The Federal Tax Authority in the United Arab Emirates has announced the imposition of fines of up to 10,000 AED for UAE residents who do not submit tax registration.
Request tax registration for residents
The Authority explained that UAE residents subject to corporate tax, namely residents who have licenses issued in March and April, regardless of the year of issuance, must submit a tax registration application by June 30.
The Authority also added that for legal persons, which means recognized entities with a legal personality distinct from their founders, owners, and directors, which are persons who have not obtained a license by March 1 of this year, today, May 31, is the deadline for submitting tax registration for companies.
Corporate tax applies to legal persons established in the country
Legal persons that are incorporated in the United Arab Emirates (UAE) as well as foreign entities that are effectively managed and controlled in the country are subject to the applicable corporation tax.Residents of the United Arab Emirates are considered to be taxable legal persons. This includes firms that are based in free zones as well as entities that are based in other countries but are administered and controlled by the state.
Individuals carrying out commercial activities will not be subject to corporate tax
Individuals who engage in commercial operations in the United Arab Emirates will only be required to pay corporation tax, as stated by the Ministry of Finance, if their yearly total sales are greater than one million dirhams.
According to a resolution that was announced by the Cabinet in February of this year, businesses that fail to meet the deadline for tax registration would be subject to a punishment of 10,000 dirhams.
Corporate tax
The corporation tax is a type of direct tax that is levied on the net income or profits of corporations and other types of enterprises for all businesses.
A statement was made by Khaled Ali Al Bustani, the Director General of the Federal Tax Authority, which stated that "business sectors have been notified of the specific dates for various categories of taxpayers as part of ongoing efforts to strengthen strategic partnerships with taxable people and provide them with the means to facilitate smooth and accurate tax compliance."
A campaign to educate business stakeholders
The Federal Tax Authority recently carried out the second part of its comprehensive campaign, which aims to educate business stakeholders about the significance of corporate tax compliance as well as the standards under which it must be met.
In addition to engagement through economic councils and business parks in commercial and industrial regions, Al-Bustani stated that this is accomplished through the use of in-person and virtual awareness seminars. Interacting with all different types of taxpayers and raising knowledge about taxes on a big scale are the goals of this endeavor.
