When and how the fine of 10,000 dirhams is applied

Authorities in the United Arab Emirates have specified deadlines for companies to submit their applications for Corporation Tax registration.

As of March 1, 2024, the Federal Tax Authority (FTA) The decision has detailed deadlines for each segment of taxable entities or persons to register and avoid violating tax laws.

According to the Ministry of Finance, an administrative fine of Dh10,000 is applied for late registrations. Here’s everything you need to know.

What are the new deadlines for registering Corporate Tax?

– Resident legal entities (organizations) incorporated, established or otherwise recognized before March 1, 2024.

Nishant Rayma, Partner, RMC Tax ConsultingHe said that the registration deadlines are structured based on the original month of incorporation of the companies, regardless of the year.

“This uniform application means that deadlines are consistent for companies established in the same months, regardless of their year of incorporation.”

Rayma said.

The FTA decision states that if a legal entity does not have a license before March 1, 2024, it must apply for registration within three months, that is, May 31, 2024.

Under the FTA, if an entity has more than one license, the one with the earliest issue date will be used.

– Resident legal entities (organizations) incorporated, established or otherwise recognized after March 1, 2024.

For new resident companies incorporated after March 1, the registration deadline is “mostly” three months from the date of incorporation, Rayma said.

These are the deadlines specified by the FTA:

• A person incorporated or recognized under the laws applicable in the UAE, including a free zone person: Three months from the date of incorporation, establishment or recognition.
• A person who is incorporated or recognized under the applicable laws of another country or foreign jurisdiction: Three months from the end of the person’s financial year.

– Non-resident legal entity before March 1

• Person having a permanent establishment in the UAE: Nine months from the date of existence.
• A person who has a nexus in the United Arab Emirates: May 31.

– Non-resident legal entity after March 1

• Person who has a permanent establishment in the state: Six months from the date of existence
• A person who has a nexus in the state: May 31

– Natural persons (individuals operating in a personal capacity)

According to Rayma, the deadline for resident natural persons with a turnover of more than Dh1 million is March 31 of the following year, while non-resident natural persons must register within three months of meeting the requirements to be subject to the tax.

When and how is the fine applied?

Administrative sanctions will be imposed on taxpayers who do not submit their applications for Corporate Tax registration within the deadlines specified in the FTA Decision for each segment.

Arun Gurung, regional finance director at Sovereign Corporate Services Dubai, advised companies to consider this update carefully “to be prepared to meet relevant deadlines and avoid late registration fines of Dh10,000”.

News Source: Khaleej Times