INSITE - UAE - March 2024

UAE CORPORATE TAX: FTA DECISION NO. 3 OF 2024 - REGISTRATION TIMELINE

Summary: The United Arab Emirates (UAE) Federal Tax Authority (FTA) has set a deadline for taxable and certain exempt individuals to register for corporate tax through Decision No. 3 of 2024. This decision is effective from March 1, 2024, and determines the registration deadlines based on residency, individual category, and date of incorporation or business commencement.

In Detail:

Key Highlights

Resident Judicial person

For the UAE resident juridical persons, the deadline to submit the corporate tax registration application depends on factors such as the category of the juridical person, the date of incorporation, and the issuance date of the trade license, irrespective of the year of issuance. The earliest deadline is set for May 31, 2024. Specifically, a juridical person classified as a Resident Person, which was incorporated or recognized before the effective date of this decision (March 1, 2024), is required to adhere to specific timelines outlined for submitting the tax registration application:

Month of License Issuance The year the license was issued is irrelevant	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

The FTA emphasized the importance of adhering to the specified timeframes for submitting corporate tax registration applications. It highlighted that individual with licenses issued in January and February, regardless of the year of issuance, must submit their applications by May 31, 2024, to avoid violating tax laws.

As per the decision, if a juridical person lacks a license by the effective date of March 1, 2024, they must apply for registration within 3 months, by May 31, 2024. In cases where the juridical person holds multiple licenses, the deadline for registration is determined based on the earliest issued license, setting the maximum timeframe to submit the Corporate Tax registration application.

For resident juridical persons incorporated, established, or recognized on or after March 1, 2024, the following timelines apply:

If incorporated, established, or recognized under UAE legislation, including Free Zone Persons: 3 months from the date of incorporation, establishment, or recognition.

If incorporated, established, or recognized under the applicable legislation of a foreign jurisdiction but effectively managed and controlled in the UAE: 3 months from the end of the financial year of the person.

Non-resident juridical persons have the following timeline to submit the Tax Registration application

The FTA decision states that a Non-Resident Person with a permanent establishment in the UAE before March 1, 2024, must register for corporate tax within nine months from the establishment date. Similarly, a Non-Resident Person with a connection to the country must register by May 31, 2024.

For Non-Resident Persons establishing a Permanent Establishment on or after March 1, 2024, registration for corporate tax is required within 6 months of establishment. Meanwhile, a Non-Resident Person establishing a nexus in the UAE after March 1, 2024, must register within a maximum of 3 months from the nexus establishment date.

Timeline for natural persons

The decision specifies that if a natural person conducts a business or business activity in the UAE and exceeds the AED 1 million threshold, they must submit a tax registration application by the following deadlines:

For a Resident Person: By March 31 of the following Gregorian calendar year in which the business or business activities occurred.

For a Non-Resident Person: Within 3 months from the date of meeting the tax requirements.

Penalties for late Tax Registration

Cabinet Decision No. 75 now includes a penalty of AED 10,000 for not submitting a tax registration application within the specified timeframes. This penalty applies to each taxable person.

The FTA will hold webinars to explain the new decision, as part of its campaign to inform businesses about corporate tax. These webinars aim to educate taxable persons and other interested parties about the requirements for corporate tax registration for each category of taxable person before the specified deadlines.

Key Links: Federal Tax Authority United Arab Emirates

Federal Tax Authority - Media Centre