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Corporate Tax Registration in the UAE: Timelines and Implications
The UAE’s Federal Tax Authority (FTA) has issued a pivotal decision outlining the new registration timelines for corporate taxes, marking a significant step in the nation’s tax administration landscape. This decision is crucial for all businesses operating within the UAE, as it sets forth the registration obligations under the newly established corporate tax regime. Here’s a detailed breakdown of what this means for businesses and how they can comply with the new regulations.
Corporate Tax Registration in the UAE
Understanding the FTA’s Latest Decision
The FTA’s decision is based on a bunch of important laws and rules. These include the country’s main laws, special laws about taxes, and other decisions made by the government that explain how businesses are categorized, how foreign businesses are connected to the country, and what fines are given for breaking the rules.
Key Registration Timelines
For businesses based in the UAE, the FTA has set various deadlines to register for taxes, depending on when they got their business licenses, with these deadlines falling between May 31, 2024, and December 31, 2024. Businesses that are set up after the decision’s effective date have three months from when they start to register.
Businesses in the UAE including free zones, were established before March 1, 2024, tax registration by the deadlines shown in the following table:
Date of Licence issuance irrespective of year of issuance | Deadline for submitting a Tax Registration application |
|---|---|
1 January – 31 January | 31 May 2024 |
1 February – 28/29 February | 31 May 2024 |
1 March – 31 March | 30 June 2024 |
1 April – 30 April | 30 June 2024 |
1 May – 31 May | 31 July 2024 |
1 June – 30 June | 31 August 2024 |
1 July – 31 July | 30 September 2024 |
1 August – 31 August | 31 October 2024 |
1 September – 30 September | 31 October 2024 |
1 October – 31 October | 30 November 2024 |
1 November – 30 November | 30 November 2024 |
December – 31 December | 31 December 2024 |
If a business does not have a license at the effective date of this decision | (3) three months from the effective date of this decision |
Businesses in the UAE including free zones, were established on or after March 1, 2024, tax registration by the deadlines shown in the following table:
Category of businesses | Deadline for submitting a Tax Registration application |
|---|---|
A business is set up or recognized under the local UAE laws, including those in Free Zones | (3) three months from the date of
incorporation, establishment or
recognition |
A business that is set up or recognized under the laws of another country but is effectively managed and controlled in the UAE | (3) three months from the end of the
financial year of the business |
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Tax Registration for Businesses Not Based in the UAE
Businesses not based in the UAE but with a permanent location or significant business activities there need to meet different registration deadlines. These deadlines are important to avoid fines and follow UAE’s tax rules.
Foreign businesses operating in the UAE before March 1, 2024, must apply for tax registration following the deadlines in the provided table:
Category of businesses | Deadline for submitting a Tax Registration application |
|---|---|
A business with a permanent location in the UAE | (9) nine months from permanent location in the UAE is established |
A business with significant activities or presence in the UAE | (3) three months from the effective
date of this decision |
Foreign businesses operating in the UAE on or after March 1, 2024, must apply for tax registration following the deadlines in the provided table:
Category of businesses | Deadline for submitting a Tax Registration application |
|---|---|
A business with a permanent location in the UAE | (6) six months from permanent location in the UAE is established |
A business with significant activities or presence in the UAE | (3) three months from when the significant business activities or presence in the UAE is established. |
Tax Registration Timeline for Individuals in the UAE
Individuals running their own businesses in the UAE need to register for corporate tax. The deadlines for this registration depend on whether they are based in the UAE or not and their business activities. It’s crucial for these individuals to be aware of these deadlines to stay compliant and avoid any fines.
For individuals running a business in the UAE, they need to apply for tax registration according to the following:
Category of businesses | Deadline for submitting a Tax Registration application |
|---|---|
An individual or business based in the UAE that has a turnover exceeding the specified limit in any year from 2024 onwards | Register for tax by March 31 of the following year. |
An individual or business not based in the UAE but conducting business activities there, and whose turnover exceeds the specified limit in any year from 2024 onwards | (3) months from when they meet this threshold |
Penalties for Late Registration
The FTA’s rule includes strict penalties for not following the rules. If businesses don’t register on time, they will have to pay a fine of Dh10,000. This is to make sure businesses take tax registration seriously and do it on time, just like they should for other taxes like excise tax and VAT.
A new rule, Cabinet Decision No. 10 of 2024, changes the fines and rules for breaking tax laws. It shows that the UAE government is serious about making sure businesses register for corporate tax. This new rule starts on March 1, 2024, and it outlines the tax rules that businesses need to follow.
Implications for Businesses
This decision signifies a structured approach to implementing the corporate tax framework in the UAE. Businesses must closely review their obligations and prepare accordingly to meet the new registration deadlines. Compliance not only ensures adherence to the UAE’s tax laws but also demonstrates a commitment to transparent and responsible business practices.
The FTA’s decision marks a significant shift in the UAE’s tax regulations, affecting businesses both locally and internationally. It’s crucial for companies to understand and comply with these new corporate tax registration deadlines to adhere to legal requirements and ensure their success in the UAE’s dynamic economy. By staying informed and proactive, businesses can navigate these changes smoothly, fulfill their tax obligations, and contribute to the nation’s economic development without facing penalties.
How Can Choose UAE Help
At Choose UAE, we’re dedicated to helping you fully comply with these tax rules and avoid any possible fines. We provide an end-to-end service that simplifies the tax application process for you, needing only 4 documents. Our team takes care of everything, making the process easy and efficient, so you can focus on running your business without worries. Don’t risk fines and stay informed by arranging a Corporate Tax consultation with our tax experts today.
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