Business License, Tax ID and Patent Tax Explained

New businesses often hear these three terms. Each one has a different purpose.

Business registration and license

Registration with the Ministry of Commerce creates your legal entity. Some activities also need a sector license from the relevant ministry, such as health, education, tourism, finance or food.

Tax identification number (TIN)

You register with the General Department of Taxation to receive your tax identity. You use it for tax filings, invoices and customs declarations.

Patent tax

This is an annual business tax paid by enterprises. The amount depends on your business type and size. It is normally paid once a year, and there is a deadline with penalties for late payment.

Tax regimes

Businesses are generally classified into regimes depending on turnover: a simplified approach for small businesses and a real regime for larger ones, which requires full accounting.

Basic steps

1. Register the business
2. Register for tax and obtain your TIN
3. Get any required sector license
4. Pay the patent tax each year
5. File monthly and annual tax returns as required

Tips

• Keep invoices and receipts organized from day one
• Use an accountant if you are not sure which regime applies
• Put the filing deadlines in a calendar

Rates, thresholds and deadlines change. Confirm them with the General Department of Taxation.