Key Message
The UAE Federal Tax Authority (FTA) has issued detailed guidelines and deadlines for UAE corporate tax registration, emphasizing transparency, compliance, and the consequences of non-compliance.
General Clarification
The FTA outlines the deadlines for registering individuals and entities subject to corporate tax. It provides comprehensive information on the deadlines for different categories of taxable persons to submit their registration applications. This initiative ensures complete transparency, promotes voluntary compliance, and informs stakeholders about significant updates and developments.
Key Details
Federal Decree Law No. (47) of 2022:
The clarification reaffirms that it does not amend any provisions of this legislation and will be effective from March 1, 2024, unless otherwise specified.
Specific Registration Periods:
The clarification specifies the registration periods for various categories of taxable residents and non-residents, including legal and natural persons.
Federal Tax Authority Resolution No. (7) of 2023 remains unchanged regarding the registration requirements for legal persons seeking exemptions under the Corporate Tax Law.
Penalties for Non-Compliance:
A fine of 10,000 dirhams will be imposed on those who fail to comply with the registration deadlines.
Registration Deadlines for Legal Persons
Resident Legal Persons:
Established before March 1, 2024: Must register based on the month their license was issued or by May 31, 2024, if unlicensed.
Established on or after March 1, 2024: Must register within three months from incorporation.
Non-Resident Legal Persons:
Established before March 1, 2024: Must register within nine months of establishing a permanent establishment in the UAE or by May 31, 2024, if connected before March 1, 2024.
Established on or after March 1, 2024: Must register within six months from the permanent establishment's existence date.
Registration Deadlines for Natural Persons
Resident Natural Persons:
Must register by March 31 of the following calendar year if revenues exceed one million dirhams during a calendar year starting from January 1, 2024.
Non-Resident Natural Persons:
Must register within three months of meeting the revenue threshold of one million dirhams from business activities in the UAE starting from January 1, 2024.
Additional Provisions
International Agreements: If an international agreement to avoid double taxation provides a longer period for recognizing a permanent establishment, the international agreement will take precedence.
First Tax Period: The first possible tax period for any natural person, whether resident or non-resident, is the calendar year 2024. Therefore, any income generated before January 1, 2024, will not be subject to corporate tax, and the deadline for submitting a tax registration application is May 31, 2025.
Key Takeaways
Effective Date and Scope: The clarification is effective from March 1, 2024, and applies to various taxable persons, including residents and non-residents, legal entities, and natural persons.
Specific Deadlines:
Legal Persons (Residents): Based on the license issue month or by May 31, 2024, if unlicensed.
Legal Persons (Non-Residents): Within nine months of establishing a permanent establishment or by May 31, 2024, if connected before March 1, 2024.
Natural Persons (Residents): By March 31 of the following calendar year if revenues exceed one million dirhams.
Natural Persons (Non-Residents): Within three months of meeting revenue thresholds from a permanent establishment.
Penalties: A fine of 10,000 dirhams for failing to meet registration deadlines.
International Agreements: Double taxation agreements take precedence over local deadlines.
Clarification and Examples: Comprehensive analysis and examples are provided to ensure understanding of obligations and deadlines.
Encouragement of Compliance: The FTA encourages adherence to deadlines to avoid fines and ensure smooth compliance.
Exemptions: Requirements and deadlines for seeking exemptions remain unchanged.
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