In a significant development aimed at streamlining tax compliance, the Ministry of Finance in the United Arab Emirates (UAE) has issued Cabinet Decision No. 10 of 2024. This decision, effective from March 1, 2024, introduces amendments to the schedule of violations and administrative penalties associated with corporate and business taxation, thereby modifying the provisions outlined in Cabinet Decision No. 75 of 2023.
Key Amendment: Administrative Penalty for Late Corporate Tax Registration
The key amendment introduced through Decision No. 10 of 2024 is the imposition of an administrative penalty of Dh 10,000 for late registration of Corporate Tax in the UAE. This penalty will be applicable to businesses failing to submit their Corporate Tax registration applications within the specified timelines set by the Federal Tax Authority.
Objective of the Penalty
The primary objective behind the introduction of this penalty is to enhance taxpayer compliance with tax regulations, underscoring the significance of timely registration for corporate tax. The penalty amount is aligned with those associated with late registration for excise tax and value-added tax, reflecting the government's commitment to fostering a culture of punctual tax compliance.
Deadline Schedule for Tax Registration
The decision outlines a detailed schedule for the tax registration of various entities, differentiating between resident and non-resident juridical persons, as well as natural persons.
1. Juridical Person
a. Deadline for Resident Juridical Persons (including free zone persons) who were incorporated, established, or recognized before March 1, 2024
Month of License Issuance | Deadline to apply for Corporate Tax Registration
|
January or February | 31 May 2024 |
March or April | 30 June 2024 |
May | 31 July 2024 |
June | 31 August 2024 |
July | 30 September 2024 |
August or September | 31 October 2024 |
October or November | 30 November 2024 |
December | 31 December 2024 |
In the case if a Juridical Person does not have a license | 3 Months from March 1, 2024
|
b. Resident Juridical Persons (including free zone persons) established or recognised on or after March 1, 2024
Category of Juridical Persons | Deadline for Tax Registration Application |
A person incorporated, established or recognised under the applicable legislation of another country or foreign territory, and who is effectively man- aged and controlled in the UAE.
|
3 months from the end of the person’s financial year.
|
A person incorporated or otherwise established or recognised under the applicable legislation in the UAE, including a Free Zone Person.
|
3 months from the date of incorporation, establishment or recognition.
|
2. Non-Juridical Person
a. Non-Resident Juridical Persons Before March 1, 2024
Category of Juridical Persons | Deadline for Tax Registration Application
|
A person who has a permanent establishment in the country.
|
9 months from the date of starting the permanent establishment
|
A Non-Resident Juridical person with a nexus in the UAE.
|
3 months from March 1, 2024.
|
b. Non-Resident Juridical Persons on or after March 1, 2024
Category of Juridical Persons
| Deadline for Tax Registration Application
|
A person who has a permanent establishment in the country.
|
6 months from the date of starting the permanent establishment.
|
A Non-Resident Juridical person with a nexus in the UAE.
|
3 months from the date of establishing the relationship.
|
3. Natural Persons Conducting Business or Business Activity
Category of Juridical Persons
| Deadline for Tax Registration Application
|
A resident natural person who runs a business or carries out business activity during the calendar year 2024 or subsequent years, and whose total turnover generated for each Gregorian calendar year exceed the limit specified in the relevant tax legislation.
|
March 31 of the following Gregorian calendar year.
|
A non-resident natural person who runs a business total turnovers generated exceed the limit specified 3 or carries out business activity during the Gregorian calendar year 2024 or subsequent years and whose in the relevant tax legislation.
|
3 months from the date of fulfilling the conditions set out to determine taxable persons.
|
Conclusion
These amendments underscore the UAE government's commitment to ensuring a transparent and efficient tax system. Businesses and individuals are urged to be more aware of the specified timelines, including the issuance date of their trade license, to avoid the newly imposed administrative penalty. Missing these deadlines may not only result in financial penalties but also hinder the nation's economic development. Hence, strict adherence to these timelines is crucial for responsible tax practices and sustained economic growth.
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Contributor
Priyanka Garg is a Strategic Tax Director with 10+ years of expertise, excels in comprehensive tax advisory services, specializing in GCC VAT and Excise Tax. Rising from Assistant Manager to Associate Director at MBG Corporate Services UAE, Priyanka leads indirect tax services for GCC businesses, implementing VAT and Excise Tax successfully in UAE and India across diverse sectors. With a Bachelor of Commerce in Taxation and a Chartered Accountant qualification, she fosters collaborative team cultures and delivers high-quality tax solutions, empowering businesses to achieve financial objectives. #TaxLeadership #FinancialExpertise
