The United Arab Emirates’ (UAE) Federal Tax Authority (FTA) is urging businesses to register for corporate tax before the deadline. This reminder comes as the UAE implements its new corporate tax regime, effective from June 2023 for businesses with financial years starting on or after that date.
Deadline Looms for Tax Registration
The specific deadlines for registration vary depending on a company’s incorporation and trade license issuance date. However, the message from the FTA is clear: businesses must register on time to avoid penalties. The consequences of late registration include a potential AED 10,000 (approximately $2,722) fine.
Who Needs to Register?
The corporate tax applies to businesses and commercial establishments operating in the UAE mainland, with certain exemptions. Businesses with a taxable income exceeding AED 375,000 (approximately $100,000) per year are required to register for corporate tax. Additionally, some exempt businesses may choose to register voluntarily.
Registering for corporate tax ensures compliance with UAE regulations and avoids potential penalties. It also allows businesses to understand their tax obligations and plan their finances accordingly. The FTA encourages businesses to visit their website or contact them directly for further information and guidance on the registration process.
The UAE’s introduction of corporate tax aligns with global trends towards fairer and more diversified tax systems. It also aims to attract foreign investment and stimulate economic growth.
The implementation of corporate tax marks a significant change for businesses operating in the UAE. By registering on time and familiarizing themselves with the regulations, businesses can ensure a smooth transition and remain compliant with the new tax regime.
