Understanding FTA’s New Corporate Tax Registration Timelines

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In a bid to foster transparency and compliance, the Federal Tax Authority (FTA) of the UAE has issued a Public Clarification on the registration timelines for Corporate Tax. This clarification provides detailed guidance for various categories of taxable persons, including juridical and natural persons, both resident and non-resident. With the introduction of these timelines, the FTA aims to ensure that all taxable persons are well-informed and can meet their tax obligations promptly. In this article, we will delve into the key aspects of this Public Clarification and outline the important deadlines and requirements.

Key Highlights of the Public Clarification

The Public Clarification covers specific deadlines and registration requirements for different categories of taxable persons. Here are the main points are as follows:

1. Resident Juridical Persons

For juridical persons that are considered resident and were incorporated or established in the UAE before 1 March 2024, the registration timeline is based on the month of their license issuance. If a juridical person does not have a license by 1 March 2024, it must register by 31 May 2024. In cases where a juridical person holds multiple licenses, the deadline is determined by the earliest issuance date.

2. Newly Incorporated Juridical Persons

Juridical persons that are incorporated or established after 1 March 2024 must submit their tax registration application within three months from the date of incorporation. This ensures that new businesses promptly comply with tax regulations from the outset.

3. Non-Resident Juridical Persons

For non-resident juridical persons with a permanent establishment (PE) in the UAE prior to 1 March 2024, the registration application must be submitted within nine months from the establishment date. For those established after 1 March 2024, the deadline is within six months. Additionally, non-resident juridical persons with a nexus in the UAE must register within three months of establishing this nexus.

4. Resident Natural Persons

Natural persons considered residents and whose business turnover exceeds AED 1 million within a Gregorian calendar year must register for corporate tax by 31 March of the subsequent year. This threshold ensures that significant business activities are captured within the tax net.

5. Non-Resident Natural Persons

Non-resident natural persons with business activities in the UAE exceeding AED 1 million through a PE must register within three months of meeting this threshold. This requirement applies starting from 1 January 2024.

Administrative Penalty for Non-Compliance

The FTA has emphasized that failure to comply with these registration deadlines will result in an administrative penalty of AED 10,000. This significant penalty underscores the importance of timely tax registration and compliance.

Conclusion

The Public Clarification on Corporate Tax Registration Timelines by the FTA outlines the registration requirements and deadlines. It ensures that all taxable persons, whether businesses or individuals, can meet their obligations and avoid penalties. It is crucial for all affected persons to review the Public Clarification in detail and adhere to the specified timelines for smooth and compliant operations.

Besides, in case where there are different views possible on whether registration is required under UAE CT law or not (eg. In the case of existence of a PE), it might be advisable to consult professional advisors to avoid tax penalty. 

Disclaimer: Content posted is for informational and knowledge sharing purposes only, and is not intended to be a substitute for professional advice related to tax, finance or accounting. The view/interpretation of the publisher is based on the available Law, guidelines and information. Each reader should take due professional care before you act after reading the contents of that article/post. No warranty whatsoever is made that any of the articles are accurate and is not intended to provide, and should not be relied on for tax or accounting advice.