Corporate Tax Registration Deadline
Corporate Tax is introduced in the UAE with effect from 01 June 2023. Corporate Tax is applicable for both residents and non-residents who are conducting business or business activities inside the UAE. Resident companies are liable to tax for their worldwide income, whereas non-resident companies are subject to Corporate Tax on the income generated from the UAE either through a Permanent Establishment or source income or nexus in the UAE.
Corporate Tax Law clearly specifies that all the taxable persons, except a few exempt persons, shall register for Corporate Tax and file the tax returns. Any reliefs, benefits, exemptions, etc. can be availed by a taxable person only at the time of filing the Corporate Tax return.
The Ministry of Finance issued Cabinet Decision No.75 of 2023, which outlined the administrative penalties for violation of the Corporate Tax Law. Cabinet Decision 10 of 2024 issued by the Ministry of Finance amended the schedule of penalties for violation of Federal Decree-Law No. 47 of 2022 on the taxation of corporations and businesses. Cabinet Decision 10 of 2024 came into effect from 01 March 2024. Through this decision, the authority clarified the penalty for late registration for Corporate Tax.
At the same time, FTA issued Decision No. 3 of 2024 with the deadlines specified for all resident and non-resident taxable persons. The summarised version of the most relevant part of this decision is as below:-
➦ For any company whose license is issued before 01 March 2024, the deadline for Corporate Tax registration depends on the month of license issuance, regardless of the year of issuance. Example: - any license issued in the month of January or February, the deadline was May 31, May 2024. The authority aims to handle the Corporate Tax registration applicable to all the taxable persons and complete all existing companies' Corporate Tax registration before 31 December 2024.
➦ For any company whose license is issued after 01 March 2024, the deadline for Corporate Tax registration is within 3 months from the date of license issuance.
➦ Natural person (individuals, sole establishment, etc.) who earns more than Dirhams One Million in a taxable year, the deadline for Corporate Tax registration is 31 March of the subsequent year of achieving the gross revenue of Dirhams One Million. Unlike a juridical person, the natural person shall follow only the Gregorian calendar year as their financial year.
By reading so far, you must have understood the deadline to be followed by all existing and new companies in the UAE and the penalties for delay in Corporate Tax registration.
Initially, for Corporate Tax registration, below are the following documents are required
- Valid Trade License
- Incorporation Certificate, if available.
- Memorandum of Association /Articles of Association of the company.
- Valid passport copies of all the shareholders/Managers,/Directors
- Valid Emirates ID copies of all the shareholders/Managers,/Directors.
- Details of the branch, if any.
- Details of the financial year the taxable person follows.
- Mobile number and email address.
There are many companies in the UAE, whose licenses expired recently or some months/years back and for them meeting the deadline for Corporate Tax registration without a valid trade license was a dilemma. FTA published a public clarification (CTP001) for FTA Decision No.3 of 2024. This clarification explained that any company which is not liquidated before the applicability of Corporate Tax to that company shall be subject to Corporate Tax registration before the deadline specified in the FTA Decision.
Since not all companies are liquidated before the applicability of the Corporate Tax to a company, irrespective of whether the license is active, expired, frozen, etc. FTA removed the condition of the requirement of a valid trade license to register for Corporate Tax. This means, at the time of application, in the field where the license expiry date is mentioned, the back date is also possible to enter, which was not the case previously to the FTA Decision regarding the deadline and penalties.
This gives a clear picture that all the companies shall register for Corporate Tax irrespective of the active license, expired license, making profit, making loss, etc. Make sure that your companies are complying with the Corporate Tax law, and the first step is registering the company for Corporate Tax and obtaining the Tax Registration Number.
Are you wondering what will be the case for those companies which are liquidated in the first tax year, should they register or not? Click here to read more
To learn more about How to Register Corporate Tax with an Expired License, book a free consultation with one of the Flyingcolour team advisors.
Disclaimer: The information provided in this blog is based on our understanding of current tax laws and regulations. It is intended for general informational purposes only and does not constitute professional tax advice, consultation, or representation. The author and publisher are not responsible for any errors or omissions, or for any actions taken based on the information contained in this blog.