by adhering to the specified procedures and getting expert advice. For businesses looking to prosper in the UAE's dynamic environment, being responsive and knowledgeable about changes in the business environment will be essential. Dhanguard will assist you with the entire process of corporate tax registration. Contact us today to get your registration done with minimal ease.