Companies in the UAE are starting to be fined for not registering for corporate tax!

Companies in the UAE are starting to be fined for not registering for corporate tax!

All business owners in the UAE should apply to register for corporate tax as soon as possible. The UAE federal tax authority made a decision on March 1 and will begin to apply fines to companies that have not registered for corporate tax. If your company was registered before 2024, then you should hurry up with registration. The decision of the UAE Federal Tax Authority (FTA) came into force on March 1, 2024.

New companies, Taxpayers with a license issued in January or February of this year, have been given time and are asked to register until the end of May 2024 to avoid penalties.

Effective from 1 March 2024, the new FTA Decision sets out the time limits for applying for corporation tax registration that apply to companies that are either resident or non-resident and licensed before 2024.

The Decision states that a legal entity resident, registered, incorporated or otherwise recognized in the UAE before 1 March 2024 must apply for corporate tax registration within the following deadlines:

  1. If the company was registered in January or February, then the deadline for corporate tax registration is May 31, 2024.
  2. March or April = until June 30, 2024.
  3. May = until July 31, 2024.
  4. June = until August 31, 2024.
  5. July = until September 30, 2024.
  6. August or September = until October 31, 2024.
  7. October or November = until November 30, 2024.
  8. December = until December 31, 2024.

*It is the months of registration that are important, not the year!

According to the Decision, if a legal entity does not have a license on the effective date of the Decision, March 1, 2024, it must apply for registration within three months, that is, by May 31, 2024.

The Decision explains the consequences for failing to register as a corporation tax payer.

If a person fails to apply for corporate tax registration within the above deadlines, he will be subject to an administrative fine of AED 10,000 in accordance with the UAE Cabinet Regulation.

Diana Gulevskaya

Antwort Law

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