16 May 2024
Manasi Dicholkar
In a significant
shift from the previous schedule, the Federal Tax Authority (FTA) of the United
Arab Emirates has expedited the corporate tax registration deadlines for all
enterprises. On 22 February 2024, the FTA issued Decision No. 3 of 2024,
setting the new UAE Corporate Tax registration deadlines. These deadlines
depend on the taxable person's residency status and the month their business
license was issued.
Dubai: The new deadlines are now set throughout the year 2024, a move
that impacts all firms irrespective of their initial licensing year.
Previously slated
for September 2025, the updated deadlines now require the first group of firms
to register no later than May 31, 2024, with a final deadline for all companies
by the end of December 2024. This revision is aimed at preventing the
anticipated last-minute registration rush and facilitating smoother
administrative operations.
Critical
Implications for Businesses: The implications of
missing these new deadlines are severe, with non-compliant companies facing
hefty fines of up to AED10,000 as per the Cabinet Decision No. 10 of 2024 which
enforces a stringent administrative penalty on enterprises defaulting to
register. The FTA has made it clear that there will be no grace periods, and
penalties will be enforced immediately after a missed deadline.
Failure to register
for CT by the deadline can result in administrative penalties. The exact
penalty amount depends on the taxable person's category and the duration of
non-compliance
·
Government entities and government-controlled entities that are listed in
a cabinet decision are automatically exempt.
·
Exempt if the Ministry of Finance is notified (and provided certain
requirements are met): Natural resource businesses that are both extractive and
non-extractive
·
If included in a Cabinet Decision: Entities that qualify as Public
Benefit Entities
·
Subject to compliance with specific requirements, exempt if submitted to
and accepted by the Federal Tax Authority: Public or private pension and social
security funds, qualified investment funds, wholly-owned and controlled UAE
subsidiaries of government entities, government-controlled entities, qualified
investment funds, or public or private pension and social security funds
· Public or private pension and social security funds, Qualifying Investment Fund, Wholly-owned and controlled UAE subsidiaries of a Government Entity, a Government Controlled Entity, a Qualifying Investment Fund, or a public or private pension or social security fund
Corporate Tax Registration Deadlines for Resident Companies
The Corporate Tax Registration
application deadline will be determined by the issuance date of the resident
UAE business license. Businesses having their licenses issued between 1 January
and 31 January must submit their applications by 31 May 2024. The deadlines are as
per the below table:
Trade license issue date |
Corporate Tax registration
deadline |
1 January to 31 January |
31 May 2024 |
1 February to 28/29 February |
31 May 2024 |
1 March to 31 March |
30 June 2024 |
1 April to 30 April |
30 June 2024 |
1 May to 31 May |
31 July 2024 |
1 June to 30 June |
31 August 2024 |
1 July to 31 July |
30 September 2024 |
1 August to 31 August |
31 October 2024 |
1 September to 30 September |
31 October 2024 |
1 October to 31 October |
30 November 2024 |
1 November to 30 November |
30 November 2024 |
1 December to 31 December |
31 December 2024 |
Where no License exists at the effective date of this
Decision |
Three months from the effective date of this Decision |
Corporate Tax Registration Deadlines for Non-Resident Companies
For Non-resident juridical persons, the deadlines for Tax Registration vary based on their circumstances:
Non-resident persons with a Permanent Establishment (PE) in the UAE:
Before 1 March 2024: They must apply within 9 months from the PE's establishment date.
On or after 1 March 2024: The deadline is 6 months from the PE's establishment date.
Non-resident persons with a nexus in the UAE:
Before 1 March 2024: They should apply within 6 months from the establishment of the nexus.
On or after 1 March 2024: The deadline is 3 months from the establishment of the nexus.
Corporate Tax Registration Deadlines for Natural Persons
The Decision outlines that individuals engaged in Business or Business Activities in the UAE, and surpassing the AED 1 million threshold, are required to submit a Tax Registration application by specific deadlines:
For Resident Persons, the deadline is 31 March of the following Gregorian calendar year in which the Business or Business Activities occurred.
Non-Resident Persons must apply within three months from the date they become subject to tax requirements.
In Conclusion
Corporate tax registration in the UAE is mandatory for all eligible entities and individuals operating within the country. The Decision took effect on 1 March 2024. The FTA's revamped deadlines are a strategic step towards enhancing the tax system's efficiency and reliability. Companies are urged to adjust their compliance strategies promptly to adhere to the new schedule and ensure smooth operations in the coming fiscal years.
ALKETBI TOUCH:
ALKETBI team is highly skilled and frequently provides legal assistance specializing in assisting companies being compliant with the latest laws and their executive regulations especially in the taxation field. If you would like to know more or request further guidance with relation to the new media law, Let us know!
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