UAE Corporate Tax and VAT: Two Separate Checks for a New Company

Create two separate registration tasks

The FTA states that taxable persons must register for corporate tax under the applicable rules. Assess the company’s status and registration timeline even if you do not expect a tax payment immediately. Keep a record of the advice and the deadline identified for your business.

For VAT, assess the applicable registration criteria separately. A licence application, business bank account, or corporate tax registration should not be treated as completing that assessment.

Understand the VAT threshold carefully

For a UAE-resident business, mandatory VAT registration generally applies when taxable supplies and imports exceed AED 375,000 in the previous 12 months, or are expected to exceed that amount in the next 30 days. Non-resident rules differ. Use the FTA’s current guidance to assess your actual transactions.

This is not simply a question of how much cash is left in the bank. Ask your accountant how supplies and imports should be classified and how the rolling calculation will be monitored.

Do not infer tax treatment from a free zone licence

Free zone corporate tax treatment requires a separate review. The FTA publishes dedicated guidance for Free Zone Persons. Ask about the applicable status, conditions, and filing obligations rather than accepting “free zone” as a complete tax explanation.

VAT remains its own assessment. If a proposal relies on a special treatment, ask which rule supports it and which facts your company must satisfy.

Keep usable records from the start

Choose a bookkeeping process before the first invoices accumulate. Keep sales and purchase records, contracts, bank records, and formation expenses organised. Ask your adviser to define the records needed for each obligation and how long they must be retained.

Assign responsibility for monitoring thresholds, reviewing registration requirements, and tracking filing deadlines. A calendar with an owner and supporting documents is more useful than a reminder with no clear next action.

Questions for your accountant

• What registrations apply to this exact legal entity?
• Which deadlines apply and what evidence supports them?
• How will taxable supplies and imports be monitored?
• Does the proposed free zone treatment require additional checks?
• Who prepares, reviews, and submits each filing?

Read the UAE compliance guide for the wider context. This article is general information; obtain advice based on your business facts.

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