The UAE Ministry of Finance has announced a crucial update to corporate tax regulations, reinforcing the need for businesses to comply with tax registration requirements. Under the newly issued Cabinet Decision No. 10 of 2024, any company that fails to register for UAE Corporate Tax within the prescribed deadlines will be subject to an administrative penalty of AED 10,000.
This new regulation, effective from March 1, 2024, revises the existing schedule of violations and penalties detailed in Cabinet Decision No. 75 of 2023. These regulations govern the enforcement of Federal Decree-Law No. 47 of 2022, which outlines the taxation of corporations and businesses in the UAE.
Emphasis on Compliance
The Ministry of Finance has highlighted that the AED 10,000 penalty is intended to ensure that businesses strictly adhere to the tax registration deadlines established by the Federal Tax Authority (FTA). By aligning this penalty with those for late registration in excise tax and value-added tax (VAT), the government aims to emphasise the importance of timely compliance across all areas of taxation.
Key Takeaways for Businesses
- Penalty Amount: AED 10,000 for failing to register for UAE Corporate Tax within the specified deadlines.
- Effective Date: The new penalty regulation comes into force on March 1, 2024.
- Alignment with Other Taxes: The penalty is consistent with those imposed for late registration in excise tax and VAT, reflecting a unified approach to tax compliance.
Businesses operating in the UAE are strongly encouraged to ensure they meet all tax registration requirements within the specified deadlines to avoid these penalties. As the UAE continues to refine its tax framework, staying compliant will be essential for companies to avoid unnecessary fines and ensure smooth operations.
