FTA hosts awareness workshop on corporate tax for freezone persons

The Federal Tax Authority (FTA) successfully concluded an awareness workshop on Corporate Tax for Freezone Persons on Monday in Dubai, which marked a key milestone in the second phase of the FTA’s nationwide Corporate Tax Awareness Campaign.

The campaign is aimed at providing valuable insights into the Corporate Tax regime and specifically considering various topics, such as Freezone Persons subject to Corporate Tax.

In a press statement on Monday, the FTA highlighted that this workshop a testament to its dedication to providing Freezone Persons with the knowledge and resources they need to navigate the UAE’s Corporate Tax regime successfully.

The FTA reaffirmed its commitment to supporting Freezone Persons and highlighted the crucial role of Free Zones in driving sustainable economic growth and innovation in the UAE.

Freezones are vital to the UAE’s economic diversification strategy, and the FTA is committed to ensuring their continued growth and contribution to the national economy by making tax compliance as seamless as possible. The FTA is committed to providing the necessary support and resources to ensure that Free Zone Persons can meet their tax obligations efficiently.

As part of its efforts to clarify the Corporate Tax legislation for Free Zone Persons, the FTA has provided a dedicated Corporate Tax Guide for Free Zone Persons on its website, with comprehensive information and practical examples to enhance understanding.

During the workshop, the FTA emphasised that Qualifying Free Zone Persons can benefit from a 0 per cent Corporate Tax rate on their Qualifying Income under the UAE Corporate Tax regime.

However, all Free Zone Persons must register for Corporate Tax, regardless of whether they are a Qualifying Free Zone Person or not.

The 0 per cent rate applies specifically to Qualifying Income, which has specific conditions that need to be met as outlined by the FTA. Income that does not meet the “Qualifying Income” conditions will be taxed at the standard Corporate Tax rate of 9 per cent.

The workshop offered a comprehensive explanation of the Corporate Tax regime for Free Zone Persons, the conditions for qualifying for the 0 per cent tax rate, and the requirements for income to be classified as “Qualifying Income”.

The FTA representatives discussed Qualifying Activities, Excluded Activities, guidance on calculating tax liabilities for Free Zone Persons, and the procedures for fulfilling their Corporate Tax obligations, including registration and filing their Corporate Tax Returns.

The FTA also clarified that Resident juridical persons with Licences issued in July, regardless of the issuance year, must submit their registration applications by 30 September 2024.

Corporate Tax registration is accessible 24/7 through the “EmaraTax” platform, allowing users to complete the process in just a few minutes. Taxable Persons can also get help from certified Tax Agents for Corporate Tax on the FTA’s website. Additionally, the FTA has expanded submission channels for registration applications through government service centres throughout the UAE.

The FTA has shown strong support for businesses transitioning to the Corporate Tax regime by hosting 40 events in the first half of 2024 which is a 135.29 per cent increase from the previous year. These initiatives engaged over 8,220 participants, reflecting a 9.23 per cent year-on-year rise in engagement, with 97.5 per cent of attendees expressing satisfaction with the FTA initiatives.

The Federal Tax Authority was established by Federal Decree-Law No. (13) of 2016 to help diversify the national economy and increase non-oil revenues in the UAE through the management and collection of federal taxes based on international best practices and standards, as well as to provide all means of support to enable taxpayers to comply with the tax laws and procedures.

Since its inception in 2017, the FTA has been committed to cooperate with the competent authorities to establish a comprehensive and balanced system to make the UAE one of the first countries in the world to implement a fully electronic tax system that encourages voluntary compliance, with simple procedures based on the highest standards of transparency and accuracy – beginning from registration, to the submission of tax returns, to the payment of due taxes through the Authority’s website.

Meanwhile the Federal Tax Authority has urged Resident Juridical Persons with licences issued in July, irrespective of the year of issuance, to promptly submit their Corporate Tax registration application no later than 30th September 2024 to avoid administrative penalties.

In a press statement issued today, the FTA advised taxable persons to adhere to the timelines specified in FTA Decision No. 3 of 2024 on the timeline for the registration of taxable persons for Corporate Tax under Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses and its amendments, which came into effect on 1st March 2024.