FTA clarifies Corporate Tax Registration Deadlines

The Federal Tax Authority (FTA) has issued a public clarification to provide much-needed clarity on the registration timelines for businesses subject to the UAE's new Corporate Tax regime. This information is crucial for ensuring businesses comply with tax regulations and avoid potential penalties.

The clarification focuses on the deadlines outlined in FTA Decision No. 3 of 2024, which specifies registration requirements for taxable persons under the Corporate Tax Law. The FTA emphasizes that the purpose of this public clarification is to enhance transparency and ensure businesses are fully informed about their obligations.

According to the FTA's explanation, resident juridical persons incorporated before March 1, 2024, must base their registration application submission date on the month their license was issued. For instance, if a company received its license in January 2023, they would have a different deadline compared to a business licensed in February 2024.

The FTA also clarifies the situation for resident juridical persons who did not hold a valid license on March 1, 2024. These businesses are required to submit their Corporate Tax registration application by May 31, 2024. The registration deadline remains tied to the original license issuance month even if the license had expired by March 1, 2024.

Non-resident persons are subject to Corporate Tax if they have a Permanent Establishment in the UAE and exceed a threshold of AED 1 million in turnover derived from this establishment within a Gregorian calendar year. The first possible tax period for all entities, including non-resident persons, will be the 2024 calendar year. Businesses are not liable for Corporate Tax on income generated before January 1, 2024. The deadline to submit a Tax Registration application for non-resident taxable persons is March 31, 2025.

The FTA encourages all businesses potentially subject to Corporate Tax to carefully review the public clarification and ensure they adhere to the specified deadlines. Timely registration is vital for maintaining compliance with UAE tax regulations and avoiding administrative penalties. Businesses are advised to consult with tax professionals if they have any uncertainties about their registration requirements or the applicability of Corporate Tax to their operations.

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