Today, May 31, is the deadline for corporate tax registration for entities that did not have a license by March 1 this year.
Corporate Tax Registration Deadline
The Federal Tax Authority (FTA) has reminded UAE residents subject to corporate tax with licenses issued in March and April—regardless of the year of issuance—that they must submit their corporate tax registration application by June 30.
Corporate tax applies to juridical persons, which are recognized entities with a distinct legal personality separate from their founders, owners, and directors. These entities include those incorporated in the UAE and foreign entities effectively managed and controlled within the country. The resident juridical taxable persons encompass entities incorporated in the UAE, including free zone businesses and those established abroad but managed from the UAE.
According to the Ministry of Finance, individuals conducting business activities in the UAE will be subject to corporate tax only if their combined turnover exceeds Dh1 million annually. This ensures that smaller businesses and individuals with lower income levels are not burdened with corporate tax obligations, focusing the tax on larger entities.
Penalties for Missing the Deadline
A Cabinet resolution from February this year stipulates that companies would be fined Dh10,000 if they do not register for taxes by the due date. To ensure that all taxable organizations follow the existing tax structure, this penalty emphasizes the need of prompt compliance with the registration requirements.
Corporate tax is a direct tax levied on the net income or profit of corporations and other businesses. It is a significant source of revenue for the government, helping to fund public services and infrastructure. The introduction and enforcement of corporate tax in the UAE mark a shift towards a more structured and regulated business environment, aligning with international standards.
Khalid Ali Al Bustani, the director-general of the FTA, emphasized that the business sectors have been informed of the specified deadlines for different taxpayer categories. This initiative is part of the FTA's continuous efforts to strengthen strategic partnerships with taxable persons and provide them with the necessary tools to facilitate smooth and accurate tax compliance.
The FTA has undertaken various measures to ensure that businesses are aware of their obligations and the resources available to assist them in the registration process. These measures include informational campaigns, workshops, and direct communications with business entities. By doing so, the FTA aims to minimize the risk of non-compliance and support the business community in adapting to the new tax regime.
The deadline for corporate tax registration is a critical date for juridical persons in the UAE who did not have a license by March 1. With the potential penalty of a Dh10,000 fine for missing the deadline, it is essential for businesses to ensure they comply with the registration requirements. The introduction of corporate tax in the UAE represents a significant step towards a more regulated business environment, with the FTA actively supporting businesses in meeting their tax obligations. As the June 30 deadline approaches for those with licenses issued in March and April, businesses must act promptly to avoid penalties and ensure compliance.
