The Federal Tax Authority (FTA) recently issued a new Decision outlining specific deadlines for businesses to register for Corporate Tax in the UAE. This decision, effective March 1, 2024, aims to ensure timely compliance with the Corporate Tax Law (Federal Decree-Law No. 47 of 2022) and avoid potential penalties.
- Specified Timeframes for Corporate Tax Registration: The FTA has introduced clear deadlines that businesses must adhere to when registering for corporate tax. Companies should ensure they complete their tax registration within the newly specified timeframes to avoid penalties.
- Who Needs to Register?All businesses operating within the UAE that meet the taxable income threshold are required to register for corporate tax. The new decision emphasizes timely compliance for businesses to align with the country’s fiscal policies.
Key Deadlines for Corporate Tax Registration
The new Decision categorizes businesses (Taxable Persons) based on their resident/non-resident status and date of establishment/license issuance. Here’s a breakdown of the registration deadlines for each category:
- Resident Juridical Persons (incorporated before March 1, 2024):
Month of License Issuance | Deadline for Registration |
January or February (any year) | May 31, 2024 (Important! Avoid penalties) |
March or April | June 30, 2024 |
May | July 31, 2024 |
June | August 31, 2024 |
July | September 30, 2024 |
August or September | October 31, 2024 |
October or November | November 30, 2024 |
December | December 31, 2024 |
Implications for Non-Compliance
Failure to adhere to the prescribed timeframes for corporate tax registration can lead to substantial penalties, including:
- Finesfor late registration.
- Additional feesimposed for non-compliance.
- Potential delays in conducting business operations due to tax-related restrictions.
What Businesses Need to Do Now
Businesses must immediately assess their corporate tax obligations and begin preparing for registration if they haven’t already. It is recommended that companies:
- Review the latest FTA guidelinesto ensure full understanding of the deadlines and requirements.
- Consult with tax professionalsto avoid errors during the registration process.
- Ensure timely submission of all necessary documents to avoid penalties.
Important Notes:
The FTA emphasizes registering by the specified deadlines, especially for those with licenses issued in January and February (regardless of the year). Failing to do so might result in penalties as outlined in Cabinet Decision No. 75 of 2023.
Juridical persons established before March 1, 2024, without a license, must register within three months (by May 31, 2024).
If a company holds multiple licenses, the deadline is based on the earliest license issuance date.
Resident Juridical Persons (established on or after March 1, 2024):
These entities, including those in Free Zones, need to register within three months of incorporation/establishment.
Non-Resident Juridical Persons:
Businesses with a Permanent Establishment (PE) in the UAE before March 1, 2024, have nine months to register from the date of PE establishment.
Non-resident entities with a “nexus” in the UAE (e.g., deriving income from the UAE) must register by May 31, 2024.
Those establishing a PE or nexus on or after March 1, 2024, have six and three months, respectively, to register.
Natural Persons (Business Owners):
- Resident individuals conducting business activities exceeding the Turnover threshold of AED 1 million in 2024 must register by March 31, 2025.
- Non-resident individuals exceeding the Turnover threshold in 2024 or subsequent years need to register within three months of fulfilling the Taxable Person criteria.
EmaraTax Platform – Simplified Registration
The FTA offers a convenient 24/7 online registration process through the EmaraTax digital platform. The process typically takes around 30 minutes and involves four steps. Existing VAT or Excise Tax registrants can leverage their existing EmaraTax accounts to complete Corporate Tax registration. New users can easily create accounts on the FTA’s e-Services portal (https://eservices.tax.gov.ae/).
Staying Informed and Avoiding Penalties
Businesses are advised to review the Corporate Tax Law, relevant guidelines, and the FTA Decision No. 3 of 2024 for a comprehensive understanding of their registration requirements. Timely registration ensures compliance and avoids potential penalties for late submissions. The FTA also conducts webinars to educate businesses on the registration process. By staying informed and utilizing the available resources, businesses can navigate Corporate Tax registration smoothly
