The Federal Tax Authority (FTA) in the UAE has established detailed timelines for the registration of taxable persons under the Corporate Tax Law. Understanding and adhering to these timelines is crucial for businesses operating within the UAE to ensure compliance and avoid penalties. This article provides an in-depth overview of these timelines and the implications for various types of entities and individuals.
Background
Corporate Tax in the UAE is governed by Federal Decree-Law No. 47 of 2022, which outlines the taxation framework for corporations and businesses. The FTA has the authority to set registration deadlines, and these are stipulated in FTA Decision No. 3 of 2024. This decision came into effect on March 1, 2024, and it supersedes the previous timelines outlined in FTA Decision No. 7 of 2023.
Key Registration Timelines
The timelines for submitting tax registration applications vary depending on the nature and status of the taxable person. Below are the primary categories and their respective deadlines:
- Juridical Persons That Are Resident Persons
- Incorporated Before March 1, 2024: These entities must submit their tax registration applications based on the month of their license issuance, with specific deadlines outlined in the FTA decision.
- Incorporated On or After March 1, 2024: They are required to register within three months from the date of incorporation, establishment, or recognition.
- Juridical Persons That Are Non-Resident Persons
- With a Permanent Establishment Prior to March 1, 2024: Must register within nine months from the date the permanent establishment is recognized.
- With a Nexus in the UAE Prior to March 1, 2024: Must register within three months from the effective date of the FTA decision (by May 31, 2024).
- Becoming Non-Resident On or After March 1, 2024: Must register within six months from the date the permanent establishment is recognized, or within three months from establishing a nexus in the UAE.
- Natural Persons That Are Resident Persons
- Must register if their turnover from business activities in the UAE exceeds AED 1 million during a Gregorian calendar year, with a registration deadline of March 31 of the subsequent year.
- Natural Persons That Are Non-Resident Persons
- Must register if their turnover from a permanent establishment in the UAE exceeds AED 1 million during a Gregorian calendar year, within three months of meeting the requirements.
Penalties for Non-Compliance
Failure to submit the tax registration application within the specified timelines results in an administrative penalty of AED 10,000. Therefore, it is imperative for businesses to adhere to these deadlines to avoid such penalties.
Practical Examples
To illustrate the application of these timelines, consider the following examples:
- Company A: Incorporated in Ajman on November 11, 2023, with a license issued on the same day. As a resident person incorporated before March 1, 2024, Company A must register by November 30, 2024.
- Company E: Incorporated in Sharjah on June 16, 2024. As a resident person incorporated after March 1, 2024, Company E must register by September 16, 2024.
- Mr. A: A natural person operating a jewelry shop in the UAE with a turnover of AED 4.1 million in 2024. Mr. A must register by March 31, 2025.
The FTA’s detailed registration timelines for corporate tax compliance reflect the UAE’s commitment to maintaining a robust and transparent tax system. Businesses and individuals must be diligent in understanding these requirements and ensuring timely compliance. For more information and specific guidance, it is advisable to consult with tax professionals or refer directly to the FTA’s publications.
Source: CTP001 –
Corporate Tax Public Clarification Registration Timelines for Taxable Persons for Corporate Tax Issued 04/06/2024
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