Corporate Tax Registration

The introduction of corporate tax in the UAE marks a significant change in the business landscape, requiring all taxable persons to register for corporate tax with the Federal Tax Authority (FTA). The process is governed by the Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses, along with the implementing decisions, particularly FTA Decision No. 3 of 2024. Check key aspects of the registration due dates, who needs to register, and the penalties for non-compliance.

Who Needs to Register for Corporate Tax?

1. Juridical Persons (Companies):

• Resident Persons: Any juridical person incorporated, established, or otherwise recognized under UAE law, including those in free zones and offshore companies, must register. The deadline for registration depends on the date of the company’s license issuance:

• • Before March 1, 2024: Companies must register based on the month their license was issued, with specific deadlines ranging from May 31, 2024, to December 31, 2024. Check Corporate Tax registration due date by putting details.
  • On or After March 1, 2024: Companies must register within three months from the date of incorporation or recognition.

• Non-Resident Persons: Companies that are non-resident but have a permanent establishment in the UAE or have a nexus in the UAE must register within nine months from the date of establishment or within three months from the effective date of FTA Decision No. 3 of 2024 means (Three months from the deadline come as per calculation for normal entities) whichever is earlier.

2. Natural Persons (Individuals):

• Resident Individuals: Natural persons who conduct business activities in the UAE and whose turnover exceeds AED 1 million in a Gregorian calendar year are required to register by March 31 of the following year in which turnover exceeds.
• Non-Resident Individuals: Non-resident individuals who derive income from a permanent establishment in the UAE and exceed the AED 1 million threshold must register within three months of meeting the tax requirements.

Penalties for Late Registration

Failing to register for corporate tax within the prescribed timelines can result in severe penalties. According to the Table of Violations and Administrative Penalties annexed to Cabinet Decision No. 75 of 2023, a taxable person who does not submit a tax registration application within the specified timeframe will incur an administrative penalty of AED 10,000. This penalty emphasizes the importance of adhering to the registration deadlines to avoid additional costs and complications.

Importance of Timely Registration

Timely registration is crucial not only to avoid penalties but also to ensure compliance with the UAE’s corporate tax laws. The FTA has provided clear guidelines on registration timelines, and it is essential for businesses and individuals to follow these directives closely. Early registration allows businesses to better manage their tax obligations and avoid last-minute complications.
In conclusion, the UAE's corporate tax registration process is mandatory for all taxable persons, including resident and non-resident companies and individuals. Understanding the registration deadlines and adhering to them is vital to avoid penalties and ensure compliance. Businesses are encouraged to review their incorporation dates and income levels to determine their specific registration requirements and act promptly.