UAE Corporate Tax: New Dh10,000 Penalty for Late Registration
New penalties aim to enforce compliance with tax regulations
UAE Imposes Dh10,000 Fine for Late Corporate Tax Registration
Late corporate tax registrants will be fined Dh10,000, the Finance Ministry announced on Tuesday.
Penalties are imposed to encourage taxpayers to comply with tax regulations and register on time. Penalty amount for late tax registration is aligned with penalty related to late registration of Excise Tax and Value Added Tax.
Cabinet Decision No. 10 of 2024, announced today, amends the schedule of violations and administrative penalties of Cabinet Decision No. 75 of 2023.
The latter specifies the administrative penalties imposed by the Federal Tax Authority (FTA) for violations related to the application of the Corporate Tax Law. Those penalties came into effect on August 1, 2023. The Cabinet decision will be effective from March 1, 2024
The Act came into effect from June 1, 2023. UAE’s corporate tax is one of the lowest in the world. The law states that nine per cent corporate tax will be levied on companies with profits of Dh3,75,000 and above.
In December 2023, a guide was released on who is subject to corporate tax in the country. The FTA has urged all relevant natural person(s) who derive income in the UAE, or conduct business – wholly or partly – in the UAE to refer to the new guide and familiarize themselves with the corporate tax law, enforcement of rulings and other relevant matters. Materials available on FTA’s website.
In addition, the UAE government has provided Small Business Relief (SBR) to small businesses to ease the implementation of corporate taxes. For previous tax periods ending on or before 31 December 2026, this exemption is only available to natural or legal residents with gross business income of up to Dh3 million in the relevant tax period.
