Corporate Tax

New Decision on Registration of New Corporate Tax in UAE

March 11, 2024 Comments Off on New Decision on Registration of New Corporate Tax in UAE

A new Corporate Tax Decision No. 3 of 2024 was announced by the Federal Tax Authority (FTA) on February 22. This decision was announced to maintain the timeliness of corporate tax in UAE registration and the Cabinet decision no. 10 of 2024 with the penalty of 10k AED for violation.

As of March 1, 2024, this rule for Corporate Tax in UAE has been implemented by the Federal Tax Authority and is applicable all over the UAE. This update is important for all businesses in the United Arab Emirates. Jaxa Chartered Accountants, one of the best accounting firms in UAE, will assist you in navigating through the new regulatory landscape.

Category of Juridical Persons

A juridical person can be categorized into 2 different segments. Below are the 2 categories of juridical persons:

  • Resident Person

A person incorporated, established or recognised under the applicable legislation of another country or foreign territory and who is effectively managed and controlled in the UAE.

  • Non-Resident Person

A person who has a permanent establishment in the country or a person with a Nexus in the UAE.

Timeline for Resident Juridical Persons

Here are the different deadlines based on your business setup date or the license issuance date:

License Issuance Month – Year the License

Deadline to Apply for UAE 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 October 31, 2024
October or November November 30, 2024
December December 31, 2024

Note 1: If a juridical person has more than one license, the license with earliest date shall be considered.

Note 2. If the business is incorporated on or after March 1, 2024, register for UAE corporate tax within 3 months of incorporation.

Non-Resident Person / Company
  • A person that is incorporated in a foreign jurisdiction that is effectively managed and controlled in UAE- Register within 3 months from the end of the financial year of the person.
  • Non-resident persons or company which has a permanent establishment ( PE ) before March 1, 2024-  register within 9 months from the date of existence of the permanent establishment.
  • Non-resident persons or company which creates a permanent establishment after March 1, 2024-  register within 6 months from the date of existence of the permanent establishment.
  • A person that has a Nexus in the UAE before March 1, 2024 – register for UAE corporate tax by May 31, 2024.
  • A person that has a Nexus in the UAE after March 1, 2024 – register for UAE within 3 months from the date of establishment of the nexus.

Individuals/Natural person
  • A resident natural person conducting a business activity in UAE whose turnover exceeds AED 1 million in a Gregorian calendar year- register within March 31 of the subsequent Gregorian calendar year.
  • A resident natural person conducting a business activity in UAE whose turnover exceeds AED 1 million in 2024 Gregorian calendar year- register within March 31 ,2025.
  • A non resident natural person conducting a business activity in UAE whose turnover exceeds AED 1 million in a Gregorian calendar year- register within three months from the date of turnover exceeding AED 1 million.

Important Points of New Regulations

Here are the key points to be noted to learn about the new regulations:

Residents

Non-Residents
  • The deadline for registration ranges from May 31, 2024, to December 31, 2024. The existing person who already has a business in the UAE has to register the business based on the license issuance date.
  • New Companies must register within 3 months from the date of incorporation.
  • Resident Individuals exceeding the turnover threshold need to register by March 31 of the following year.
  • Residents individuals with an existing business in 2024 exceeding the turnover threshold should register for corporate tax in UAE by March 31, 2025
  • Non-resident companies having PE already – need to register within 9 months from the establishment of PE.
  • Non-resident companies which will establish PE after March 1, 2024 – need to register within 6 months from the establishment of PE.
  • Person having Nexus already before March 1, 2024- have 3 months to register – that is by May 31, 2024 , they need to complete registration.
  • Person creating Nexus after March 1, 2024- need to register within 3 months of creating the Nexus
  •  Non-resident individuals exceeding the threshold need to register within the 3 months of meeting the requirements of being subject to tax.

Key Points to be Noted

  • The Corporate tax registration decision is already effective on 1 March 2024.
  • Taxable persons who got their licenses in January or February will be called for registration on or before the end of May 2024. Follow the procedure and register for corporate tax in UAE on time to avoid penalties.
  • FTA will conduct webinars on the registration of corporate tax in UAE prior to the deadlines.

Contact Jaxa Charter Accountants for more information.