UAE CORPORATE TAX DEADLINES: WHAT YOU NEED TO KNOW

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

Specific Corporate Tax Registration Exemptions

·        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:

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:

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