Deadlines and Penalties for Late Registration for Corporate Tax in UAE

Renowned for its appeal to global entrepreneurs and investors with its tax-friendly environment and streamlined procedures, the UAE has undergone a significant transformation since the introduction of corporate tax in 2023. Having set a new era of tax compliance and regulations within the business landscape, the UAE CT regime ensures that all businesses collectively contribute to the nation’s socio-economic development.

All companies are required to obtain a registration number and register for corporation tax. You have to turn in the corporate tax documentation at the time of registration. You have to apply the hefty fines listed above if you are unable to register or if you cause delays in doing so.

According to UAE Corporate Tax Laws, all Taxable Persons and certain categories of Exempt Persons (like Qualifying Public Benefit entities and Qualifying Investment Funds) must register for Corporate Tax (CT) with the Federal Tax Authority (FTA) within the allotted deadline in order to receive a Tax Registration Number (TRN). Neglecting to register for Corporate Tax might result in significant legal implications and a substantial punishment.

According to a recent update, the Ministry of Finance announced on February 27, 2024, a new Dh10,000 penalty for late registration for Corporate Tax. The penalty will take effect on March 1st, 2024.

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Is Corporate Tax Registration Compulsory?

Not only is corporate tax enrollment a formality, but it’s also an important step that requires proper financial data to be submitted, which forms the basis for calculating tax liabilities. The Federal Tax Authority (FTA), in its capacity as the facilitator, offers a user-friendly web portal that leads businesses through the registration network. Businesses and corporations that meet the requirements of the new CT regime must register immediately. 

In order to avoid incurring a substantial penalty of AED 10,000 for late corporate tax registration, firms would be wise to assemble their financial records and finish their corporate tax registration at the same time. This will incentivize taxpayers to meet their tax obligations on time.

Corporate Tax Penalties For Late Registration and Return Filing

Penalties for late filing of corporate tax returns can be extremely severe. For Example, when a business’s fiscal year finishes in April and tax returns are due on the fifteenth day of March, there could be severe penalties in Dirhams if federal decree laws are broken or tax reports are filed beyond the deadline.

The UAE wants to make sure that companies take their tax obligations seriously and steer clear of the last-minute registration rush by imposing a high financial penalty for late registration. This will make it possible for the UAE to continue fostering economic growth and luring investment by maintaining a stable and open tax environment. Furthermore, disregarding this new punishment may result in other legal ramifications, including:

  • Potential obstacles to getting tax clearance certificates that could prevent companies from operating and from bidding on government contracts.
  • Damage to reputation as a result of breaking UAE laws. FTA scrutiny that is more intense, which could result in more inquiries and penalties.
  • The cash flow and overall financial health of a corporation can be significantly impacted by elevated financial liabilities.

Month of License Issuance and the Deadline to apply for Corporate Tax Registration

January or February 

May 31, 2024 

March or April 

June 30, 2024 

May 

July 31, 2024 

June 

August 31, 2024 

July 

September 30, 2024 

August or September 

31 October 2024 

October or November 

30 November 2024 

December 

31 December 2024 

How Unicorn Global Solutions Can Help

The UAE’s decision to change its tax system by imposing a 10,000 AED fine for late corporate tax registration is a major development. Here, Unicorn Global Solutions is prepared to help companies through the registration process by offering professional advice and assistance to guarantee smooth compliance with the UAE’s changing tax landscape.

Our professionals offer thorough elucidations and clarifications on the corporate tax laws that apply to your company, assisting you in comprehending your tax responsibilities and maximizing your tax advantage.

Additionally, we keep updated of any changes that may affect your company and proactively advise you on them, reducing the possibility of fines down the road and letting you concentrate on managing your business with confidence.

For a FREE consultation with one of our business tax specialists, use the website, Text us on WhatsApp or call us today.

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