FTA Issues Public Clarification on Corporate Tax Registration Timeline

UAE, 4 June, 2024 : The Federal Tax Authority (FTA) has issued a Public Clarification CTP001 to clarify the timeline for submitting Tax Registration applications for Corporate Tax purposes. This clarification is intended to guide taxable persons on their registration obligations under the updated FTA regulations.

Clarification Overview:

1. Mandatory Registration: All taxable persons are required to submit a Tax Registration application for Corporate Tax to the FTA by the deadlines specified in FTA Decision No. 3 of 2024.

2. Superseding Previous Timelines: The registration timelines outlined in FTA Decision No. 7 of 2023 are now overridden by the timelines specified in FTA Decision No. 3 of 2024. Notably, the timeline for applying for exemptions as stated in Decision No. 7 of 2023 remains unchanged.

3. Scope of Application: The updated timelines apply to juridical persons whose first Tax Period has already commenced, regardless of whether the entity is continuing, ceasing business activities, or in the process of liquidation.

4. Penalties for Non-Compliance: Taxable persons who fail to submit their Tax Registration application within the specified timeframe will face an administrative penalty of AED 10,000.

5. Entity-Specific Deadlines: The timelines specified in FTA Decision No. 3 of 2024 differ based on the type of taxable person:

• Juridical persons that are Resident Persons
• Juridical persons that are Non-Resident Persons
• Natural persons

According to Shailesh Kumar, Head of Corporate Tax at PKF UAE, "The Corporate Tax Public Clarification issued by the FTA on Registration Timelines for different classes of Taxpayers provides the much needed clarity on such timelines and its applicability for the corporates, through various examples. In one example, the Guide clarifies that the for the foreign entities not having any License in the UAE and required to register due to Place of Effective Management, timeline for Corporate Tax registration was 31 May 2024. The guide also expressly covers that these timelines are also applicable to the 'offshore companies' that are incorporated in the UAE. The Guide also clarifies that even companies having expired Licenses, which are not cancelled, need to register for the Corporate Tax. This new guide seems to have vide ramifications and all the Taxpayers are advised to have a look at their Licenses carefully and apply for Corporate Tax registration ASAP, if not already done!"

Taxable persons are advised to review the specific deadlines applicable to their category and ensure timely submission of their Tax Registration applications to avoid penalties and ensure compliance with FTA regulations. For detailed information, entities should refer to FTA Decision No. 3 of 2024.

Source : www.tax.gov.ae