The United Arab Emirates (UAE) boasts a favourable tax environment for businesses, with its low corporate tax rates and numerous incentives attracting companies from around the globe. However, like any jurisdiction, the UAE has its set of rules and regulations governing corporate taxes, including penalties for non-compliance. Understanding these penalties is crucial for businesses operating in the UAE to avoid potential financial and legal repercussions. In this blog post, we’ll delve into various corporate tax penalties applicable in the UAE.
1. Missing Corporate Tax Registration Deadline:
● Businesses must register for corporate tax based on their incorporation month (regardless of the year) as per the below timeline given by FTA:
- January 1 to February 28/29 – May 31, 2024
- March 1 to April 30 – June 30, 2024
- May 1 to May 31 – July 31, 2024
- June 1 to June 30 – August 31, 2024
- July 1 to July 31 – September 30, 2024
- August 1 to September 30 – October 31, 2024
- October 1 to November 30 – November 30, 2024
- December 1 to December 31 – December 31, 2024
- For Natural Persons 31 March of next year from the year they reach the 1 Million threshold and register for CT
2. Failure to Maintain Records:
● Businesses must maintain financial and bookkeeping records as per guidelines.
● Non-compliance results in a penalty of AED 10,000.
● Repeat offenses within 24 months incur a fine of AED 20,000.
3. Not Reporting Amendments to Submitted Information:
● Notify authorities promptly of any necessary updates.
● Violation leads to a penalty of AED 1,000.
● Repeating the violation within 24 months incurs an AED 5,000 fine.
4. Not Submitting Requested Information in Arabic:
● Entities must provide relevant data or documents in Arabic.
● The penalty for non-compliance is AED 5,000.
5. Not Notifying Legal Representative Appointment:
● Failure to notify authorities about a legal representative appointment is a violation and may lead to corporate tax penalties as per decided by FTA.
Navigating corporate tax penalties in the UAE requires a comprehensive understanding of tax regulations and diligent compliance efforts. By adhering to tax laws, maintaining accurate records, and cooperating with tax authorities, businesses can minimize the risk of corporate tax penalties and contribute to a thriving business environment in the UAE.
We at Accountant’s Box provide accounting and Tax advisory as per your company’s requirements. We can assist you in registering your company for Corporate Tax in the UAE. Our dedicated team will provide all necessary guidance so you can avoid any penalties on corporate tax. For information, you can reach us at info@accountantsbox.com.