[Green Circle says cross-border] UAE tax authority announces: late registration of income tax will face Dh10,000 penalty!

Upon incorporation of a UAE company, you will need to apply for a CIT number for each business license.
On February 22, 2024, the UAE Federal Board of Revenue ("FBR"), through Order No. 3 of 2024, issued a time limit for tax registration for UAE corporate income taxpayers. Pursuant to Article 51 of the UAE Income Tax Law, taxpayers are required to complete their income tax registration and obtain an income tax registration number within the timeframe prescribed by the IRD.

01
Time Limit for Income Tax Registration of Resident Corporations
For resident corporations incorporated before March 1, 2024, the following schedule applies:
For resident corporations incorporated on or after March 1, 2024, the following schedule applies:
Legal entities established under UAE law (including free zone enterprises): registration completed within 3 months from date of establishment
A legal person established under the applicable laws of a foreign jurisdiction and effectively managed and controlled in the UAE: 3 months after the end of the legal person's financial year
02
Time Limit for Income Tax Registration for Non-Resident Corporations
UAE Income Tax Registration Time Limit Requirements for Non-UAE Resident Legal Entities:
03
Penalty for Late Registration of Taxes
Failure to submit a tax registration application within the prescribed time limit is punishable by a fine of up to Dh10,000. Taxpayers are required to submit their tax registration on time.
04
Are Free Zone businesses covered by the UAE's corporate income tax?
The UAE Corporate Income Tax applies to all businesses and all businesses registered in the free zones are required to register for an income tax number.
Free zone businesses that earn income solely through transactions with businesses located outside the UAE or transactions with businesses located in any other free zone ("qualifying income") will be subject to the 0% tax.

Requirements for FTZ enterprises to be eligible for 0% CIT.
1. Enterprises registered in the FTZ and with economic substance in the UAE.
2. The company's income is tax-exempt (Qualified income).
3. The company is required to make a board resolution (Election)
4. Compliance with fair quotation principles
5. Satisfy all relevant cabinet resolutions issued by the government.
Green Circle provides a full range of Middle East business support, including Middle East VAT, trademark registration and UAE company registration services. Welcome to contact us if you have any need!