UAE Corporate Tax Registration: Don’t Miss the Deadline or Risk Fines

Foreign investor-owned firms and startups are among those missing the UAE corporate tax registration deadline, putting themselves at risk of Dh10,000 fines. Even with advance notices from the UAE tax regulator, many businesses are failing to meet the deadlines.

Registration Requirements are Straightforward

The registration process is relatively simple, especially for businesses that already have experience with VAT registration. However, many foreign investors and startups operating from free zones are not updating their corporate tax registration, resulting in missed deadlines.

FTA’s Message: Stick to Deadlines

The Federal Tax Authority (FTA) has consistently emphasized the importance of sticking to deadlines based on when the company license was issued. Businesses that fail to register on time will face a Dh10,000 fine, even if they register at the last minute.

Accurate Information is Key

The FTA requires correct and updated supporting documents, including the commercial license, Emirates ID card, passport of the authorized signatory, and proof of authorization. The FTA’s corporate tax registration also picks up details from earlier VAT registrations, if applicable.

Maintain a Robust Accounting System

Businesses must maintain a robust accounting system to bifurcate qualifying and non-qualifying income, calculate the de-minimis threshold, and bifurcate disallowed expenses and dividend income. These records must be maintained for 7 years.

Penalties for Late Registration

The FTA has started imposing penalties of Dh10,000 for late registrations. Businesses can apply for a waiver of the penalty, but it is unclear how the FTA will handle these requests.

FTA’s Review Process

The FTA has 20 business days to review applications, approve requests, issue a Tax Registration Number (TRN), or ask for additional information. Entities that already have VAT or excise tax registration can auto-populate their details for corporate tax registrations.

Challenges Remain

Some businesses still face challenges in updating or correcting details, and the FTA portal does not allow the upload of multiple branch licenses for a single foreign company. However, ongoing updates aim to address these issues.

What Should Newly Formed Businesses Do?

Companies incorporated after March 1, 2024, have three months to register. If an entity holds more than one license as of March 1, 2024, the license with the earliest issuance date will be used.

EmaraTax Platform

Entities must use the EmaraTax platform for the application, submission, and registration process. This platform is available 24/7 and enables unregistered persons to create a new user profile and obtain a tax registration number easily and conveniently via their email and phone number.