The FTA recently issued a Public Clarification. It aims to clarify corporate tax registration timelines for businesses. However, the guidelines can still be unclear without the right explanation.
This blog post will simply explain the key points of the clarification. Our goal is to help anyone grasp their obligations. We’ll address common questions and provide real-life examples. By the end, you’ll feel confident about following the rules on time.
Key Details for Resident Companies
The clarification specified timelines for different entity types. Let’s look more closely at resident companies:
Existing Companies
If your company was set up before March 2024, the deadline depends on your business license issue month. The FTA grouped months together to create clear windows.
For example, if you received your license in January 2023, you must register by January 31, 2024. This ensures everyone applies according to a standardized schedule.
Companies without Licenses
What if your business doesn’t yet have a formal license? In this case, the clarification grants a buffer until May 31, 2024 to complete registration. This provides extra time for compliance.
Newly Formed Companies
Any resident company established on or after March 1, 2024 must apply within 3 months of registration/inception. This shorter window reflects your recent formation date.
Key Details for Non-Resident Entities
Non-resident companies and individuals have different considerations under the guidelines:
Pre-March 2024
If you qualified as a non-resident prior to March 2024 due to a UAE permanent establishment, the deadline is 9 months from the date your PE existed. This considers the stage of your local operations.
Post-March 2024
For non-resident companies formed afterward, the window is 6 months from the PE creation date.
Businesses with Connections Only
A May 31, 2024 cutoff applies if you solely had a business “nexus” to the UAE before March 2024.
Understanding Deadlines
Let’s look more closely at two key deadline examples:
Example 1
A resident company received its license in June 2023. According to the public clarification, this business must register by June 30, 2024 at the latest.
Example 2
A non-resident firm established a permanent UAE office in September 2024. It then has until March 2025 (6 months afterward) to complete the registration process.
Providing real scenarios helps interpret the guidelines more clearly. Deadlines aim to standardize compliance.
Common Questions
The clarification addressed frequent concerns, but uncertainty still exists. Let’s explain further:
What if the Original Deadline Was Missed?
While a 10,000 AED penalty applies, prioritizing current registration is most important. Honestly explain any delay to limit further issues down the road.
Will Timelines Ever Change?
There’s no mention of future extensions now. But keep an eye out in case the FTA announces updates. It’s always safer to adhere to present rules.
How Can I Verify My Deadline?
If unsure, re-check the section relevant to you. Note periods are based on objective dates like license/formation rather than vague terms.
What Should I Do if Penalized?
Carefully review the charge and promptly pay to demonstrate compliance. You can also request reconsideration by clearly detailing your case to responsible departments.
Conclusion
We hope this in-depth explanation simplified the Public Clarification’s important guidelines. Please contact us or a professional for help interpreting your own situation. Registering properly is the best way to satisfy your ongoing obligations.
FAQs
A. Not under current rules. Monitor FTA announcements in case policies change. For now, apply before the dates provided.
A. The FTA website lists all necessary forms. Make sure to provide all requested information clearly to avoid delays.
A. No, this clarification only relates to corporate tax deadlines. VAT has separate compliance procedures published by the FTA.
