UAE announces new tax regulations

The Federal Tax Authority (FTA) has recently announced new corporate tax registration deadlines that are significantly earlier than previously expected, catching many businesses off guard. The new staggered deadlines, spread throughout 2024, require companies to register much sooner than the prior deadline of September 2025 for December tax year-end corporations.

Under the new framework, companies are classified based on the month in which their original license was issued. The FTA has provided a timetable indicating the registration deadline corresponding to the month of license issuance, regardless of the year of issuance. This means that businesses must adhere to the new deadlines based on the month their license was granted, rather than the year.

For example, a company that received its initial license in May 2018 now has a registration deadline of July 31, 2024. Similarly, a business that was licensed in May 2023 also has a registration deadline of July 31, 2024. This new classification system emphasizes the importance of the month of license issuance in determining registration deadlines.

Businesses that fail to register by the new deadlines will face a hefty fine of Dhs 10,000, with no grace periods provided by the FTA. This strict enforcement is intended to ensure compliance with the updated registration requirements and prevent a last-minute rush of registrations in late 2025.

John Casey, managing director of TaxReady, a company specializing in tax and accounting services, believes that the FTA’s decision to bring forward the registration deadlines is a strategic move to prevent administrative bottlenecks and ensure a smoother tax filing process in the future. By spreading out the deadlines throughout 2024, the FTA aims to distribute the workload more evenly and focus on processing tax filings starting in 2025.

Casey advises businesses to take prompt action and ensure compliance with the revised tax deadlines to avoid penalties. He emphasizes the importance of starting the registration process early, as delaying it only increases the risk of incurring fines. According to UAE corporate tax rules, all businesses operating within the country must register for corporate tax, maintain accurate accounting records, and file an annual tax return.

Even businesses registered in free zones or eligible for exemptions must still go through the compliance procedures to demonstrate their non-taxable status. Therefore, it is crucial for all businesses to act promptly and ensure they meet the new registration deadlines set by the FTA.

In conclusion, the FTA’s new corporate tax registration deadlines have caught many businesses by surprise, requiring them to register much earlier than anticipated. It is essential for companies to understand the implications of these updated deadlines and take prompt action to avoid penalties and ensure compliance with the new regulations.