The Federal Tax Authority (FTA) has announced strict deadlines for companies in the UAE to register for corporate tax. All businesses need to comply to avoid facing significant penalties.
Understanding the New Mandates:
The FTA’s announcement delineates deadlines based on the initial month of license issuance. Businesses that obtained licenses in either January or February are required to complete their tax registration by May 31 2024. This requirement is outlined in the Federal Decree Law No. 47 of 2022 concerning the Taxation of Corporations and Enterprises which was implemented in June of the year and affects tax periods beginning from June 1 2023.
When Do You Need to Register?
The FTA has outlined quarterly tax registration deadlines based on when your trade license was issued:
| 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 |
| 1 December – 31 December | 31 December 2024 |
| Where a person does not have a Licence at the effective date of this Decision | (3) three months from the effective date of this Decision |
The FTA stated that the year the license was issued is irrelevant.
The FTA judgment states that those who do not have a license by March 1, 2024 must register for company tax within three months, on May 31, 2024.
Businesses operational before March 1, 2024 need to apply within the above timeframe applicable to their license date.
The Cost of Non-Compliance:
The Ministry of Finance has stated that if the registration deadline is missed there will be a fine of AED 10,000 (around $2,700). This penalty underlines the government’s resolve to enforce tax laws and ensure timely compliance by all taxable entities.
Who is Affected?
According to the new FTA decision, which is set to take effect next month, “a judicial person that is a resident person incorporated, established, or otherwise recognized prior to March 1, 2024,” must register for corporate tax within the prescribed timeframes.
Strategic Steps for Compliance:
To navigate these changes effectively, Horizon Biz Consultancy advises businesses to:
- Confirm their license issuance date.
- Mark the relevant registration deadline on their corporate compliance calendar.
- Begin gathering necessary documentation to ensure a smooth registration process.
- Engage with a knowledgeable tax consultant to review their tax profile and obligations.
Conclusion
The UAE’s latest tax registration deadlines are a clarion call for businesses to align with the new legal requirements. Non-compliance is not an option, given the substantial penalties in place.
FAQs
The deadlines are based on the initial month of issuance of a company’s trade license, regardless of the year of issuance.
Yes, the new corporate tax law affects all businesses operating in the UAE, and registering for corporate tax within the prescribed deadlines is mandatory to avoid penalties.
The Federal Tax Authority is expected to provide an online portal for businesses to complete their corporate tax registration. However, specific details on the process are yet to be announced.
The FTA has set strict deadlines for companies in the UAE to register for corporate tax. Failure to comply with these deadlines can result in significant penalties, highlighting the importance of timely registration.
