UAE Implements AED 10,000 Penalty for Late Corporate Tax Registration

The entities liable for corporation tax in the United Arab Emirates were issued by the Federal Tax Authority (FTA) in December 2023. To make corporation tax more accessible for small firms, the UAE government introduced Small Business Relief (SBR). This relief is available to resident taxable entities (natural or juridical) with gross business revenue during the relevant tax period and any tax periods that ended on or before December 31, 2026, but not more than Dh 3 million.

Tax Registration Timelines:

The tax registration timelines in the UAE vary based on the type of entity and its specific circumstances.

Resident Juridical Persons:

Resident Juridical Persons refer to entities incorporated, established, or recognized in the UAE. 

A legal entity classified as a Resident Person must complete the Tax Registration application using the schedule provided:

• January 1st – January 31st: Submission due by May 31st, 2024
• February 1st – February 28th/29th: Submission due by May 31st, 2024
• March 1st – March 31st: Submission due by June 30th, 2024
• April 1st – April 30th: Submission due by June 30th, 2024
• May 1st – May 31st: Submission due by July 31st, 2024
• June 1st – June 30th: Submission due by August 31st, 2024
• July 1st – July 31st: Submission due by September 30th, 2024
• August 1st – August 31st: Submission due by October 31st, 2024
• September 1st – September 30th: Submission due by October 31st, 2024
• October 1st – October 31st: Submission due by November 30th, 2024
• November 1st – November 30th: Submission due by November 30th, 2024
• December 1st – December 31st: Submission due by December 31st, 2024

If a Resident Juridical Person does not have a License:

• He must apply within three months after the implementation date of this decision.

Tax Registration Rules for Foreign Companies in the UAE:

Non-Resident Judicial Persons who existed before the effective date of this Decision must file their Tax Registration application within the time. The deadline for those who have one in the state is nine months from the date of the Permanent Establishment’s registration. Furthermore, within three months of this Decision’s effective date, entities having a nexus in the State must submit their application for Tax Registration. 

This framework guarantees non-resident firms comply with corporate tax laws by offering a straightforward, streamlined procedure for tax registration based on regulatory criteria.  Companies with a permanent establishment in the state must file within six months of the date of establishment, while companies with a nexus in the state must file within three months of the date of nexus establishment.

Tax Registration Timelines for Individuals in UAE

The tax registration timeline for natural persons in the UAE is as follows:

• Resident Individuals: Those who conduct business or participate in business activity in 2024 or later and whose total turnover reaches the specified threshold must file their application for tax registration by March 31 of the following year.

• Non-Resident Individuals: People who operate businesses or participate in business activities in 2024 (the Gregorian calendar year) or later and whose total turnover exceeds the threshold outlined in the applicable tax regulation must apply for tax registration within three months of satisfying the requirements to be subject to tax.

BRISK Guidance:

UAE’s new tax registration framework emphasizes compliance; BRISK offers expert advice for smooth transition and risk mitigation. As of March 1, 2024, a significant decision has been made to establish a structured framework for tax registration in the United Arab Emirates (UAE). We assist businesses in handling these changes by offering knowledgeable advice and assistance to ensure smooth compliance with the UAE’s changing tax environment. We provide different services :

• Expert Consultation
• Compliance Assistance
• Risk Mitigation
• Ongoing Support