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Deadlines for UAE Corporate Tax registrations explained: When, how Dh10,000 fine applies

Deadlines for UAE Corporate Tax registrations explained: When, how Dh10,000 fine applies
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Authorities in the UAE have specified deadlines for businesses to submit their Corporate Tax registration applications.

Effective from March 1, 2024, the Federal Tax Authority (FTA) decision has spelt out timeframes for each segment of taxable entities or persons to register and avoid violating tax laws.

According to the Ministry of Finance, an administrative penalty of Dh10,000 applies for late registrations. Here is all you need to know.

What are the new deadlines for Corporate Tax registrations?

– Resident juridical persons (organisations) incorporated, established, or otherwise recognised prior to March 1, 2024.

Nishant Rayma, partner, RMC Tax Consulting, said the registration deadlines are structured based on the original month of incorporation for businesses, irrespective of the year.

Month of licence issuanceDeadline
January or FebruaryMay 31
March or AprilJune 30
MayJuly 31
JuneAugust 31
JulySeptember 30
August or SeptemberOctober 31
October or NovemberNovember 30
DecemberDecember 31
“This uniform application means that deadlines are consistent for businesses established in the same months, regardless of their incorporation year,”

said Rayma.

The FTA decision states that if a juridical person does not have a licence by March 1, 2024, they must apply to register within three months — that is, May 31, 2024.

According to the FTA, if an entity has more than one licence, the one with the earliest issuance date shall be used.

– Resident juridical persons (organisations) incorporated, established, or otherwise recognised after March 1, 2024.

For new resident businesses incorporated after March 1, the registration deadline is “mostly” three months from the date of incorporation, Rayma said.

Here are the deadlines as specified by the FTA:

  • A person that is incorporated or recognised under the applicable legislation in the UAE, including a free zone person: Three months from the date of incorporation, establishment or recognition.
  • A person that is incorporated or recognised under the applicable laws of another country or foreign jurisdiction: Three months from the end of the financial year of the person

– Non-resident juridical person prior to March 1

  • A person that has a permanent establishment in the UAE: Nine months from the date of existence.
  • A person that has a nexus in the UAE: May 31

– Non-resident juridical person after March 1

  • A person that has a permanent establishment in the state: Six months from the date of existence
  • A person that has a nexus in the state: May 31

– Natural persons (individuals operating in their personal capacity)

According to Rayma, the deadline for resident natural persons with a turnover exceeding Dh1 million is March 31 of the subsequent year, while non-resident natural persons must register within three months of meeting the requirements of being subject to tax.

When and how does the fine apply?

Administrative penalties will be imposed on taxable persons who do not submit their registration applications for Corporate Tax within the timeframes specified in the FTA’s Decision for each segment.

Arun Gurung, regional finance director at Sovereign Corporate Services Dubai, advised businesses to consider this update carefully “so they are ready to meet the relevant deadlines and avoid late registration penalties of Dh10,000”.

News Source: Khaleej Times

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