CORPORATE TAX IN THE UAE: IMPLEMENTATION TIMELINE AND KEY DEADLINES

Corporate Tax in the UAE: Implementation Timeline and Key Deadlines

Corporate Tax in the UAE: Implementation Timeline and Key Deadlines

Blog Article

The United Arab Emirates (UAE) has introduced a federal Corporate Tax (CT) regime, marking a significant shift in its fiscal landscape. Effective for financial years starting on or after June 1, 2023, this move aligns the UAE with global tax standards and aims to diversify its revenue sources beyond oil. The standard corporate tax rate is set at 9% for taxable income exceeding AED 375,000, while income up to this threshold remains tax-free. Free Zone entities may benefit from a 0% tax rate on qualifying income, subject to specific conditions.

To navigate this new tax environment effectively, businesses are increasingly seeking corporate tax advisory services. These services provide essential guidance on compliance, strategic planning, and optimization under the new tax regime.​

Registration Deadlines


Resident Juridical Persons


The Federal Tax Authority (FTA) has established specific registration deadlines based on the month of license issuance for entities incorporated before March 1, 2024:

  • January–February: Register by May 31, 2024


  • March–April: Register by June 30, 2024


  • May: Register by July 31, 2024


  • June: Register by August 31, 2024


  • July: Register by September 30, 2024


  • August–September: Register by October 31, 2024


  • October–November: Register by November 30, 2024


  • December: Register by December 31, 2024



Entities established on or after March 1, 2024, must register within three months from the date of incorporation.

Non-Resident Juridical Persons


Non-resident entities with a Permanent Establishment (PE) in the UAE before March 1, 2024, are required to register within nine months from the establishment date. For PEs established on or after this date, the registration deadline is six months from the establishment date. Entities with a nexus in the UAE must register within three months of establishing the nexus.

Natural Persons


Individuals conducting business activities in the UAE with an annual turnover exceeding AED 1 million are obligated to register for corporate tax by March 31 of the following year. For instance, if the turnover threshold is met in 2024, the registration deadline is March 31, 2025.

Given the complexities of these requirements, many businesses are turning to tax advisory services in Dubai to ensure timely and accurate registration.​

Filing Deadlines


Corporate tax returns must be filed within nine months following the end of the relevant financial year. Key deadlines include:

  • Financial Year Ending December 31, 2024: File by September 30, 2025

  • Financial Year Ending March 31, 2025: File by December 31, 2025


For entities with shorter tax periods ending on or before February 29, 2024, the FTA has extended the filing deadline to December 31, 2024.

Compliance Requirements


To maintain compliance under the new corporate tax regime, businesses must:

  • Maintain Accurate Records: Keep comprehensive financial records and documentation for at least seven years.

  • Timely Registration and Filing: Adhere to the specified registration and filing deadlines to avoid penalties.

  • Tax Payments: Ensure that tax liabilities are settled by the filing deadline to prevent interest charges.

  • Advance Tax Payments: Some businesses may be required to make advance tax payments, depending on their circumstances.


Engaging with corporate tax advisory services can assist businesses in understanding these obligations and implementing effective compliance strategies.​

Penalties for Non-Compliance


Failure to comply with the corporate tax requirements can result in significant penalties:​

  • Late Registration: A fixed penalty of AED 10,000.

  • Late Filing: Penalties ranging from AED 1,000 to AED 50,000, depending on the duration of the delay.

  • Late Payment: Interest charges on the outstanding tax amount.


To mitigate these risks, businesses are advised to consult with tax advisory services in Dubai for expert guidance and support.

The introduction of corporate tax in the UAE represents a pivotal change in the country's fiscal policy, aiming to align with international standards and diversify revenue streams. Understanding the implementation timeline and adhering to key deadlines is crucial for businesses operating in the UAE. By leveraging corporate tax advisory services, companies can navigate the complexities of the new tax regime, ensure compliance, and optimize their tax positions.

 

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