The Ministry of Finance declared recently that registering for UAE Corporate Tax beyond the deadline would incur an administrative fine of Dh10,000. This means companies that fail to submit their applications for Corporate Tax registration within the deadlines set by the Federal Tax Authority would have to pay a penalty.
The purpose of the penalty was to incentivize taxpayers to comply with tax laws by promptly registering for corporation tax. Also, the late tax registration penalty amount is equivalent to the late excise tax and value-added tax (VAT) penalties as per the statement.
In order to amend the schedule of violations and administrative penalties of Cabinet Decision No. 75 of 2023 regarding the administrative penalties for violations related to the application of Federal Decree-Law No. 47 of 2022 on the taxation of corporations and businesses, the Ministry of Finance announced the issuance of Cabinet Decision No. 10 of 2024. On March 1, 2024, Cabinet Decision No. 10 of 2024 will take effect.
To lessen the effects on small enterprises, the government launched the Small Business Relief (SBR) program. It was in conjunction with the Corporate Tax Law. The goal is to reduce compliance requirements through December 31, 2026. This relief effort is only available to resident taxable persons (natural and juridical) reporting gross business income of up to Dh3 million.
This decision gave the Federal Tax Authority (FTA) a thorough framework for enforcing administrative penalties. It emphasizes on infractions pertaining to the Corporate Tax Law. Hence, with effect from August 1, 2023, these fines demonstrate the government’s dedication to maintaining tax compliance requirements.
Corporate Tax Landscape
The UAE’s corporate tax environment is characterized by a unique combination of federal and emirate-level rules. Also, there are a variety of incentives and exemptions to encourage business and investment. Businesses looking to set up or develop in the UAE must understand its corporate tax structure.
Most UAE enterprises are exempt from federal corporate income tax. Also, individual emirates can collect corporation taxes on specific sectors or activities according to their legislation and goals. For more details, reach out to us www.bizvirtue.ae | info@bizvirtue.ae | +971 45 70 9205 | +971 54 793 5540.
