On Tuesday, February 27, the Ministry of Finance declared that late registration for business tax would result in a Dh10,000 Punishment.

The FTA developed this most recent improvement to encourage taxpayers to be more mindful of their responsibilities and to always pay their taxes on time. They’ll likely not put off paying the taxes because they’ll be worried about the fine.

The Cabinet Decision No. 10 of 2024 was made public on Tuesday, and it slightly modifies the Cabinet Decision 75 made in 2023.

As per the decision made in 2023, fines were applicable for infractions of the Corporate Tax Law, and these fines were operational as of August 1, 2023. The new regulations made in the latest decision will be applicable from 1st March 1, 2024.

The UAE is one of the most tax-friendly nations in the world for businesses. As per the law, you only have to pay 9% corporate tax if your business makes Dh375,000 or more in profit annually. It is thus a tax haven, and to ensure that stays the same, it is best to not delay paying the taxes.

Additionally, to facilitate the application of corporation tax, the UAE government offers small firms Small Business Relief (SBR). Only resident taxable individuals having gross business incomes up to Dh3 million in the relevant tax period and any prior tax periods ending on or before December 31, 2026, whether natural or juridical, are eligible for this exemption.

A guide on who is subject to corporate tax was released in December 2023. The FTA recommended that all individuals who conduct business in the country, wholly or partly, take a look at the new regulations and guide to avoid any delays and penalties.

In accordance with Clause 1 of Article 51 of Federal Decree-Law No. 47 of 2022, the Federal Tax Authority has issued Decision No. 3 of 2024 (effective March 1, 2024), outlining the registration timelines for taxable persons under the UAE Corporate Tax.

Please find the Date of license issuance and the corresponding deadline date for tax registration below:

• January 1 to February 28/29, 2024
• March 1 to April 30 – June 30, 2024
• May 1 to May 31—July 31, 2024
• June 1 to June 30—August 31, 2024
• July 1 to July 31 – September 30, 2024
• August 1 to September 30—October 31, 2024
• October 1 to November 30, 2024
• December 1 to December 31 – December 31, 2024
• Business activities without a license as of March 1, 2024 – May 31, 2024
• Established or recognized after March 1, 2024 – within 3 months from the date of incorporation
• For businesses with multiple licenses, the earliest issuance date will determine the registration deadline.
• Non-Resident Legal Entities with a Permanent Establishment in the UAE – 9 months from the establishment date
• Non-Resident Legal Entities with Nexus in the UAE – May 2024

It is requested that all readers carefully review their trade license and pay the taxes within the stipulated deadline to avoid the fine, which is quite hefty.

Stay informed about the latest announcements from the FTA and comply with the regulations accordingly.

The FTA has provided ample time for registration, but the process of tax registration should be expedited, as amending VAT registration could potentially delay the corporate tax registration process.

For more information Download PDF One with “English” for English Download and One with “عربي” for Arabic Download