Posted inTax, Corporate Tax

FTA issues clarification on corporate tax registration timelines

Failure to comply with these deadlines will result in an administrative penalty of Dh10,000.

By Nivetha Dayanand
Corporate Tax
Credit: Shutterstock
by Nivetha Dayanand

The Federal Tax Authority (FTA) has released a Public Clarification detailing the registration timelines for taxable persons under the new corporate tax regime. This move aims to provide clear deadlines for various categories of taxable persons and encourage the timely submission of tax registration applications.

According to the FTA, this clarification aligns with Federal Tax Authority Decision No. 3 of 2024, which specifies the registration timelines under Federal Decree Law No. 47 of 2022 on Corporate Taxation. The Public Clarification is effective from March 1, 2024, unless otherwise stated and does not amend any existing legislation.

Deadlines and compliance

The Public Clarification outlines specific deadlines for resident and non-resident persons, including juridical and natural persons. Notably, juridical persons seeking exempt status under the Corporate Tax Law must adhere to existing timelines as per FTA Decision No. 7 of 2023.

Failure to comply with these deadlines will result in an administrative penalty of Dh10,000. The FTA encourages all taxable persons to review the Public Clarification and ensure the timely submission of their corporate tax registration applications to avoid penalties.

Detailed submission guidelines

For Juridical Persons:

  • Resident Persons established before March 1, 2024: Submit based on the month of Licence issuance. If no Licence exists, the deadline is May 31, 2024. For expired Licences, the original issuance month applies.
  • Established on or after March 1, 2024: Submit within three months of incorporation or recognition.
  • Recognised under foreign legislation but managed in the UAE: Submit within three months from the end of the financial year.
  • Non-Resident Persons with a Permanent Establishment before March 1, 2024: Submit within nine months from the establishment date.
  • Permanent Establishment requirements: A degree of permanence of six months starting from June 1, 2023. International agreements may extend this period.
  • Non-Resident Persons with a nexus before March 1, 2024: Submit by May 31, 2024.
  • Non-Resident Persons with a Permanent Establishment on or after March 1, 2024: Submit within six months from the establishment date.
  • Non-Resident Persons with a nexus on or after March 1, 2024: Submit within three months of establishing a nexus.

If a non-resident person has both a Permanent Establishment and a nexus, the earlier deadline applies.

For Natural Persons:

  • Resident Persons from January 1, 2024: Submit if turnover exceeds Dh1 million within a calendar year. The deadline is March 31 of the following year.
  • Non-Resident Persons from January 1, 2024: Submit if turnover via a Permanent Establishment exceeds Dh1 million. The deadline is within three months of meeting this threshold.

The first tax period for all natural persons is the 2024 calendar year, with income before January 1, 2024, exempt from corporate tax. The registration application deadline is March 31, 2025.

The FTA urges all affected persons to adhere to these timelines to ensure compliance and avoid penalties. The Public Clarification provides detailed analysis and examples to help taxable persons understand the applicable deadlines for their category.