When do we register for UAE Corporate Tax?
When do we register for UAE Corporate Tax?
Finally, the much-awaited answer to one of the most frequently asked questions from the businesses worldwide has arrived with a deadline and penalty consequences of failing to comply.
Federal Tax Authority (‘FTA’) vide its Decision No. 3 of 2024 (effective from 1 March 2024) read with Cabinet Decision No. 10 of 2024 has prescribed the timeframe for filing UAE Corporate Tax (‘CT’) registration application along with the penalty consequences in case of delays.
The recent decision by the FTA regarding CT registration is crucial for businesses. Let’s break it down:
CT Registration Application Deadlines:
- Resident Juridical Persons: The deadline is linked to the month of issuance of the trade license, agnostic to the year of issuance.
- Non-resident Juridical Persons and Natural Persons: The deadline is linked to the date of establishing Permanent Establishment/Nexus in the UAE for non-residents and from the date of conducting the businesses or the business activity for natural persons.2.
Penalty for Non-compliance:
- Failure to file application for CT registration results in a non-deductible one-time penalty of AED 10,000.
- This penalty applies to both resident and non-resident businesses, either juridical or otherwise.
Evaluate Permanent Establishment/Nexus:
- Non-resident juridical and natural persons must assess if they have any Permanent Establishment/Nexus in the UAE during the applicable period.